THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Thursday, November 8, 2012

The Road to Fascism

The day before yesterday, Archbishop Charles A. Chaput published a post on "Public Discourse," the blog of the Witherspoon Institute, on "Life in the Kingdom of Whatever." The point of the posting (if you don't have time to read it here) is that the spread of moral relativism, seen most graphically in the presumed split between faith and reason, has had a disastrous effect not just on individual lives, but on the whole of civilization.

Perhaps not surprisingly, Archbishop Chaput's analysis is similar to that of CESJ — and (as you might expect) to ours, as detailed in In Defense of Human Dignity (2008), Supporting Life: The Case for a Pro-Life Economic Agenda (2010) and The Restoration of Property: A Reexamination of a Natural Right (2012).

The restoration of virtue — justice in particular — was, broadly speaking, the topic on which we wanted to meet with the Archbishop a few years ago. The presentation our gatekeeper/door-opener made, however, may have lost a little in the translation. She apparently was not up to explaining how CESJ's "Just Third Way" differs from the usual redistribution schemes that either confiscate wealth outright, or redefine the natural rights of life, liberty and property — or even human nature itself — in a way that allows people to fool themselves that they are still being consistent with universal moral values and the natural law. The shift in the basis of the natural law from what can be observed about human nature and empirical evidence, to one's personal opinion has been disastrous in too many ways to list.

To take one example, in the world of finance and economics, many people hold as a virtual religious doctrine the opinion that the only way to finance new capital formation is to restrict consumption and accumulate money savings. This opinion is the basis for the mainstream Keynesian, Monetarist/Chicago, and Austrian schools of economics, as well as minor schools such as distributism, georgism, and social credit. This is related to the opinion that only labor is truly productive, that capital only enhances labor.

Now, as Mortimer Adler pointed out in Ten Philosophical Mistakes, an opinion can be true or false — but knowledge is always true. In his 1935 book, The Formation of Capital, Dr. Harold G. Moulton of the Brookings Institution proved beyond the shadow of a doubt — proved; he did not simply assert as opinion — that the present value of future increases in production could be turned into money by the expansion of commercial bank credit and used to finance new capital formation without first having to cut consumption and accumulate money savings. This is, in fact, what commercial and mercantile banks (known generically as "banks of issue" or "banks of circulation") were invented to do, thousands of years before the invention of banks of deposit, such as credit unions and savings and loans, ironically the only type of bank with which most people are familiar.

Further, as Moulton pointed out (consistent with Adam Smith's dictum that the purpose of production is consumption, a lead-in to Say's Law of Markets), to require that consumption be reduced before new capital formation can be financed is, everything else being equal, the worst way to finance new capital and stimulate economic growth. No sane person produces goods or services for market unless there is some demand for what will be produced. Decreasing consumption necessarily implies reduced demand, thereby reducing the incentive to produce. Therefore, it is far more efficient and logical to finance new capital with the present value of future increases in production, than accumulated savings representing what has been withheld from consumption in the past.

To Moulton's findings Louis Kelso added that all new capital financed with such "future savings" should be broadly owned . . . and thereby solved a problem that has plagued social reformers for millennia: how can people without capital and who consume all of their labor income supposed to become owners of capital? They aren't paid enough to be able to save more than a pittance for retirement (if that), and the rich aren't going to lend them money or give it to them outright, except in exceptional cases. What can be done?

Typically, the response has increasingly been that, since the rich must have stolen what they have, it's only just that we should steal from them and redistribute their presumably ill-gotten gains; two wrongs make a right. This, of course, requires that the ones judging the rich have the true knowledge that God has. Unfortunately, all they really have is the false opinion that, since the only way new capital formation can be financed is by cutting consumption and saving, and since labor is the only real input to production, and since nobody's labor is worth that much, the rich must have stolen what they have! That's logic, as Tweedledee and Tweedledum would say. Wealth must be redistributed if we want justice. They used to call this "theft."

This requires that such things as life, liberty and property be redefined so that redistribution is no longer theft, but justice. This, as we might expect, makes the natural law conditional, that is, no longer the natural law. No one's rights to life, liberty and property are truly inalienable, for redefinition inevitably establishes criteria to justify being alive, being free, or owning something.

Thus, you must prove that your life is worth living or isn't inconvenient or endangering someone else's life, liberty or property. Paradoxically, you also have to prove that you are worthy of being free and not a slave, i.e., a full member of society . . . which involves proving that you haven't committed a crime — such as attempting to be born inconveniently or under circumstances that make you an embarrassment or financial or social burden. As for ownership, that must be justified on some grounds other than being merely human. If you didn't work for it, you don't really own it. It must also be convenient for the State or other people that you own, or you can be divested of your property until you can justify possession.

In other words, pure moral relativism. Redefining fundamental rights in this fashion, as both Mortimer Adler and Heinrich Rommen pointed out, leads straight to totalitarian government. Sadly, the rot has spread so far that the moral relativism Archbishop Chaput targets is now not only respectable, it's considered essential, as Keynes asserted on the second page of Volume I of his magnum opus, A Treatise on Money (1930). The absolutist State has (according to Keynes) the power to "re-edit the dictionary," thereby abolishing the natural law.

As Kelso pointed out, however, empirical evidence has shown that 1) past savings is not the only source of financing for new capital, and 2) labor is not the only producer of wealth.

Suddenly we see that it is completely unnecessary to re-define the natural law in order to take what others have. Nor do we need to help God out by enforcing His law when we think other people are breaking it, however much we may think He is sleeping on the job.

The problem, of course, is that (being wedded to their opinions) people reject the potential of Kelso's advances in economics and finance, especially as embodied in, say, Capital Homesteading. We have actually seen people shake with rage when it was suggested that we don't have to take revenge on the rich in order to establish justice, and proclaim that CESJ is opposing God's Will — when, frankly, all that's really being opposed is their own false opinions.