It has been a while since Greece was in the news, but that doesn’t mean the situation there is any better . . . it just means that other things are more immediate, and more bright and shiny to catch the eye of the media. The problem, however, is still with us — and by “with us,” we’re implying that the problem Greece faces right now is what is down the road for everybody once we’re too far gone down the path laid out for us by Keynesian economics.
|The State is a specialized social tool.|
We’ve treated the basic problem before: a currency backed with government debt instead of private sector hard assets, extremely concentrated ownership of capital, open hostility to productive activity . . . and the government trying to take care of every conceivable need. And that’s a problem.
The State is a very specialized “social tool.” In Aristotelian “natural law theory,” the job of the State has an equally specialized function: to care for the common good . . . which is not the aggregate of individual goods. On occasion, such as when the common good is endangered, it is permissible (even, up to a point, mandatory) for the State to look after people’s individual needs, but only until the emergency passes. As a usual thing, however, the State should be confined to doing what it is intended to do; using it for anything else is like trying to drive in a screw with a hammer, or a nail with a screwdriver.
Why? In order to be able to (as it says in the Preamble to the U.S. Constitution), “form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty (in other words, care for the common good. . . .), the State has certain powers, the primary of which is a monopoly over the instruments of coercion . . . and the way the citizens keep control over the State is to keep control of the purse strings, meaning the money that pays for the instruments of coercion.
That’s why, if the State can figure out a way to finance itself without recourse to taxation, the citizens have no power at all. And if the method of financing means that the politicians can spend without worrying about having to tax to repay the financing, the State has a monopoly on both coercion and money . . . so they don’t have to care about who makes the laws.
|"The State has been overwhelmed and crushed."|
But there is another thing, and that is, if the State tries to do everything for everybody, it ends up not being able to do anything at all, except mess things up further. You don’t have to be a Catholic or a believer in anything to realize the wisdom of what Pope Pius XI pointed out back in 1931 as he saw the rise of the dictatorships in Europe and elsewhere:
When we speak of the reform of institutions, the State comes chiefly to mind, not as if universal well-being were to be expected from its activity, but because things have come to such a pass through the evil of what we have termed “individualism” that, following upon the overthrow and near extinction of that rich social life which was once highly developed through associations of various kinds, there remain virtually only individuals and the State. This is to the great harm of the State itself; for, with a structure of social governance lost, and with the taking over of all the burdens which the wrecked associations once bore, the State has been overwhelmed and crushed by almost infinite tasks and duties. (Quadragesimo Anno, § 78.)
And how did this come about? By the fact that when ordinary people don’t own capital, and capital is taking over more and more of the burden of production, it means that ordinary people can’t take care of themselves, and are forced into the position of having someone (or something) else do it. And in these days, that means the State. As the solidarist labor economist Goetz Briefs noted eighty years ago in 1937:
It is a fact that large groups of workers today have no objection to raise against propertylessness — provided their jobs are secure, their wages sufficient, and provisions are made through social insurance for old age and unemployment. To meet these requirements the economic system has had to shoulder increasing burdens and to put up with an increasing amount of social legislation, which, of course, implies additional regimentation. As long as the risks of a propertyless, dependent life were private affairs of the worker, it paid to transform work more and more into wage work. Now, however, since the concomitant costs of this process are gradually being made public costs to be carried through taxes levied upon business and the general public, it is becoming questionable whether or not the aforementioned process was always as economical as it seemed to be. (Goetz A. Briefs, Briefs, The Proletariat: A Challenge to Western Civilization. New York: McGraw-Hill Book Company, 1937, 273-274.)
And the solution for all of this? As Louis Kelso pointed out over half a century ago, if machines are talking away your job . . . buy the machine. That way, the income the machine generates goes to you as the owner.
The alternative is for government to take over more and more of the burden of caring for people, which means that the government owns people.
It really is a case of “own or be owned.”