In his article, "Under the Control of the State" (The Catholic World Report blog, 02/17/12) Father James Schall, S.J., of Georgetown University raises an issue that we have addressed many times on this blog. Most recently this has been in the "Raw Judicial Power" series and the 02/22/12 posting on the false equality concept that pervades today's politics.
While Father Schall's article is insightful, he unfortunately avoids addressing the underlying cause of the immense growth of government power he deplores. That is the fixed belief that the only way to finance new capital formation is to cut consumption and accumulate money savings.
As regular readers are well aware, the myth of past savings (we use "myth" here not in the sense of guiding world view, but of "false story") necessarily leads to concentrated ownership of capital as technology advances and becomes increasingly expensive. Only the very rich — and the richer, the better — have the capacity to restrict their consumption to that degree. The rich actually find it impossible, as Louis Kelso pointed out, to consume the vast amount of income generated by the capital they own. Being rational, the money is reinvested in yet more capital, exacerbating the problem.
The past savings myth that only an elite can afford to finance new capital formation leads to the creation of a number of other damaging myths. One of the most harmful is the belief that advancing technology is evil. As Chesterton scholar Father Ian Boyd has analyzed the situation, "man is building machines he cannot control." "Control" and "ownership" being the same in all codes of law, what Father Boyd is really saying is that "man is building machines he cannot own." As a corollary, if technology were not advancing, it would remain simple, and ordinary people could afford to cut consumption and save to acquire it — and 99% of the people on earth would starve to death in a matter of weeks.
These are logical conclusions in light of the slavery of past savings into which humanity has sold itself. It comes as no surprise that Father Boyd, who does not appear to understand Kelso's financing techniques that would emancipate humanity from the slavery of past savings, rejects the Just Third Way on the vague grounds that "It's not our way."
The myth that technology is evil leads to another myth, that any technology beyond a nebulous "human scale" must be eliminated or put under the control of the State, not left in the hands of untrustworthy private interests.
The problem is that State control to the degree necessary to regulate the economy to achieve politically desirable ends is contrary to nature. The right to be an owner is a natural right, as Leo XIII made painfully clear in Rerum Novarum. Thus, once it has begun the process of trying to guarantee results to any degree, the State is "forced" to exercise increasing control and intrude into every aspect of life in every sphere in an increasingly desperate yet nevertheless futile attempt to impose desired results.
The reasoning is sound, even though the premises are false:
1. Shackled by the myth of past savings, it is assumed that ordinary individuals cannot control — own — these vast machines and systems because they do not have the savings to purchase them, and lack the capacity to restrict consumption in order to accumulate the necessary cash.
2. Contradicting the fact that nothing created by God can be intrinsically evil, private owners of capital — capitalists — are assumed to be inherently greedy. As such, they cannot be trusted to exercise proper stewardship of their wealth for the good of all humanity, for which the wealth was created.
3. Since all production comes from labor (another myth), the rich must be thieves, because nobody's labor is worth that much, so the only way to accumulate so much is to have stolen it. Justice demands that the rich be punished for their gargantuan thefts, unless they voluntarily redistribute their ill-gotten gains.
4. Since the State is the guardian of the common good — always misunderstood as the aggregation of individual goods, not correctly understood as the vast network of institutions within which humanity as political animals acquires and develops virtue — the State must assume absolute power as Keynes declared, and either control or own outright first money and credit, then key industries, then all industries, and, ultimately, take over both domestic and religious society, abolishing or nullifying humanity's natural rights to life, liberty (freedom of association/contract), and property.
Not surprisingly, within this frame of reference a viable solution becomes impossible. If we try to make every citizen an owner of enough capital to generate an adequate and secure income sufficient to meet common domestic needs satisfactorily, the only source of that capital within a system in which all capital must be financed out of existing accumulations of savings are the wealthy who, by definition, own those savings.
If the rich prove obstinate — as people tend to do when being called thieves and someone demands all or a portion of their wealth — then the only recourse is to confiscate and redistribute, either the capital itself, or the income generated by the capital. Since property is the right to control what you own and derive the fruits — the income — therefrom, the only way to restore property within a system based on the past savings assumption is to destroy the meaning of property.
Is, however, the slavery of past savings the only option? Is there a way that people can retain their natural rights and exercise those rights at the same time? Or is the phrase "the rights of man" as empty as the totalitarian and absolutist State would have us believe?