Thursday, January 13, 2011

Some Capital Homesteading Questions, Part IV: Back to the Land

A number of social and economic movements today advocate a return to a simpler, more human lifestyle. Usually this takes the form of promoting a return to small, family owned farms and artisan-type workshops using technology that a single individual can build, own, and operate. In this way, life can come down to human scale and the world will not only be more livable, but be more friendly and agreeable, there will be less war and conflict, and so on, so forth.

Consistent with that, our correspondent's final question was, "Were you aware there's an actual present-day movement to have a real-estate Homestead Act (I believe involving government held land for self-sustainable agriculture)?"

Yes. The effort is based on a limited asset, land, and thus embodies all the weaknesses of the original Homestead Act. It relies on existing accumulations of savings to finance development of the land. The proposal could be fitted into Capital Homesteading, but it could never be a permanent solution in and of itself, or anything more than a bandage unless part of a larger Capital Homesteading program.

The fact is, if we get rid of modern technology and force people to return to subsistence agriculture, most of the people on earth will starve to death in a matter of weeks. There is simply not enough arable land available on earth — including all forests and grasslands — to keep 98% of the people fed when farmed using subsistence methods. (This of course begs the question as to how many people would have to be killed to force the survivors into subsistence agriculture.)

Thus, we again hit the brick wall of past savings. The whole "small is beautiful" approach assumes without question that new capital can only be financed out of existing accumulations of savings — by definition a monopoly of the rich.

Given the past savings assumption, the rich will own all new capital, "ownership" will have to be redefined in order to permit "everyone" to "own" in some fashion, or there will be some mixture of the two in an effort to keep things going.

Unfortunately, as the past savings assumption is contrary to reality, it doesn't matter which arrangement of society you make to try and accommodate to it. If the rich own all new capital (capitalism), the poor will become increasingly worse off as the rich keep the fruits of ownership to themselves and advancing technology replaces human labor as the predominant factor of production. If you redefine ownership — private property — in such a way as to change the character (essence/substantial nature) of ownership to include everybody in the benefits of ownership regardless who holds actual title (socialism), you effectively abolish private property, as Dr. Heinrich Rommen (a student of the great Father Heinrich Pesch, S.J., the founder of solidarism) explained:

Property is an original right of the individual but burdened with a changing social mortgage, depending upon the intensity of social symbiosis and the rules of social justice. In its definition, property is exclusive, supreme, and full ownership of a thing, although not all things can become property: not men, not spiritual things. But property and its use are always under the law restricting its use, and the owner himself may invest rights of others in his property, though he himself retains the property and remains the owner. Yet, though property and its use may thus be restricted, even very much restricted, it still continues to exist. If it should cease to exist as an institution, the natural right to property would be abolished. (Heinrich Rommen, The State in Catholic Thought. St. Louis, Missouri: B. Herder Book Company, 1947, 401.)
(This agrees with the analysis of Pope Pius XII in his 1942 "Christmas Message," quoted in § 52 of his encyclical Evangelii Praecones ("On Promotion of Catholic Missions"), 1951: "The dignity of the human person then, speaking generally, requires as a natural foundation of life the right to the use of the goods of the earth. To this right corresponds the fundamental obligation to grant private ownership of property, if possible, to all. Positive legislation, regulating private ownership may change and more or less restrict its use. But if legislation is to play its part in the pacification of the community, it must see to it that the worker, who is or will be the father of a family, is not condemned to an economic dependence and servitude which is irreconcilable with his rights as a person.")

Finally, if you attempt to combine private accumulations of savings with State control, especially State control of money and credit, you end up with socialism under a different name: the "Welfare State." Ultimately, with humanity enslaved to past savings as the only recognized source of financing for new capital formation, there is no way to avoid disaster, as current global leaders and policymakers are starting to discover.

The "small is beautiful" movement, along with distributism, social credit, georgism, as well as the three mainstream schools of economics (Keynesian, Monetarist/Chicago, and Austrian) are all trapped by the slavery of past savings. They are forced by their assumption about how capital formation is financed to turn into heartless capitalists, brainless socialists, or social-capitalists/market-socialists in order to try and make an unworkable system work.

Whichever way it goes, either people or human rights suffer. Under socialism, individual human rights of the few are sacrificed in the ephemeral hope that by this means most people will satisfy their material wants and needs. Under capitalism, the legitimate wants and needs of most people are sacrificed to maintain the individual rights of a few. Under the Welfare State, the effort to protect individual rights — up to a point — at the same time that the wants and needs of the great mass of people are satisfied — up to a point — ensures that neither individual rights will be respected, nor the wants and needs of the great mass of people satisfied.

Thus, regardless in what direction we go within the area circumscribed by the slavery of past savings, we end up at the same place: misery, want, and despair on the part of most people within a system seemingly custom-made to fail.

The flaws of capitalism are obvious to most people, so we should look at socialism and the small is beautiful movement to demonstrate the problems inherent in the approach. These can be summarized as the redefinition of the natural right of private property, the reliance on existing accumulations of savings to finance growth, and an understanding of money and credit that obviates the legal and accounting definitions of those uniquely social goods.

The most obvious problem with the "small is beautiful" approach, however, is that it assumes as a given that small scale enterprises are automatically the optimal size, both socially and economically — which even G. K. Chesterton stated was not the case. By denying people the power to choose to own advanced technology as part owners — thereby bringing even the largest enterprises down to human scale through vesting owners with the full rights of private property — the small is beautiful movement unconsciously relies on increasingly intrusive State control of the economy by mandating what, how, and, especially, if people can own. This is a fundamental redefinition of the natural right of private property. Many supporters of the small is beautiful approach claim to want less State involvement, but, by insisting on mandates, necessarily use the coercive power of the State or something that is the State in all but name to impose desired results. Imposition of results is one of the hallmarks of socialism, as well as assigning a type of power to the State that both Mortimer Adler and Heinrich Rommen had no qualms identifying as totalitarian.

Even the idea of "human scale" is distorted in the small is beautiful movement. Kirkpatrick Sale, for example, rants about human scale continually, yet at the same time rejects the idea of humanity as a standard: "Anthropocentrism, and its expression in both humanism and monotheism, is the ruling principle of that civilization, to which must be opposed the principle of biocentrism and the spiritual identification of the human with all living species and systems." (Kirkpatrick Sale, "Lessons from the Luddites" The Nation, June 5, 1995.)

We are also afflicted with "distributists" — keeping in mind that "distributism" is a system based on widespread ownership of ("private property in") the means of production, with a preference for small, family-owned farms and artisan workshops — who appear to have no idea of what private property consists! We once attended a lecture by a Leading Figure in the Distributist Movement in which the "LFDM" stated that Chesterton's thesis was that "man is building machines he cannot control."

This was an astounding claim for a distributist to make. "Ownership" and "control" are (as Louis Kelso pointed out and as every lawyer should be able to tell you) the same in all codes of law: "Property in every day life is the right of control." (Louis O. Kelso, "Karl Marx, the Almost Capitalist," The Journal of the American Bar Association, March, 1957.) The reasonable interpretation of the claim that man is building machines he cannot control, is that man is building machines he cannot own — a claim directly contrary to the stated principles of distributism.

The bottom line? Before any progress can be made toward a better world, we are going to have to understand the problem — and the problem is not "them." No, it's not the capitalists, the socialists, the Jooz, the neo-cons, the Republicans, the Democrats, the Pro-Lifers, the Pro-Choicers, or even Obama. It's the unquestioned assumption that we are all slaves of past savings.

People of the World Unite!
You Have Nothing to Use But Your Brains!


No comments: