In order to make life easier for us (at least today), we’re having a short break in our series on “Raw Judicial Power” and posting the second of three parts of our foreword to William Thomas Thornton’s A Plea for Peasant Proprietors. Our new annotated edition is starting to generate a little interest in some quarters. Take advantage of the free download on the “Plea” website and (if the spirit moves you) you can get a 20% discount on purchases in bulk (10 or more copies) . . . plus shipping. Or you can just go to Amazon or Barnes and Noble and get an individual copy.
So why all the fuss? Especially at this time of year when “everybody” is focused on the March for Life or the Republican shenanigans in trying to pick someone who can defeat President Obama when they’d be better off trying to find somebody who can do the job better instead of no worse.
Thornton's proposal was a logical development of an analysis he had published two years before. In his first major work in 1846, Over-Population and Its Remedy, (William Thomas Thornton, London: Longman, Brown, Green, and Longmans, 1846.) Thornton refuted Thomas Malthus's scarcity-based theories. Thornton's analysis in A Plea for Peasant Proprietors countered an idea implicit in Malthus's Essay: that ownership of capital must be concentrated if the rich are to accumulate sufficient savings to finance new capital and provide jobs for workers who own nothing except consumer goods and their own labor. Like other philosophers and political scientists through the ages, (A brief list includes Aristotle, the Gracchi (noted by Thornton), Plutarch, the 6th century Byzantine "Farmers' Law," John Locke, George Mason, William Cobbett, Benjamin Watkins Leigh, and Daniel Webster.) Thornton made clear that a program of widespread capital ownership has the potential to make people politically as well as economically free.
Nor did Thornton ignore the rights or concerns of propertyless non-agricultural workers. In fact, Thornton's proposal bears a striking resemblance to that of Louis Kelso and Mortimer Adler published in the late 1950s and early 1960s. (See Louis O. Kelso and Mortimer Adler, The Capitalist Manifesto. New York: Random House, 1958; The New Capitalists. New York: Random House, 1961) In 1869, Thornton published A Treatise On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, (London: Macmillan and Company, 1869) revising it in 1870. This work strengthened his point that the only solution to the conflict between "labor" and "capital" is for workers and owners to form an alliance, with workers becoming owners with defined rights to profits and control. As he summarized the benefits of such an alliance,
"For mistrust and dislike or indifference on the one side, and for envy and jealousy on the other, would be substituted something of that fellow-feeling which can scarcely help growing up between those who, in serving themselves, are helping each other. With those laborers who had taken shares, some sympathy with capital would tincture the old headlong passion in favor of labor. With those who had not yet become shareholders the possibility of their becoming so subsequently would have a like effect." (William Thomas Thornton, On Labour: Its Wrongful Claims and Rightful Dues, Its Actual Present and Possible Future, Second Edition. London: Macmillan and Company, 1870, 394.)
Not surprisingly, this had also been the contention of Charles Morrison in his pivotal An Essay on the Relations Between Labour and Capital (London: Longman, Brown, Green, and Longmans, 1854. Morrison's book was influential in the reform of the Law of Partnerships and adoption of the Limited Liability Act of 1855 (18 & 19 Vict c 133), his goal being to lift one of the chief barriers preventing or inhibiting worker ownership.) published in 1854 — and would be repeated by Pope Leo XIII in the epochal Rerum Novarum in 1891, usually regarded as the first social encyclical, "On Capital and Labor": (Pope Leo XIII, Rerum Novarum ("On Capital and Labor"), 1891. N.B.: "On Capital and Labor" is the current official title in English. Many other titles have been used.)
"We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners." (Rerum Novarum, § 46.)
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THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.
Thursday, January 12, 2012
Wednesday, January 11, 2012
Raw Judicial Power VI: "Crosskey's Once and Future Constitution"
As we saw in the previous posting in this series, to understand what happened in the Roe v. Wade decision, we first have to understand the basis of law assumed by the framers of the U.S. Constitution. We then have a task much harder than most people are willing to undertake. That is to realize that Roe v. Wade was not an isolated instance. It was, rather, the result of the development of a line of thought that has plagued humanity from the beginning of the idea, even the nature of law itself.
If we study the analysis of William Winslow Crosskey (1894-1968) in his uncompleted magnum opus, Politics and the Constitution in the History of the United States (Chicago, Illinois: University of Chicago Press, 1953), we might conclude that the United States Supreme Court has been engaged in what amounts to a power-grab almost from the moment of its establishment. This has resulted in the United States government operating in a manner never intended by the Founding Fathers of the American Republic. The inevitable consequence has been a usurpation of individual sovereignty and the undermining of the natural law on which the government of the United States is based.
Legislation by judiciary has been responsible for the effective emasculation not only of the individual natural rights protected by the 9th and 10th Amendments to the Constitution, but of the powers of Congress itself. Congress, while intended as the direct representative of the people to be the chief governing body of the country, has seen its role diminish. In response there has been a growth of overreaching executive power.
With the inability of the Congress to act in many cases as a result of the restriction of its powers by the expansion of the concept of judicial review beyond all bounds, the more general powers of the executive, being less amenable to judicial review, have necessarily stepped in to fill the void. Nature abhors a vacuum, and nowhere is this more true than when power is the issue.
This is, according to Crosskey, directly contrary to what the Founders intended. As one commentator on Crosskey's work summarized Crosskey's analysis (page references are to Politics and the Constitution, op. cit.),
"The separation of powers was to be complete enough that each branch, including the dominant legislative branch, would interpret its own powers (pp. 1008-1035). There were certain checks and balances, to be sure, but judicial review by the Supreme Court of acts of Congress was not among them, except to the limited extent of protecting judicial prerogatives (pp. 1002-1007)." (Laurin A. Wollan, Jr., "Crosskey's Once and Future Constitution," The Political Science Reviewer, Volume 5, No. 1, Fall 1975, 131.)
As matters have developed, however, the only check on the growth of the power of the United States Supreme Court is that the Court can only act in response to specific legislation; it is necessarily passive, and cannot take an active role. The Court can only act when a case is brought before it. As the history of the Court has amply demonstrated, however, this check has been far from adequate.
In order to understand how to counter this state of affairs and restore the natural law to its primacy of place in the United States, we have to know how the situation developed. As far as we have been able to determine, the decision in Roe v. Wade was the culmination of a long process that began even before the adoption of the U.S. Constitution.
The attack on the natural right to life was preceded by attacks on liberty in Scott v. Sandford in 1857, and on property in the Slaughterhouse Cases in 1873. The mindset that led to the pro-slavery decision in the Dred Scott case and the anti-property decision in the Slaughterhouse Cases is the same that led to the anti-life decision in Roe v. Wade.
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If we study the analysis of William Winslow Crosskey (1894-1968) in his uncompleted magnum opus, Politics and the Constitution in the History of the United States (Chicago, Illinois: University of Chicago Press, 1953), we might conclude that the United States Supreme Court has been engaged in what amounts to a power-grab almost from the moment of its establishment. This has resulted in the United States government operating in a manner never intended by the Founding Fathers of the American Republic. The inevitable consequence has been a usurpation of individual sovereignty and the undermining of the natural law on which the government of the United States is based.
Legislation by judiciary has been responsible for the effective emasculation not only of the individual natural rights protected by the 9th and 10th Amendments to the Constitution, but of the powers of Congress itself. Congress, while intended as the direct representative of the people to be the chief governing body of the country, has seen its role diminish. In response there has been a growth of overreaching executive power.
With the inability of the Congress to act in many cases as a result of the restriction of its powers by the expansion of the concept of judicial review beyond all bounds, the more general powers of the executive, being less amenable to judicial review, have necessarily stepped in to fill the void. Nature abhors a vacuum, and nowhere is this more true than when power is the issue.
This is, according to Crosskey, directly contrary to what the Founders intended. As one commentator on Crosskey's work summarized Crosskey's analysis (page references are to Politics and the Constitution, op. cit.),
"The separation of powers was to be complete enough that each branch, including the dominant legislative branch, would interpret its own powers (pp. 1008-1035). There were certain checks and balances, to be sure, but judicial review by the Supreme Court of acts of Congress was not among them, except to the limited extent of protecting judicial prerogatives (pp. 1002-1007)." (Laurin A. Wollan, Jr., "Crosskey's Once and Future Constitution," The Political Science Reviewer, Volume 5, No. 1, Fall 1975, 131.)
As matters have developed, however, the only check on the growth of the power of the United States Supreme Court is that the Court can only act in response to specific legislation; it is necessarily passive, and cannot take an active role. The Court can only act when a case is brought before it. As the history of the Court has amply demonstrated, however, this check has been far from adequate.
In order to understand how to counter this state of affairs and restore the natural law to its primacy of place in the United States, we have to know how the situation developed. As far as we have been able to determine, the decision in Roe v. Wade was the culmination of a long process that began even before the adoption of the U.S. Constitution.
The attack on the natural right to life was preceded by attacks on liberty in Scott v. Sandford in 1857, and on property in the Slaughterhouse Cases in 1873. The mindset that led to the pro-slavery decision in the Dred Scott case and the anti-property decision in the Slaughterhouse Cases is the same that led to the anti-life decision in Roe v. Wade.
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Tuesday, January 10, 2012
Raw Judicial Power V: The Nature of Law
The fixed idea today is that passing a law or handing down a court decision makes it so. Supporters of abortion endlessly chant the mantra, "It's perfectly legal," even though that declaration and the orientation behind it are flawed on many levels. The problem is that the orientation that the judiciary can somehow create law instead of being restricted to interpreting and applying the law is legal positivism at its finest — or worst, depending on your orientation.
This surfaces another problem, one with which the Pro-Life movement has failed — in some cases refused — to deal with. A proper understanding of the decision in Roe v. Wade reveals the "soft underbelly" of the Pro-Choice position: the idea that the State in the person of the Supreme Court, the Congress or the President can decide on basic issues of right and wrong, that is, the natural law, and thus what comprises a law or court decision that is consistent with the Constitution of the United States, a document based on the natural law.
This shifts power away from both individuals as themselves and organized into groups in an exercise of personal sovereignty and freedom of association, to what is effectively an all-powerful State. Inalienable rights become alienable by the simple expedient of redefining basic terms, and are viewed as bestowed by the State as expedient or prudent, and not because they inhere absolutely in each human being.
Nevertheless, as we saw in the previous posting in this series, human positive law — if it is to be considered just — is necessarily grounded in what our study of human nature and our reason reveal to be right or wrong: the natural law. The chief precept of the natural law is that good is to be done, and evil avoided. Aristotle defines "good" as that which is in conformity with nature. Thus, anything that goes contrary to nature, especially if it violates humanity's natural rights to life, liberty (freedom of association/contract), property and the pursuit of happiness, must be construed as wrong, regardless how many or how strong the proponents advocating the change. Might does not make right.
As Harry V. Jaffa pointed out in his book on the Constitution (Original Intent and the Framers of the Constitution. New York: Regnery Publishing Company, 1994), and as William Winslow Crosskey took as his thesis in his monumental Politics and the Constitution in the History of the United States (Chicago, Illinois: University of Chicago Press, 1953), no one, including the U.S. Supreme Court, can interpret the Constitution — constantly cited as "the law of the land" by supporters of Roe v. Wade — without knowing what the words mean . . . and, especially, what the framers of the Constitution meant by those words. In spite of that, as Crosskey related, the constitutional history of the United States has been a long chronicle of ongoing efforts to subvert the original intent and accepted definitions of terms in the U.S. Constitution from the system envisioned by the Founders, to what is politically expedient or desirable to advance special interests.
The subversion of the U.S. Constitution by the very body established as its chief defender has been an absolute disaster. The whole idea of the proper role of the State and man's place in the State is turned on its head. Rather than the government existing for the benefit of the people and by the consent of the governed, each human being becomes "a mere creature of the State." Each human being has only such rights as the State chooses to recognize (and is thus a person only to that extent), and even, as Hilaire Belloc pointed out in The Servile State (1912), is permitted to exist — when permitted to exist — only on such terms as the State dictates.
Rather than work for the restoration of the U.S. Constitution on terms that would effectively overturn Roe v. Wade by making it obviously in violation of our natural right to life, the Pro-Life movement has allowed itself to be diverted into using the same legal philosophy, even the same judicial weapons as the Pro-Choice movement. If one court decision can take away the right to life (so they appear to reason), then another court decision can give it back.
On the contrary — overturning Roe v. Wade would do absolutely nothing if the Supreme Court of the United States continues to abrogate the natural law basis of the Constitution and assert its alleged power to decide what a person is. In natural law, all human beings are de facto persons as a result of the inalienable rights possessed by each human being. It is the possession of rights — not a court decision or even a constitutional amendment — that makes someone or something a person.
Neither the courts nor the legislature, nor even a presidential decree creates a natural person — and all human beings are automatically natural persons by the mere fact of their humanity. The natural personality of each human being is a fact established by definition, and cannot be taken away by redefinition, even though totalitarian political philosophy would have it so. Nor can personality be subject to a popular vote.
Thus, the tactic that the Pro-Life movement should be pursuing (not that there should be any diminution in the protests and demonstrations), is to prove that, in Roe v. Wade and other court decisions, the U.S. Supreme Court has violated the chief precept of the natural law: good is to be done. Given that the reason for life is to acquire and develop virtue and so develop more fully as human beings, this necessarily bases law on morality, that is, that which is good. The natural law written in the hearts of all men dictates what is good, thus the basic precept of the natural law is good is to be done, evil avoided.
Man being by nature a political animal, the State is made for man as an assist to the acquisition and development of virtue. Man is not made for the State. Therefore, anything that subordinates a natural right to political or economic expedience is a direct attack on the natural law, and thus undermines the very justification for having the State in the first place.
Consistent with the laws and characteristics of social justice (William J. Ferree, S.M., Ph.D., Introduction to Social Justice. New York: Paulist Press, 1948), the way to overturn Roe v. Wade is not to work directly on the decision itself, but on the "environment" — the legal philosophy — that made the decision possible. Restoring the original intent of the Constitution is more than merely passing laws or handing down court decisions. It is a matter of our whole approach to life and politics. If that remains unchanged, and the natural law continues to be rejected as the basis for society and government, all the court decisions, laws, or even constitutional amendments will not do one bit of good.
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This surfaces another problem, one with which the Pro-Life movement has failed — in some cases refused — to deal with. A proper understanding of the decision in Roe v. Wade reveals the "soft underbelly" of the Pro-Choice position: the idea that the State in the person of the Supreme Court, the Congress or the President can decide on basic issues of right and wrong, that is, the natural law, and thus what comprises a law or court decision that is consistent with the Constitution of the United States, a document based on the natural law.
This shifts power away from both individuals as themselves and organized into groups in an exercise of personal sovereignty and freedom of association, to what is effectively an all-powerful State. Inalienable rights become alienable by the simple expedient of redefining basic terms, and are viewed as bestowed by the State as expedient or prudent, and not because they inhere absolutely in each human being.
Nevertheless, as we saw in the previous posting in this series, human positive law — if it is to be considered just — is necessarily grounded in what our study of human nature and our reason reveal to be right or wrong: the natural law. The chief precept of the natural law is that good is to be done, and evil avoided. Aristotle defines "good" as that which is in conformity with nature. Thus, anything that goes contrary to nature, especially if it violates humanity's natural rights to life, liberty (freedom of association/contract), property and the pursuit of happiness, must be construed as wrong, regardless how many or how strong the proponents advocating the change. Might does not make right.
As Harry V. Jaffa pointed out in his book on the Constitution (Original Intent and the Framers of the Constitution. New York: Regnery Publishing Company, 1994), and as William Winslow Crosskey took as his thesis in his monumental Politics and the Constitution in the History of the United States (Chicago, Illinois: University of Chicago Press, 1953), no one, including the U.S. Supreme Court, can interpret the Constitution — constantly cited as "the law of the land" by supporters of Roe v. Wade — without knowing what the words mean . . . and, especially, what the framers of the Constitution meant by those words. In spite of that, as Crosskey related, the constitutional history of the United States has been a long chronicle of ongoing efforts to subvert the original intent and accepted definitions of terms in the U.S. Constitution from the system envisioned by the Founders, to what is politically expedient or desirable to advance special interests.
The subversion of the U.S. Constitution by the very body established as its chief defender has been an absolute disaster. The whole idea of the proper role of the State and man's place in the State is turned on its head. Rather than the government existing for the benefit of the people and by the consent of the governed, each human being becomes "a mere creature of the State." Each human being has only such rights as the State chooses to recognize (and is thus a person only to that extent), and even, as Hilaire Belloc pointed out in The Servile State (1912), is permitted to exist — when permitted to exist — only on such terms as the State dictates.
Rather than work for the restoration of the U.S. Constitution on terms that would effectively overturn Roe v. Wade by making it obviously in violation of our natural right to life, the Pro-Life movement has allowed itself to be diverted into using the same legal philosophy, even the same judicial weapons as the Pro-Choice movement. If one court decision can take away the right to life (so they appear to reason), then another court decision can give it back.
On the contrary — overturning Roe v. Wade would do absolutely nothing if the Supreme Court of the United States continues to abrogate the natural law basis of the Constitution and assert its alleged power to decide what a person is. In natural law, all human beings are de facto persons as a result of the inalienable rights possessed by each human being. It is the possession of rights — not a court decision or even a constitutional amendment — that makes someone or something a person.
Neither the courts nor the legislature, nor even a presidential decree creates a natural person — and all human beings are automatically natural persons by the mere fact of their humanity. The natural personality of each human being is a fact established by definition, and cannot be taken away by redefinition, even though totalitarian political philosophy would have it so. Nor can personality be subject to a popular vote.
Thus, the tactic that the Pro-Life movement should be pursuing (not that there should be any diminution in the protests and demonstrations), is to prove that, in Roe v. Wade and other court decisions, the U.S. Supreme Court has violated the chief precept of the natural law: good is to be done. Given that the reason for life is to acquire and develop virtue and so develop more fully as human beings, this necessarily bases law on morality, that is, that which is good. The natural law written in the hearts of all men dictates what is good, thus the basic precept of the natural law is good is to be done, evil avoided.
Man being by nature a political animal, the State is made for man as an assist to the acquisition and development of virtue. Man is not made for the State. Therefore, anything that subordinates a natural right to political or economic expedience is a direct attack on the natural law, and thus undermines the very justification for having the State in the first place.
Consistent with the laws and characteristics of social justice (William J. Ferree, S.M., Ph.D., Introduction to Social Justice. New York: Paulist Press, 1948), the way to overturn Roe v. Wade is not to work directly on the decision itself, but on the "environment" — the legal philosophy — that made the decision possible. Restoring the original intent of the Constitution is more than merely passing laws or handing down court decisions. It is a matter of our whole approach to life and politics. If that remains unchanged, and the natural law continues to be rejected as the basis for society and government, all the court decisions, laws, or even constitutional amendments will not do one bit of good.
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Monday, January 9, 2012
Raw Judicial Power IV: The Idea of Law
In the previous posting in this series we noted that (at least in the western political tradition), man is by nature a political animal. This is a possibly unique combination on Earth of an individual and social being, that is, a member of a group that retains individuality. The problem becomes how to balance individuality with the demands of being a member of a group.
Individualists try to solve this problem by asserting that while man is by nature an individual, he voluntarily joins with others in order to gain the mutual advantages that accrue to living in a group. This necessarily involves surrendering some rights in order to protect others, but that is the price you pay to gain safety and protection of your property. The job of each member of the group is to keep an eye on the governing body, and make certain that it doesn't take away any more rights than necessary to ensure the security of the remaining rights.
Collectivists argue that, since man is by nature a social animal, he is naturally a member of society. He joins with others because it is natural for him to do so, and he thus has no choice in the matter. All rights come from the group, being doled out only as necessary to keep people happy, and only so far as the exercise of individual rights does not come into conflict with the needs of the group.
The actual case is somewhat different. An Aristotelian or Thomist would point out that, since political is a combination of both individual and social, it is not an "either/or" situation. Man naturally gathers together in groups because our political nature necessarily implies the existence of a group, of others. "All politics is local" (attributed to "Tip" O'Neill), but it is not as local as to be limited to a single individual.
Yet, while it is natural for humanity to gather together into groups, the specific group is, up to a point, a matter of voluntary choice. People come together to form a particular society in response to humanity's social nature and to meet specific needs, but the formation of the group is generally voluntary, as is the particular form and function the group assumes in order to meet the social need for which the group is organized.
Further, while an individual may have no choice into which group, e.g., he or she was born into, continuation as a member of that group must be a matter of free choice, either implicit or explicit, once the individual reaches the age of reason or legal majority. That being the case, each member of a group has a personal responsibility for the maintenance of the group, and for its reform should the group no longer fulfill its social purpose.
There is no question of people surrendering some rights in order to secure others. Rights by their nature are only realized within a social setting, that is, within a group, "in society." A right is defined as the power to do or not do some act or acts in relation to others. This necessarily implies the existence of "others" in the group against whom rights are exercised. Each human being retains the full spectrum of natural rights vested in each person by human nature itself, but each group has to define the exercise of those rights so as to obtain the optimal enjoyment of rights by the individual without harm to other members of the group, or the institutions — the common good — of the group as a whole.
Each group, being formed for a specific purpose, must serve the general purpose of promoting the wellbeing of each member of the group. In Aristotelian philosophy this general purpose is to provide the opportunity and means for each member of the group to realize his or her fullest potential as a human being — to acquire and develop "virtue," that is, "human-ness": become more fully human. This involves establishing and maintaining the institutions, the "social tools" that humanity as a political animal normally requires to assist each individual in acquiring and developing virtue. All groups — including the State itself — are thus made for man, not man for the State.
All institutions should therefore be in material conformity with human nature — the natural law — or they are not fulfilling their proper function. The most obvious institutions in any society are manmade laws, that is, human positive law, but these are actually the least important institutions in the daily life of any group. As A. V. Dicey pointed out, without custom, tradition, and belief (what Dicey called "public opinion") to back up human positive law, few laws will be effective, or have the desired result.
Ordinarily the State formalizes into human positive law what the citizens already accept as law, or even the best-intentioned law can cause massive social disruption, even anarchy. Even the threat of a law that does not have popular support or goes contrary to accepted custom or tradition has the potential to destroy a society, as the belief prevalent in the American South that Abraham Lincoln would abolish slavery caused the Civil War, and Pro-Life agitation is seen by many people as a threat to a peaceful society and an attack on individual rights.
This raises another problem. The extreme individualist will assert that each person should obey only such laws (including custom and tradition) as he or she believes to be just or acceptable. Ultimately the sole standard against which to measure anything is individual opinion. The extreme collectivist will assert that all rights — and thus all laws (which alone are binding, negating custom and tradition) — come from the State, and must be obeyed without question simply because it is the law. The only standard that has any meaning or relevance is the needs of the State. Thus, while the orientations are at opposite ends of the spectrum, both the individualist and the collectivist end up in the same place: complete moral relativism and a rejection of anything that can be used as an objective and absolute standard against which to measure right and wrong, or the objective goodness or badness of human laws.
Moral relativism, however, whether it springs from individualism or collectivism, is not a sound basis for human society. By rejecting absolutes that can be discerned by reason alone and that apply to every member of the human race, or by denying inherent standards that apply outside a specific group, moral relativism takes a distorted view of the human person and thus human society based on human nature. As Heinrich Rommen explained,
"The idea of a natural law can emerge only when men come to perceive that not all law is unalterable and unchanging divine law. If can emerge only when critical reason, looking back over history, notes the profound changes that have occurred in the realm of law and mores and becomes aware of the diversity of the legal and moral institutions of its own people in the course of its history; and when, furthermore, gazing beyond the confines of its own city-state or tribe, it notices the dissimilarity of the institutions of neighboring peoples. When, therefore, human reason wonderingly verifies this diversity, it first arrives at the distinction between divine and human law. But it soon has to grapple with the natural law, with the question of the moral basis of human laws. This is at the same time the problem of why laws are binding. How can laws bind the conscience of an individual? Wherein lies, properly speaking, the ethical foundation of the coercive power of the state's legal and moral order?" (Heinrich Rommen, The Natural Law. Indianapolis, Indiana: Liberty Fund, Inc., 1998, 4.)
Thus, our idea of law should not be that it is something instituted to coerce people to act in ways that the most powerful or most popular have deemed desirable. It can be that, of course, and can even be just — assuming that the basis for what the powerful or popular have decided is desirable is in material conformity with human nature, with what people have discerned through the use of their reason to be good.
As a general rule, however, the whim of the mighty or the caprice of the crowd is not a good indicator of what is good. Laws based on mere power or popularity may not be what constitutes the optimal assistance each human being should receive from the institutions of society in order to develop more fully as a human being.
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Individualists try to solve this problem by asserting that while man is by nature an individual, he voluntarily joins with others in order to gain the mutual advantages that accrue to living in a group. This necessarily involves surrendering some rights in order to protect others, but that is the price you pay to gain safety and protection of your property. The job of each member of the group is to keep an eye on the governing body, and make certain that it doesn't take away any more rights than necessary to ensure the security of the remaining rights.
Collectivists argue that, since man is by nature a social animal, he is naturally a member of society. He joins with others because it is natural for him to do so, and he thus has no choice in the matter. All rights come from the group, being doled out only as necessary to keep people happy, and only so far as the exercise of individual rights does not come into conflict with the needs of the group.
The actual case is somewhat different. An Aristotelian or Thomist would point out that, since political is a combination of both individual and social, it is not an "either/or" situation. Man naturally gathers together in groups because our political nature necessarily implies the existence of a group, of others. "All politics is local" (attributed to "Tip" O'Neill), but it is not as local as to be limited to a single individual.
Yet, while it is natural for humanity to gather together into groups, the specific group is, up to a point, a matter of voluntary choice. People come together to form a particular society in response to humanity's social nature and to meet specific needs, but the formation of the group is generally voluntary, as is the particular form and function the group assumes in order to meet the social need for which the group is organized.
Further, while an individual may have no choice into which group, e.g., he or she was born into, continuation as a member of that group must be a matter of free choice, either implicit or explicit, once the individual reaches the age of reason or legal majority. That being the case, each member of a group has a personal responsibility for the maintenance of the group, and for its reform should the group no longer fulfill its social purpose.
There is no question of people surrendering some rights in order to secure others. Rights by their nature are only realized within a social setting, that is, within a group, "in society." A right is defined as the power to do or not do some act or acts in relation to others. This necessarily implies the existence of "others" in the group against whom rights are exercised. Each human being retains the full spectrum of natural rights vested in each person by human nature itself, but each group has to define the exercise of those rights so as to obtain the optimal enjoyment of rights by the individual without harm to other members of the group, or the institutions — the common good — of the group as a whole.
Each group, being formed for a specific purpose, must serve the general purpose of promoting the wellbeing of each member of the group. In Aristotelian philosophy this general purpose is to provide the opportunity and means for each member of the group to realize his or her fullest potential as a human being — to acquire and develop "virtue," that is, "human-ness": become more fully human. This involves establishing and maintaining the institutions, the "social tools" that humanity as a political animal normally requires to assist each individual in acquiring and developing virtue. All groups — including the State itself — are thus made for man, not man for the State.
All institutions should therefore be in material conformity with human nature — the natural law — or they are not fulfilling their proper function. The most obvious institutions in any society are manmade laws, that is, human positive law, but these are actually the least important institutions in the daily life of any group. As A. V. Dicey pointed out, without custom, tradition, and belief (what Dicey called "public opinion") to back up human positive law, few laws will be effective, or have the desired result.
Ordinarily the State formalizes into human positive law what the citizens already accept as law, or even the best-intentioned law can cause massive social disruption, even anarchy. Even the threat of a law that does not have popular support or goes contrary to accepted custom or tradition has the potential to destroy a society, as the belief prevalent in the American South that Abraham Lincoln would abolish slavery caused the Civil War, and Pro-Life agitation is seen by many people as a threat to a peaceful society and an attack on individual rights.
This raises another problem. The extreme individualist will assert that each person should obey only such laws (including custom and tradition) as he or she believes to be just or acceptable. Ultimately the sole standard against which to measure anything is individual opinion. The extreme collectivist will assert that all rights — and thus all laws (which alone are binding, negating custom and tradition) — come from the State, and must be obeyed without question simply because it is the law. The only standard that has any meaning or relevance is the needs of the State. Thus, while the orientations are at opposite ends of the spectrum, both the individualist and the collectivist end up in the same place: complete moral relativism and a rejection of anything that can be used as an objective and absolute standard against which to measure right and wrong, or the objective goodness or badness of human laws.
Moral relativism, however, whether it springs from individualism or collectivism, is not a sound basis for human society. By rejecting absolutes that can be discerned by reason alone and that apply to every member of the human race, or by denying inherent standards that apply outside a specific group, moral relativism takes a distorted view of the human person and thus human society based on human nature. As Heinrich Rommen explained,
"The idea of a natural law can emerge only when men come to perceive that not all law is unalterable and unchanging divine law. If can emerge only when critical reason, looking back over history, notes the profound changes that have occurred in the realm of law and mores and becomes aware of the diversity of the legal and moral institutions of its own people in the course of its history; and when, furthermore, gazing beyond the confines of its own city-state or tribe, it notices the dissimilarity of the institutions of neighboring peoples. When, therefore, human reason wonderingly verifies this diversity, it first arrives at the distinction between divine and human law. But it soon has to grapple with the natural law, with the question of the moral basis of human laws. This is at the same time the problem of why laws are binding. How can laws bind the conscience of an individual? Wherein lies, properly speaking, the ethical foundation of the coercive power of the state's legal and moral order?" (Heinrich Rommen, The Natural Law. Indianapolis, Indiana: Liberty Fund, Inc., 1998, 4.)
Thus, our idea of law should not be that it is something instituted to coerce people to act in ways that the most powerful or most popular have deemed desirable. It can be that, of course, and can even be just — assuming that the basis for what the powerful or popular have decided is desirable is in material conformity with human nature, with what people have discerned through the use of their reason to be good.
As a general rule, however, the whim of the mighty or the caprice of the crowd is not a good indicator of what is good. Laws based on mere power or popularity may not be what constitutes the optimal assistance each human being should receive from the institutions of society in order to develop more fully as a human being.
#30#
Friday, January 6, 2012
News from the Network, Vol. 5, No. 1
Welcome to the first issue of Volume Five of News from the Network. We have two predictions for the coming year. One, as what passes for global leadership continues to drift farther and farther (or is that "further and further"? we're never sure about that one . . . "flammable" or "inflammable," anyone?) from the principles of the Just Third Way, uncertainty and chaos will increase geometrically.
Two, if nothing is done to adopt Capital Homesteading in the world, we will see an acceleration of bankruptcies and failures from the individual level right up to the Nation-State. As one expert predicts, several "institutional" brands are in serious danger. If Sears is in trouble, you can bet that governments that have been increasing their "sovereign debt" loads without figuring out how to rebuild their tax bases are in even bigger trouble.
We hope that these predictions do not come true. To make sure that they do not, here's what we've been doing for the first week of 2012:
• On Tuesday, Monica W. in Cleveland attended a press conference of the Neighborhood Housing Services and met with Jim Rokakis, Director of Thriving Community Institute. She will be rescheduling a conference call with Norm in the near future. Jim is putting together county land banks across northern Ohio. She also met with Representative Dennis Kucinich, who told her to schedule a meeting through his secretary. Monica also spoke with Representative Marci Kaptur who, due to redistricting, will be running against Representative Kucinich in a three-way race against . . . Joe the Plumber. Joe Lunchbucket is standing out this election. Representative Kaptur agreed to a half-hour meeting (Monica asked for an hour). Monica also touched base with Lou Tisler, Executive Director of Neighborhood Housing Services, who said he wanted to meet. Monica also spoke with Cleveland City Council Member Anthony Brancatelli, who is very involved in the foreclosure crisis. He was part of what was called a "mocumentry," a mock trial titled Cleveland vs. Wall Street that focused on the Cleveland foreclosure crisis. It was a big hit at the Cleveland film festival last year (no surprise!) and made it to local theaters in the area. He agreed to a meeting and gave Monica his card and even wrote his cell phone number on the back. To top it off, Monica also got a handshake from Senator Sherrod Brown, but couldn't follow up as the Fourth Estate crowded around instantly.
• Also on Tuesday we met with Dr. Scott H., a physician with the Michigan Department of Corrections. Scott, who is a distributist, had heard Norm interviewed on Tuesdays With Tormala out of Grand Rapids, Michigan, and got in touch. Lunch was served following the meeting, where we met Scott's wife and six children. In a flurry of follow-up, Scott has already posted a review of In Defense of Human Dignity (2008) on Amazon, and is preparing to send out information on the Just Third Way to his entire internet network. In Defense of Human Dignity is already selling more copies, and Scott is preparing other reviews.
• Baron McGrath of Sealand is considering endorsing CESJ's annotated edition of William Thomas Thornton's A Plea for Peasant Proprietors.
• CESJ friend Lydia Fisher, author of Cinderella of Wall Street, (not to be confused with Lydia Jane Fisher, author of Letters from the Kingdom of Kerry in the Year 1845) posted a most thought-provoking piece on the Huffington Post under the title, "Everyone is Called to One Human Vocation — That of Being a Good Citizen and a Thoughtful Human Being . . ." The piece was inspired — surprise! — by an interview with Mortimer J. Adler Lydia viewed recently. You'll get more out of the article by reading it first-hand rather than a summary, so we'll just say that it is consistent with the natural law principles of the Just Third Way, as you might expect from something inspired by Adler.
• As of this morning, we have had visitors from 61 different countries and 48 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Australia. People in Germany, Russia, Argentina, Australia, and the U.K. spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Aristotle on Private Property," "'The Market Must Never Neglect Solidarity'," and "Ron Paul and Creating Money."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
Two, if nothing is done to adopt Capital Homesteading in the world, we will see an acceleration of bankruptcies and failures from the individual level right up to the Nation-State. As one expert predicts, several "institutional" brands are in serious danger. If Sears is in trouble, you can bet that governments that have been increasing their "sovereign debt" loads without figuring out how to rebuild their tax bases are in even bigger trouble.
We hope that these predictions do not come true. To make sure that they do not, here's what we've been doing for the first week of 2012:
• On Tuesday, Monica W. in Cleveland attended a press conference of the Neighborhood Housing Services and met with Jim Rokakis, Director of Thriving Community Institute. She will be rescheduling a conference call with Norm in the near future. Jim is putting together county land banks across northern Ohio. She also met with Representative Dennis Kucinich, who told her to schedule a meeting through his secretary. Monica also spoke with Representative Marci Kaptur who, due to redistricting, will be running against Representative Kucinich in a three-way race against . . . Joe the Plumber. Joe Lunchbucket is standing out this election. Representative Kaptur agreed to a half-hour meeting (Monica asked for an hour). Monica also touched base with Lou Tisler, Executive Director of Neighborhood Housing Services, who said he wanted to meet. Monica also spoke with Cleveland City Council Member Anthony Brancatelli, who is very involved in the foreclosure crisis. He was part of what was called a "mocumentry," a mock trial titled Cleveland vs. Wall Street that focused on the Cleveland foreclosure crisis. It was a big hit at the Cleveland film festival last year (no surprise!) and made it to local theaters in the area. He agreed to a meeting and gave Monica his card and even wrote his cell phone number on the back. To top it off, Monica also got a handshake from Senator Sherrod Brown, but couldn't follow up as the Fourth Estate crowded around instantly.
• Also on Tuesday we met with Dr. Scott H., a physician with the Michigan Department of Corrections. Scott, who is a distributist, had heard Norm interviewed on Tuesdays With Tormala out of Grand Rapids, Michigan, and got in touch. Lunch was served following the meeting, where we met Scott's wife and six children. In a flurry of follow-up, Scott has already posted a review of In Defense of Human Dignity (2008) on Amazon, and is preparing to send out information on the Just Third Way to his entire internet network. In Defense of Human Dignity is already selling more copies, and Scott is preparing other reviews.
• Baron McGrath of Sealand is considering endorsing CESJ's annotated edition of William Thomas Thornton's A Plea for Peasant Proprietors.
• CESJ friend Lydia Fisher, author of Cinderella of Wall Street, (not to be confused with Lydia Jane Fisher, author of Letters from the Kingdom of Kerry in the Year 1845) posted a most thought-provoking piece on the Huffington Post under the title, "Everyone is Called to One Human Vocation — That of Being a Good Citizen and a Thoughtful Human Being . . ." The piece was inspired — surprise! — by an interview with Mortimer J. Adler Lydia viewed recently. You'll get more out of the article by reading it first-hand rather than a summary, so we'll just say that it is consistent with the natural law principles of the Just Third Way, as you might expect from something inspired by Adler.
• As of this morning, we have had visitors from 61 different countries and 48 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Australia. People in Germany, Russia, Argentina, Australia, and the U.K. spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Aristotle on Private Property," "'The Market Must Never Neglect Solidarity'," and "Ron Paul and Creating Money."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
Thursday, January 5, 2012
Foreword to W. T. Thornton's "A Plea for Peasant Proprietors" (1)
Often the exigencies of modern life take their toll. Nowhere is this more evident than when trying to keep up with a daily blog when your time gets taken up elsewhere and you don't have the next installment of your planned series drafted. Since that is the case today, we will sneak in a brief snippet from the foreword to our annotated edition of William Thomas Thornton's A Plea for Peasant Proprietors. If you can't wait for the next unscheduled installment, you can go to the book's website and download the free .pdf or follow the links on the website to Amazon and Barnes and Noble. Anyway, here goes:
Ireland is in crisis. Its economy is on the verge of collapse. Short-term "solutions" are only buying time until the next disaster. Politicians, academics, and business leaders are floundering helplessly in the face of the failure of a global financial system that they never understood in the first place. Proposals to correct the problem are only making matters worse and increasing the magnitude of the inevitable breakdown. In this, Ireland is a bellwether of where the global economy is headed.
Growing agitation about the crisis is spreading throughout the world. People from across the political spectrum are complaining about the economy. From the "Tea Party" movement in the United States, to the recent "Occupy Wall Street" phenomenon, complaints are becoming louder, in some cases violent — but nobody is doing or suggesting anything more than proposals that have already failed miserably.
There is a solution — and one that applies not only to Ireland, but to the United States and the rest of the global economy. The solution is one developed more than a century and a half ago to address a catastrophe in comparison with which today's problems pale in significance. While it was ignored then, Thornton's solution and vision of a more just and humane future for all was relevant 150 years ago. Updated to the needs of a technologically advanced civilization, it is even more relevant today.
Following "Black '47," the worst year of the Great Famine in Ireland (1846-1852), William Thomas Thornton, a clerk in the London office of the East India Company, proposed a solution to the disaster that had struck Ireland. Thornton's remedy was revolutionary, though hardly new or unique: vest the common people of Ireland with direct ownership of the landed capital of Ireland. Thornton believed his solution would end the famine, eliminate widespread poverty, diminish the threat of violence and rebellion, and establish a native "middle class." He published his proposal in 1848 as A Plea for Peasant Proprietors.
#30#
Ireland is in crisis. Its economy is on the verge of collapse. Short-term "solutions" are only buying time until the next disaster. Politicians, academics, and business leaders are floundering helplessly in the face of the failure of a global financial system that they never understood in the first place. Proposals to correct the problem are only making matters worse and increasing the magnitude of the inevitable breakdown. In this, Ireland is a bellwether of where the global economy is headed.
Growing agitation about the crisis is spreading throughout the world. People from across the political spectrum are complaining about the economy. From the "Tea Party" movement in the United States, to the recent "Occupy Wall Street" phenomenon, complaints are becoming louder, in some cases violent — but nobody is doing or suggesting anything more than proposals that have already failed miserably.
There is a solution — and one that applies not only to Ireland, but to the United States and the rest of the global economy. The solution is one developed more than a century and a half ago to address a catastrophe in comparison with which today's problems pale in significance. While it was ignored then, Thornton's solution and vision of a more just and humane future for all was relevant 150 years ago. Updated to the needs of a technologically advanced civilization, it is even more relevant today.
Following "Black '47," the worst year of the Great Famine in Ireland (1846-1852), William Thomas Thornton, a clerk in the London office of the East India Company, proposed a solution to the disaster that had struck Ireland. Thornton's remedy was revolutionary, though hardly new or unique: vest the common people of Ireland with direct ownership of the landed capital of Ireland. Thornton believed his solution would end the famine, eliminate widespread poverty, diminish the threat of violence and rebellion, and establish a native "middle class." He published his proposal in 1848 as A Plea for Peasant Proprietors.
#30#
Wednesday, January 4, 2012
Raw Judicial Power III: The Role of the Group
Aristotle characterized man as being by nature a political animal. This is a possibly unique combination on Earth of individual and social natures combined in a single being. As an individual, each human being has certain powers to do or not do acts. Because human beings are naturally political, that is, members of society, these powers are always exercised in relation to others in that society. These powers exercised in relation to others are called "rights." The existence of a right necessarily implies society — "others" against whom rights are to be exercised; rights cannot be exercised in a social vacuum.
A right therefore necessarily consists of the powers inherent or vested in the individual to require other individuals or groups to do or not do some act in relation to the right holder. Someone or something (rights can be delegated, even to things) that has rights is called a "person." Someone that has rights by nature is called a "natural person." Something that has rights delegated to it is called an "artificial person." The only natural persons recognized legally in the United States are human beings.
An artificial person can be a thing or a natural person. This sounds paradoxical, but is not. An individual human being is a natural person. A group of natural persons, however, is a thing. If a group is organized, there must be some individual or subgroup in charge for the purposes of governance, even if the subgroup is a "committee of the whole," that is, the group makes every decision by consulting every member of the group.
A governing individual or subgroup only receives the right to make decisions by delegation from the members of the main group. This process, however, is not direct. The members of a group first delegate the decision-making power to the group. The members of the group then select the governing individual or body, which thereby receives the right to govern from the group as a whole.
Were this not the case, any member of a group could withdraw his or her consent to the selection of the governing individual or body simply by rejecting the governor's authority on the grounds that he or she chose not to accept that authority. Because, however, the delegation of the right to govern was vested first in the group as a corporate body, and then from the group to the group's selected governor, the individual members of the group no longer retain the right to reject the authority of the group's chosen governor arbitrarily. They can only do so for just cause and through due process.
While individuals retain the right to disassociate themselves from the group and thereby reject the duly appointed governor's authority for just cause and by following due process, this is not always prudent or expedient. Aquinas advised that, even in the face of glaring injustice, a change of governors or, especially, the system itself be undertaken only after due consideration and in concert with "the best people" in the community. (William J. Ferree, S.M., Ph.D., analyzed this process in The Act of Social Justice, Washington, DC: The Catholic University of America Press, 1943, and summarized the presentation in Introduction to Social Justice, New York: The Paulist Press, 1948.)
The point to be made here, however, is that a governor of a group, whether a single individual or a governing body composed of a number of individuals or smaller groups within the larger group, has two distinct characters. An individual, regardless of his or her position in a group, always remains an individual, a natural person, entitled to all the rights, and subject to all the duties of any other natural person in that group.
At the same time, filling an official position gives a natural person the additional character of an artificial person, exercising rights on behalf of the group, and subject to duties adhering to him or her not as an individual, but as the delegated agent of the group. The individual as an individual remains a natural person with natural rights, regardless of his or her official position. At the same time, as a member of a group that has been vested with powers by the group, the governor is also an artificial person with only those rights that the group has delegated to the governor as an agent of the group.
The question then becomes, Why form groups in the first place? The answer is that, because man is by nature a political animal, it is natural to do things politically, that is, in an organized group that, at the same time that it is engaged in social action, respects the individual rights of every member of the group. Individual people thus ordinarily organize in free association with others of their kind in order to satisfy their wants and needs, whether the purely material, or the highest spiritual.
At one time, this political nature of humanity was realized most fully in the United States. As Alexis de Tocqueville observed,
"Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds — religious, moral, serious, futile, extensive, or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found establishments for education, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; and in this manner they found hospitals, prisons, and schools. If it be proposed to advance some truth, or to foster some feeling by the encouragement of a great example, they form a society. Wherever, at the head of some new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association. I met with several kinds of associations in America, of which I confess I had no previous notion; and I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it. I have since travelled over England, whence the Americans have taken some of their laws and many of their customs; and it seemed to me that the principle of association was by no means so constantly or so adroitly used in that country. The English often perform great things singly; whereas the Americans form associations for the smallest undertakings. It is evident that the former people consider association as a powerful means of action, but the latter seem to regard it as the only means they have of acting." (Alexis de Tocqueville, "Of The Use Which The Americans Make Of Public Associations In Civil Life" Democracy in America, Volume II, 1840.)
The bottom line is that any group, from the family on up to the most powerful Nation-State, only exists ultimately to serve the needs of individuals, and to provide an environment within which it is ordinarily possible for the average individual to develop more fully as a human being. Thus we say that the State is made for man, not man for the State.
Sometimes the needs of the State or of the common good require an extraordinary sacrifice from some citizens. This, however, can only be justified if the sacrifice in no way violates those persons' inherent, natural rights, and if the sacrifice is required to preserve the common good. It is never justifiable to sacrifice an innocent person or violate his or her rights, even to obtain the greatest perceived good for any individual or group.
#30#
A right therefore necessarily consists of the powers inherent or vested in the individual to require other individuals or groups to do or not do some act in relation to the right holder. Someone or something (rights can be delegated, even to things) that has rights is called a "person." Someone that has rights by nature is called a "natural person." Something that has rights delegated to it is called an "artificial person." The only natural persons recognized legally in the United States are human beings.
An artificial person can be a thing or a natural person. This sounds paradoxical, but is not. An individual human being is a natural person. A group of natural persons, however, is a thing. If a group is organized, there must be some individual or subgroup in charge for the purposes of governance, even if the subgroup is a "committee of the whole," that is, the group makes every decision by consulting every member of the group.
A governing individual or subgroup only receives the right to make decisions by delegation from the members of the main group. This process, however, is not direct. The members of a group first delegate the decision-making power to the group. The members of the group then select the governing individual or body, which thereby receives the right to govern from the group as a whole.
Were this not the case, any member of a group could withdraw his or her consent to the selection of the governing individual or body simply by rejecting the governor's authority on the grounds that he or she chose not to accept that authority. Because, however, the delegation of the right to govern was vested first in the group as a corporate body, and then from the group to the group's selected governor, the individual members of the group no longer retain the right to reject the authority of the group's chosen governor arbitrarily. They can only do so for just cause and through due process.
While individuals retain the right to disassociate themselves from the group and thereby reject the duly appointed governor's authority for just cause and by following due process, this is not always prudent or expedient. Aquinas advised that, even in the face of glaring injustice, a change of governors or, especially, the system itself be undertaken only after due consideration and in concert with "the best people" in the community. (William J. Ferree, S.M., Ph.D., analyzed this process in The Act of Social Justice, Washington, DC: The Catholic University of America Press, 1943, and summarized the presentation in Introduction to Social Justice, New York: The Paulist Press, 1948.)
The point to be made here, however, is that a governor of a group, whether a single individual or a governing body composed of a number of individuals or smaller groups within the larger group, has two distinct characters. An individual, regardless of his or her position in a group, always remains an individual, a natural person, entitled to all the rights, and subject to all the duties of any other natural person in that group.
At the same time, filling an official position gives a natural person the additional character of an artificial person, exercising rights on behalf of the group, and subject to duties adhering to him or her not as an individual, but as the delegated agent of the group. The individual as an individual remains a natural person with natural rights, regardless of his or her official position. At the same time, as a member of a group that has been vested with powers by the group, the governor is also an artificial person with only those rights that the group has delegated to the governor as an agent of the group.
The question then becomes, Why form groups in the first place? The answer is that, because man is by nature a political animal, it is natural to do things politically, that is, in an organized group that, at the same time that it is engaged in social action, respects the individual rights of every member of the group. Individual people thus ordinarily organize in free association with others of their kind in order to satisfy their wants and needs, whether the purely material, or the highest spiritual.
At one time, this political nature of humanity was realized most fully in the United States. As Alexis de Tocqueville observed,
"Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds — religious, moral, serious, futile, extensive, or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found establishments for education, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; and in this manner they found hospitals, prisons, and schools. If it be proposed to advance some truth, or to foster some feeling by the encouragement of a great example, they form a society. Wherever, at the head of some new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association. I met with several kinds of associations in America, of which I confess I had no previous notion; and I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it. I have since travelled over England, whence the Americans have taken some of their laws and many of their customs; and it seemed to me that the principle of association was by no means so constantly or so adroitly used in that country. The English often perform great things singly; whereas the Americans form associations for the smallest undertakings. It is evident that the former people consider association as a powerful means of action, but the latter seem to regard it as the only means they have of acting." (Alexis de Tocqueville, "Of The Use Which The Americans Make Of Public Associations In Civil Life" Democracy in America, Volume II, 1840.)
The bottom line is that any group, from the family on up to the most powerful Nation-State, only exists ultimately to serve the needs of individuals, and to provide an environment within which it is ordinarily possible for the average individual to develop more fully as a human being. Thus we say that the State is made for man, not man for the State.
Sometimes the needs of the State or of the common good require an extraordinary sacrifice from some citizens. This, however, can only be justified if the sacrifice in no way violates those persons' inherent, natural rights, and if the sacrifice is required to preserve the common good. It is never justifiable to sacrifice an innocent person or violate his or her rights, even to obtain the greatest perceived good for any individual or group.
#30#
Tuesday, January 3, 2012
Raw Judicial Power II: Bad Assumptions Make Bad Law
It is a standard legal aphorism — albeit one typically ignored by legislators — that "hard cases make bad law." As Oliver Wendell Holmes, Jr. commented in his dissenting opinion in Northern Securities Company v. The United States (193 U.S. 197 (1904)), "Great cases like hard cases make bad law. For great cases are called great, not by reason of their importance . . . but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment." We see this especially in court cases like The State of Tennessee v. John Thomas Scopes (1925) — "the Scopes Monkey Trial" — and Roe v. Wade (410 U.S. 113 (1973)) that were deliberately used as "test cases" to change a law through judicial action rather than the legislative process.
We can expand on Justice Holmes's comment by adding that bad assumptions, like hard cases, make bad law. How it is possible for a court to create law and to understand what happened in the Roe v. Wade decision, we first have to understand the basis of law assumed by the framers of the U.S. Constitution, how that has been changed and then — perhaps a task much harder than most people are willing to undertake — realize that Roe v. Wade was not an isolated instance. Roe v. Wade is, instead, the logical result of the development of a line of thought that has plagued humanity from the beginning of the idea of law itself. Understanding this is of primary importance if the Pro-Life movement is to make any lasting advances that can be sustained on a foundation of the natural law.
The Pro-Life movement has been hamstrung from the very beginning by a number of assumptions. Ironically, many of these assumptions are based on the same flawed understanding of law that led to the decision in Roe v. Wade. These assumptions take for granted the bloated role of the State, distorted concepts of human dignity and sovereignty, even the complete separation of morality and law that the Pro-Choice movement also accepts without question.
These assumptions affect the awareness of man as a political animal. This, in turn, influences our understanding and definition of the exercise of natural rights of life, liberty and property, and the application of those rights within the common good. Our understanding of man as a political animal and the natural law affects especially our acceptance of the "analogously complete" capacity of each human being to acquire and develop virtue — "pursue happiness" — and thereby become more fully human.
Thus, where the Pro-Choice movement bases a large part of its justification for its position on the decision in Roe v. Wade, the Pro-Life movement concentrates on overturning Roe v. Wade and, in part, agitating for the adoption of a constitutional amendment to guarantee the natural right to life. Not considered is the fact that our constitutional history as related by William Crosskey demonstrates the futility of a constitutional amendment to oppose special interests championed by the United States Supreme Court.
There are many reasons why a constitutional amendment would not have the desired effect, especially in the prevailing climate of legal and moral positivism. Some of these have to do with the nature of law itself, others with the nature of politics. In no particular order, some of the major reasons are:
Misguided or Poorly Formed Public Opinion. No law, custom or tradition will be effective unless what constitutional scholar Albert Venn Dicey described as "public opinion" is behind it. Regardless of the justice or injustice of a particular law, custom or tradition, people must accept the law and be prepared to obey it, for whatever reason. Otherwise a law may have no effect, have a different effect than what was intended, or even have the opposite effect of what was intended. If the public as a whole has a poorly formed conscience or moral sense, this will be reflected in the laws that are accepted.
Expanded Role of the State. One of the "four pillars" of a just society in terms of the natural law is a limited economic role for the State. The more a society subordinates anything that is true in order to reach a political goal, the more unjust a society becomes, and the more the coercive power of the State is employed in an effort to maintain the status quo. Paradoxically, the more the State interferes to maintain the status quo or impose a false or superficial solidarity, the more quickly the social order degenerates as a result of violating the fundamental principles of subsidiarity and solidarity. Looking to the State to pass a law in order to impose a desired result is often self-defeating. Even when successful the effort undermines essential human dignity and violates the sovereignty of the human person by unnecessarily or unjustly restricting human liberty.
Rejection of Free Markets. A free market is essential to maintaining individual human sovereignty and thus securing and protecting human dignity through the exercise of liberty and private property, that is, freedom of association and contract involving the free exchange of marketable goods and services. By "free market," however, we do not mean a market in which "anything goes," but a market that all are free to enter and participate in as consumers and producers, and where the rules are clear, understandable, and enforced without prejudice. Misunderstanding this principle or interpreting it as promoting a "law of the jungle" environment sets the stage for what is effectively anarchy and "might makes right," or fascism in a misguided effort to bring order out of chaos.
Misunderstanding of Private Property. Understanding private property is crucial to recognizing and protecting essential human dignity and the sovereignty of the human person. Many people confuse "property" — ownership — with what is owned. On the contrary, property is, one, the natural right that every human being has to be an owner, and, two, the socially determined bundle of rights that define how an owner may use what he or she possesses, and (depending on the needs of the common good) what and how much can be possessed, as long as limitations do not unjustly or unnecessarily infringe on the underlying natural right to be an owner. Distortions of property that assert absolute exercise, or that the right to be an owner is not inherent (absolute) in the human person equally undermine private property as the chief support for the natural rights of life and liberty.
Alleged Economic Necessity. One of the strongest motivators for accepting even an unjust law is the need to make a living. In this respect, it is noteworthy that David Christy, author of Cotton is King (1855), one of the most persuasive defenses of chattel slavery in the American south before the Civil War, was a former abolitionist. While Christy continued to abhor slavery as an institution, he defended it on the grounds of economic necessity. Christy contended that the economic survival of the United States and the British Empire depended absolutely on the continuance of slavery in order to secure adequate supplies of American agricultural products, especially cotton, to support the industrial revolution. The modern wage system and concentrated ownership of capital, whether in private hands (capitalism) or the State (socialism) are justified on similar grounds, predominantly the need to secure adequate financing for new capital formation out of past savings.
All of these reasons — and more — demonstrate the degree to which the idea of the natural law has decayed in our society. Each one represents a more or less successful effort to undermine the natural law by subverting a common sense understanding of one or more natural rights, especially life, liberty, property, and the acquisition and development of virtue (pursuit of happiness), and making something other than truth the justification for changing the law or the social order.
The acquisition and development of virtue, especially, and somewhat paradoxically, is critical. It is a natural right itself to develop more fully as a person by acquiring and developing virtue — "pursuing happiness." The exercise of the right to acquire and develop virtue, however, necessarily implies the right to exercise the other natural rights, especially life, liberty and property. This is because exercising rights is the means by which human beings acquire and develop virtue. Thus, unless the right to develop more fully as a person is recognized and protected as the reason for even having rights at all, the probability is high that the exercise or even existence of life, liberty and property will either be denied or distorted.
#30#
We can expand on Justice Holmes's comment by adding that bad assumptions, like hard cases, make bad law. How it is possible for a court to create law and to understand what happened in the Roe v. Wade decision, we first have to understand the basis of law assumed by the framers of the U.S. Constitution, how that has been changed and then — perhaps a task much harder than most people are willing to undertake — realize that Roe v. Wade was not an isolated instance. Roe v. Wade is, instead, the logical result of the development of a line of thought that has plagued humanity from the beginning of the idea of law itself. Understanding this is of primary importance if the Pro-Life movement is to make any lasting advances that can be sustained on a foundation of the natural law.
The Pro-Life movement has been hamstrung from the very beginning by a number of assumptions. Ironically, many of these assumptions are based on the same flawed understanding of law that led to the decision in Roe v. Wade. These assumptions take for granted the bloated role of the State, distorted concepts of human dignity and sovereignty, even the complete separation of morality and law that the Pro-Choice movement also accepts without question.
These assumptions affect the awareness of man as a political animal. This, in turn, influences our understanding and definition of the exercise of natural rights of life, liberty and property, and the application of those rights within the common good. Our understanding of man as a political animal and the natural law affects especially our acceptance of the "analogously complete" capacity of each human being to acquire and develop virtue — "pursue happiness" — and thereby become more fully human.
Thus, where the Pro-Choice movement bases a large part of its justification for its position on the decision in Roe v. Wade, the Pro-Life movement concentrates on overturning Roe v. Wade and, in part, agitating for the adoption of a constitutional amendment to guarantee the natural right to life. Not considered is the fact that our constitutional history as related by William Crosskey demonstrates the futility of a constitutional amendment to oppose special interests championed by the United States Supreme Court.
There are many reasons why a constitutional amendment would not have the desired effect, especially in the prevailing climate of legal and moral positivism. Some of these have to do with the nature of law itself, others with the nature of politics. In no particular order, some of the major reasons are:
Misguided or Poorly Formed Public Opinion. No law, custom or tradition will be effective unless what constitutional scholar Albert Venn Dicey described as "public opinion" is behind it. Regardless of the justice or injustice of a particular law, custom or tradition, people must accept the law and be prepared to obey it, for whatever reason. Otherwise a law may have no effect, have a different effect than what was intended, or even have the opposite effect of what was intended. If the public as a whole has a poorly formed conscience or moral sense, this will be reflected in the laws that are accepted.
Expanded Role of the State. One of the "four pillars" of a just society in terms of the natural law is a limited economic role for the State. The more a society subordinates anything that is true in order to reach a political goal, the more unjust a society becomes, and the more the coercive power of the State is employed in an effort to maintain the status quo. Paradoxically, the more the State interferes to maintain the status quo or impose a false or superficial solidarity, the more quickly the social order degenerates as a result of violating the fundamental principles of subsidiarity and solidarity. Looking to the State to pass a law in order to impose a desired result is often self-defeating. Even when successful the effort undermines essential human dignity and violates the sovereignty of the human person by unnecessarily or unjustly restricting human liberty.
Rejection of Free Markets. A free market is essential to maintaining individual human sovereignty and thus securing and protecting human dignity through the exercise of liberty and private property, that is, freedom of association and contract involving the free exchange of marketable goods and services. By "free market," however, we do not mean a market in which "anything goes," but a market that all are free to enter and participate in as consumers and producers, and where the rules are clear, understandable, and enforced without prejudice. Misunderstanding this principle or interpreting it as promoting a "law of the jungle" environment sets the stage for what is effectively anarchy and "might makes right," or fascism in a misguided effort to bring order out of chaos.
Misunderstanding of Private Property. Understanding private property is crucial to recognizing and protecting essential human dignity and the sovereignty of the human person. Many people confuse "property" — ownership — with what is owned. On the contrary, property is, one, the natural right that every human being has to be an owner, and, two, the socially determined bundle of rights that define how an owner may use what he or she possesses, and (depending on the needs of the common good) what and how much can be possessed, as long as limitations do not unjustly or unnecessarily infringe on the underlying natural right to be an owner. Distortions of property that assert absolute exercise, or that the right to be an owner is not inherent (absolute) in the human person equally undermine private property as the chief support for the natural rights of life and liberty.
Alleged Economic Necessity. One of the strongest motivators for accepting even an unjust law is the need to make a living. In this respect, it is noteworthy that David Christy, author of Cotton is King (1855), one of the most persuasive defenses of chattel slavery in the American south before the Civil War, was a former abolitionist. While Christy continued to abhor slavery as an institution, he defended it on the grounds of economic necessity. Christy contended that the economic survival of the United States and the British Empire depended absolutely on the continuance of slavery in order to secure adequate supplies of American agricultural products, especially cotton, to support the industrial revolution. The modern wage system and concentrated ownership of capital, whether in private hands (capitalism) or the State (socialism) are justified on similar grounds, predominantly the need to secure adequate financing for new capital formation out of past savings.
All of these reasons — and more — demonstrate the degree to which the idea of the natural law has decayed in our society. Each one represents a more or less successful effort to undermine the natural law by subverting a common sense understanding of one or more natural rights, especially life, liberty, property, and the acquisition and development of virtue (pursuit of happiness), and making something other than truth the justification for changing the law or the social order.
The acquisition and development of virtue, especially, and somewhat paradoxically, is critical. It is a natural right itself to develop more fully as a person by acquiring and developing virtue — "pursuing happiness." The exercise of the right to acquire and develop virtue, however, necessarily implies the right to exercise the other natural rights, especially life, liberty and property. This is because exercising rights is the means by which human beings acquire and develop virtue. Thus, unless the right to develop more fully as a person is recognized and protected as the reason for even having rights at all, the probability is high that the exercise or even existence of life, liberty and property will either be denied or distorted.
#30#
Monday, January 2, 2012
Raw Judicial Power I: The Assault of Legal Positivism
In 1953 a constitutional scholar named William Winslow Crosskey (1894-1968) who taught at the University of Chicago published a remarkable book with the title, Politics and the Constitution in the History of the United States. (Chicago, Illinois: University of Chicago Press, 1953.) Ordinarily a book on such a subject wouldn't excite too much interest outside the legal community — or inside it, for that matter. The difference was that Crosskey took a "slightly" different view of the U.S. Constitution than that to which lawyers and judges have become accustomed over the past century and a half or so. In contrast to the orientation of much legal thought today, Crosskey went directly contrary to the prevailing concept of "legal positivism."
This requires a little explanation. The traditional western idea of law, as expressed by philosophers such as Mortimer Adler and jurists such as Heinrich Rommen, is that law is based on concepts of right and wrong that are inherent in human beings. This is called "the natural law." The natural law is based on reason and what is discernible about human nature through observation. In this context, what is legal and what is moral are inextricably linked. Natural law philosophers and jurists tie the legitimacy of manmade law to how closely it conforms to human nature. Since conformity with nature is to pursue the good, or "virtue," as Aristotle called it, law must be moral, or it is not valid law.
In contrast, legal positivism is a philosophy of law claiming that, far from being a reflection of transcendent absolute standards valid for every human being, law is only a set of manmade rules that can change as circumstances, needs, or desires change, and are valid only so long as people accept them. There is thus no inherent or necessary connection of human positive law with morality — an essential aspect that all Aristotelian philosophers insist exist for a law to be legitimate; human law cannot go contrary to nature and be considered legitimate, regardless how popular the law or how necessary it seems.
Legal positivism is the basis for the idea of the U.S. Constitution as a "living" document, so that the meanings of the words change as our understanding of the document evolves. There are two justifications for this view. One justification is called the "pragmatic" view. This is that we cannot let presumably outdated or outmoded ideas of the past (such as the concept of inalienable rights of life, liberty and property) bind us and prevent us from setting policies to achieve today's political or economic goals. The other is that the framers of the Constitution were deliberately vague so as to allow broad interpretations to meet modern needs.
Crosskey disagreed with both of these ideas. Consequently, Crosskey's contention that the U.S. Constitution is based on the natural law, and embodies certain absolute principles — as well as a degree of specificity unappreciated by many — was met with what can only be described as outrage. One otherwise liberal lawyer so far forgot his principles as to declare, "Today I join the ranks of the book-burners."
We can therefore understand how legal positivists and liberals would reject Crosskey's work. What is puzzling, however, is that the Pro-Life movement, ostensibly dedicated to preservation of our natural right to life, seems to have rejected it as well.
We don't know if Crosskey was Pro-Life, Pro-Choice, or anything else. We do believe, however, that he would have thought that the understanding of the 14th Amendment embodied in Roe v. Wade was grossly in error. Not coincidentally, Roe v. Wade was based on two cases that Crosskey considered the worst decisions ever made by the Supreme Court of the United States. These were Scott v. Sandford (the Dred Scott Case) in 1857, and the Slaughterhouse Cases in 1873.
Obviously Crosskey, who died in 1968, did not include Roe v. Wade in his book. From his analysis of the Dred Scott case, the 14th Amendment, and the Slaughterhouse Cases, however, we think we have a good idea of what his opinion of the decision would have been — whether or not he believed abortion to be a right.
That is what we hope to cover in this brief blog series, and show how the legal philosophy that led to Roe v. Wade was substantially the same that led to Scott v. Sandford and the Slaughterhouse Cases, and that the three cases combined constitute what amounts to a full frontal attack on the fundamental triad of natural rights that define and protect essential human dignity: life, liberty and property.
#30#
This requires a little explanation. The traditional western idea of law, as expressed by philosophers such as Mortimer Adler and jurists such as Heinrich Rommen, is that law is based on concepts of right and wrong that are inherent in human beings. This is called "the natural law." The natural law is based on reason and what is discernible about human nature through observation. In this context, what is legal and what is moral are inextricably linked. Natural law philosophers and jurists tie the legitimacy of manmade law to how closely it conforms to human nature. Since conformity with nature is to pursue the good, or "virtue," as Aristotle called it, law must be moral, or it is not valid law.
In contrast, legal positivism is a philosophy of law claiming that, far from being a reflection of transcendent absolute standards valid for every human being, law is only a set of manmade rules that can change as circumstances, needs, or desires change, and are valid only so long as people accept them. There is thus no inherent or necessary connection of human positive law with morality — an essential aspect that all Aristotelian philosophers insist exist for a law to be legitimate; human law cannot go contrary to nature and be considered legitimate, regardless how popular the law or how necessary it seems.
Legal positivism is the basis for the idea of the U.S. Constitution as a "living" document, so that the meanings of the words change as our understanding of the document evolves. There are two justifications for this view. One justification is called the "pragmatic" view. This is that we cannot let presumably outdated or outmoded ideas of the past (such as the concept of inalienable rights of life, liberty and property) bind us and prevent us from setting policies to achieve today's political or economic goals. The other is that the framers of the Constitution were deliberately vague so as to allow broad interpretations to meet modern needs.
Crosskey disagreed with both of these ideas. Consequently, Crosskey's contention that the U.S. Constitution is based on the natural law, and embodies certain absolute principles — as well as a degree of specificity unappreciated by many — was met with what can only be described as outrage. One otherwise liberal lawyer so far forgot his principles as to declare, "Today I join the ranks of the book-burners."
We can therefore understand how legal positivists and liberals would reject Crosskey's work. What is puzzling, however, is that the Pro-Life movement, ostensibly dedicated to preservation of our natural right to life, seems to have rejected it as well.
We don't know if Crosskey was Pro-Life, Pro-Choice, or anything else. We do believe, however, that he would have thought that the understanding of the 14th Amendment embodied in Roe v. Wade was grossly in error. Not coincidentally, Roe v. Wade was based on two cases that Crosskey considered the worst decisions ever made by the Supreme Court of the United States. These were Scott v. Sandford (the Dred Scott Case) in 1857, and the Slaughterhouse Cases in 1873.
Obviously Crosskey, who died in 1968, did not include Roe v. Wade in his book. From his analysis of the Dred Scott case, the 14th Amendment, and the Slaughterhouse Cases, however, we think we have a good idea of what his opinion of the decision would have been — whether or not he believed abortion to be a right.
That is what we hope to cover in this brief blog series, and show how the legal philosophy that led to Roe v. Wade was substantially the same that led to Scott v. Sandford and the Slaughterhouse Cases, and that the three cases combined constitute what amounts to a full frontal attack on the fundamental triad of natural rights that define and protect essential human dignity: life, liberty and property.
#30#
Friday, December 30, 2011
News from the Network, Vol. 4, No. 52
Things are shaping up well to make 2012 the Year of Capital Homesteading. A number of initiatives to reach prime movers have moved forward exceptionally well, and there has been an increasing level of media outreach. Mostly this has been on radio, with Norman Kurland getting several interviews on nearly a dozen different radio shows across the country, including Build Your Wealth, The Challenge, The Meshorn Daniels Show, and Tuesdays With Tormala, and even Michael Greaney appeared on Russell Williams's The Challenge out of Hartford, Connecticut and The Skip Mahaffey Show out of Tampa Bay, Florida.
As for other initiatives:
• Work is progressing on the web-based "Capital Homesteading Education and Marketing Campaign." Cartoonist Bert Dodson is working on how to present some rather esoteric ideas in picture form, while Dave Kelly is working on developing some scripts on the subjects, "Where's the Money Going to Come from?" and "The Joe Lunchbucket Story."
• Michael Cong has completed his work in Hawaii with the Japan-America Institute of Management Science in Honolulu. He received a high grade on his work, and reported that the professor sounded very interested in the Just Third Way. Michael is now ready to begin work on revising the Chinese translation of Curing World Poverty. We have completed our first run-through of the revision of the English language version, and expect to complete the next phase before the end of January.
• Monica W. has been wending her way through the non-profit and political bureaucratic labyrinth in Cleveland. She reported that she has been referred to Neighborhood Housing Services and the Thriving Community Institute. The issue was raised whether progress might pick up after the New Year when people are more prepared to focus on new ideas and solutions to old problems.
• CESJ obtained a DVD of some talks by Mortimer J. Adler and Charles Van Doren on "How to Read a Book." The DVD is available on the website of the Center for the Study of the Great Ideas, and is available for a $24.95 donation plus $5.00 shipping anywhere in the world. It is well worth the money, and will leave you nodding your head in agreement — and shaking your head at the condition of today's educational system. You might even pick up a few pointers on how to read a book.
• Russell Williams has been moving forward with arranging for a Summit on Economic Justice to take place in Waterbury, Connecticut, in the middle of January.
• We have received some endorsements for A Plea for Peasant Proprietors by William Thomas Thornton. Consider sending us your own endorsement, posting a review on Amazon or Barnes and Noble, or both.
• Bestselling author William Greider had a conversation this past week with Norman Kurland. They discussed the importance of dealing with the money and credit issue in light of the current global situation. Greider asked about the Just Third Way take on chartalism, or "Modern Monetary Theory."
• As of this morning, we have had visitors from 59 different countries and 50 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Australia. People in Trinidad and Tobago, Russia, Germany, Australia, and Poland spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Orestes Brownson and Socialism, I: The Evil," "Aristotle on Private Property," and "Orestes Brownson and Socialism, II: The Civil War."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
As for other initiatives:
• Work is progressing on the web-based "Capital Homesteading Education and Marketing Campaign." Cartoonist Bert Dodson is working on how to present some rather esoteric ideas in picture form, while Dave Kelly is working on developing some scripts on the subjects, "Where's the Money Going to Come from?" and "The Joe Lunchbucket Story."
• Michael Cong has completed his work in Hawaii with the Japan-America Institute of Management Science in Honolulu. He received a high grade on his work, and reported that the professor sounded very interested in the Just Third Way. Michael is now ready to begin work on revising the Chinese translation of Curing World Poverty. We have completed our first run-through of the revision of the English language version, and expect to complete the next phase before the end of January.
• Monica W. has been wending her way through the non-profit and political bureaucratic labyrinth in Cleveland. She reported that she has been referred to Neighborhood Housing Services and the Thriving Community Institute. The issue was raised whether progress might pick up after the New Year when people are more prepared to focus on new ideas and solutions to old problems.
• CESJ obtained a DVD of some talks by Mortimer J. Adler and Charles Van Doren on "How to Read a Book." The DVD is available on the website of the Center for the Study of the Great Ideas, and is available for a $24.95 donation plus $5.00 shipping anywhere in the world. It is well worth the money, and will leave you nodding your head in agreement — and shaking your head at the condition of today's educational system. You might even pick up a few pointers on how to read a book.
• Russell Williams has been moving forward with arranging for a Summit on Economic Justice to take place in Waterbury, Connecticut, in the middle of January.
• We have received some endorsements for A Plea for Peasant Proprietors by William Thomas Thornton. Consider sending us your own endorsement, posting a review on Amazon or Barnes and Noble, or both.
• Bestselling author William Greider had a conversation this past week with Norman Kurland. They discussed the importance of dealing with the money and credit issue in light of the current global situation. Greider asked about the Just Third Way take on chartalism, or "Modern Monetary Theory."
• As of this morning, we have had visitors from 59 different countries and 50 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Australia. People in Trinidad and Tobago, Russia, Germany, Australia, and Poland spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Orestes Brownson and Socialism, I: The Evil," "Aristotle on Private Property," and "Orestes Brownson and Socialism, II: The Civil War."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
Thursday, December 29, 2011
A Short Dissertation on Thomas Hobbes
Some time ago we posted a discussion on Thomas Hobbes's views on private property, relating it through Walter Bagehot to the economics of John Maynard Keynes. Somewhat to our surprise, the posting has, week after week, continued to be among the "top five" postings. Many visitors who read the posting on "Thomas Hobbes and Private Property" are, interestingly enough, from the former communist countries in eastern and central Europe.
Keeping that in mind, we thought we would take a look at what Mortimer Adler — the "Adler" of "Kelso and Adler" — thought about Hobbes, and if his assessment of the great defender of the divine right of kings matched ours. To begin, let's refresh our memories about what Hobbes said in Leviathan (1651) concerning what John Locke considered the cornerstone of a free society: private property. (Please excuse the archaic spelling, but we wanted to give you Hobbes's own words in Hobbes's own words.)
"Propriety Of A Subject Excludes Not The Dominion Of The Soveraign, But Onely Of Another Subject
"From whence we may collect, that the Propriety which a subject hath in his lands, consisteth in a right to exclude all other subjects from the use of them; and not to exclude their Soveraign, be it an Assembly, or a Monarch." (Leviathan, XXIV.)
"Attributing Of Absolute Propriety To The Subjects (XXIX)
"A Fifth doctrine, that tendeth to the Dissolution of a Common-wealth, is, "That every private man has an absolute Propriety in his Goods, such, as excludeth the Right of the Soveraign." Every man has indeed a Propriety that excludes the Right of every other Subject: And he has it onely from the Soveraign Power; without the protection whereof, every other man should have equall Right to the same. But if the Right of the Soveraign also be excluded, he cannot performe the office they have put him into; which is, to defend them both from forraign enemies, and from the injuries of one another; and consequently there is no longer a Common-wealth." (Leviathan, XXIX.)
Given this, what does Adler have to say? We took the following passage from the "Cooperative Individualism" website, from the article titled, "The Nature of Natural Law" by Mortimer Adler:
"You ask whether natural law is relevant to modern conditions. My answer is that if justice is still relevant, then natural law is. Indeed, interest in natural law has increased especially during the past half century, with its experience of the kind of positive laws which have been imposed by totalitarian regimes. On what grounds could a decent German citizen in Nazi times justify his opposition to the laws of the land? On private sentiments or merely personal opinion? Even purely inner resistance to iniquity must be rooted in firmer grounds. 'A law which is not just is a law in name only,' says Augustine. And Aquinas adds: 'Every human law has just so much of the nature of law as it is derived from the law of nature. But if in any point it departs from the law of nature, it is no longer a law but a perversion of the law.'
"The naturalists, as that name indicates, affirm the existence of natural justice, of natural and unalienable rights, of the natural moral law, and of valid prescriptive oughts that elicit our assent, both independently of and prior to the existence of positive law. The positivists deny all this and affirm the opposite. For them, the positive law - the man-made law of the state - provides the only prescriptive oughts that human beings are compelled to obey. According to them, nothing is just or unjust until it has been declared so by a command or prohibition of positive law. . . .
"The positivist view is recurrent in later centuries with the recurrence of later despotisms. It was expressed by the Roman jurisconsult, Ulpian, who, defending the absolutism of the Caesars, declared that whatever pleases the prince has the force of law. Still later, in the sixteenth century, the same view was set forth by another defender of absolute government, Thomas Hobbes, in 'The Leviathan'; and later, in the nineteenth century, by John Austin, in his 'Analytical Jurisprudence.'
"Neither Austin nor the twentieth-century legal positivists who follow him regard themselves as defenders of absolute government or despotism. That is what they are, however - perhaps not as explicitly as their predecessors, but by implication at least. The denial of natural rights, the natural moral law, and natural justice leads not only to the positivist conclusion that man made law alone determines what is just and unjust. It also leads to a corollary which inexorably attaches itself to that conclusion - 'that might makes right' - this is the very essence of absolute or despotic government."
#30#
Keeping that in mind, we thought we would take a look at what Mortimer Adler — the "Adler" of "Kelso and Adler" — thought about Hobbes, and if his assessment of the great defender of the divine right of kings matched ours. To begin, let's refresh our memories about what Hobbes said in Leviathan (1651) concerning what John Locke considered the cornerstone of a free society: private property. (Please excuse the archaic spelling, but we wanted to give you Hobbes's own words in Hobbes's own words.)
"Propriety Of A Subject Excludes Not The Dominion Of The Soveraign, But Onely Of Another Subject
"From whence we may collect, that the Propriety which a subject hath in his lands, consisteth in a right to exclude all other subjects from the use of them; and not to exclude their Soveraign, be it an Assembly, or a Monarch." (Leviathan, XXIV.)
"Attributing Of Absolute Propriety To The Subjects (XXIX)
"A Fifth doctrine, that tendeth to the Dissolution of a Common-wealth, is, "That every private man has an absolute Propriety in his Goods, such, as excludeth the Right of the Soveraign." Every man has indeed a Propriety that excludes the Right of every other Subject: And he has it onely from the Soveraign Power; without the protection whereof, every other man should have equall Right to the same. But if the Right of the Soveraign also be excluded, he cannot performe the office they have put him into; which is, to defend them both from forraign enemies, and from the injuries of one another; and consequently there is no longer a Common-wealth." (Leviathan, XXIX.)
Given this, what does Adler have to say? We took the following passage from the "Cooperative Individualism" website, from the article titled, "The Nature of Natural Law" by Mortimer Adler:
"You ask whether natural law is relevant to modern conditions. My answer is that if justice is still relevant, then natural law is. Indeed, interest in natural law has increased especially during the past half century, with its experience of the kind of positive laws which have been imposed by totalitarian regimes. On what grounds could a decent German citizen in Nazi times justify his opposition to the laws of the land? On private sentiments or merely personal opinion? Even purely inner resistance to iniquity must be rooted in firmer grounds. 'A law which is not just is a law in name only,' says Augustine. And Aquinas adds: 'Every human law has just so much of the nature of law as it is derived from the law of nature. But if in any point it departs from the law of nature, it is no longer a law but a perversion of the law.'
"The naturalists, as that name indicates, affirm the existence of natural justice, of natural and unalienable rights, of the natural moral law, and of valid prescriptive oughts that elicit our assent, both independently of and prior to the existence of positive law. The positivists deny all this and affirm the opposite. For them, the positive law - the man-made law of the state - provides the only prescriptive oughts that human beings are compelled to obey. According to them, nothing is just or unjust until it has been declared so by a command or prohibition of positive law. . . .
"The positivist view is recurrent in later centuries with the recurrence of later despotisms. It was expressed by the Roman jurisconsult, Ulpian, who, defending the absolutism of the Caesars, declared that whatever pleases the prince has the force of law. Still later, in the sixteenth century, the same view was set forth by another defender of absolute government, Thomas Hobbes, in 'The Leviathan'; and later, in the nineteenth century, by John Austin, in his 'Analytical Jurisprudence.'
"Neither Austin nor the twentieth-century legal positivists who follow him regard themselves as defenders of absolute government or despotism. That is what they are, however - perhaps not as explicitly as their predecessors, but by implication at least. The denial of natural rights, the natural moral law, and natural justice leads not only to the positivist conclusion that man made law alone determines what is just and unjust. It also leads to a corollary which inexorably attaches itself to that conclusion - 'that might makes right' - this is the very essence of absolute or despotic government."
#30#
Wednesday, December 28, 2011
Ron Paul and Creating Money
The other day the Washington Post (which has been running a series of articles on potential contenders to President Obama) did a piece on Ron Paul. Paul has made quite a name for himself by advocating various measures designed to "End the Fed" and turn the power over monetary policy back to Congress. As Paul has declared, "The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank." ("End the Fed," by Ron Paul)
Well . . . not according to Alexander Hamilton ("Opinion as to the Constitutionality of the Bank of the United States," 1791) and Justice John Marshall (McCulloch v. Maryland, 1819). According to the first Secretary of the Treasury and the fourth (and longest-serving) Chief Justice of the United States Supreme Court, Congress had and has every right to establish a private corporation and delegate public business to that corporation, particularly with respect to money and credit.
Whether Congress should do that, or whether the power has been misused or corrupted is a different question. What is beyond the shadow of a doubt is that the Federal Reserve is a fully legal and duly authorized private corporation that is charged with carrying out the functions of any other central bank. Even though we contend that the powers of the Federal Reserve have been misused and diverted to serve dubious political ends, the central bank of the United States fills a necessary role in the economy and the financial system. As it functions today, the Federal Reserve is subjected to a bad use of a very good thing.
The United States has, in fact, had some institution that filled the central banking role for most of its history. The longest period without a central bank was from 1837 to 1862, inclusive, following Andrew Jackson's "war" against the Second Bank of the United States and the passage of the National Bank Act of 1863. The National Bank system was badly designed and functioned mostly to make the rich richer while draining the country of liquidity available to farmers and small businesses. Had it not been for the Homestead Act, the United States would probably not have even the token small ownership it has today.
What we want to look at today, however, is not Ron Paul's shaky historical facts, but his dubious understanding of money and credit. Evidently as part of his campaign to undermine the Federal Reserve (as if others hadn't already beaten him to the punch), he wants to give the Federal Reserve some competition, and give private individuals the right to coin money. He has sponsored a bill to that effect, H.R. 1098, "The Free Competition in Currency Act of 2011."
From 1787 to 1863 many people believed that it was legal for U.S. citizens to strike their own coinage. Individual state governments could not issue coins, but private individuals and companies seemed to be okay. The federal government seems to have concurred — at least, there were some federal investigations of the Bechtlers, a family that owned a private mint and struck gold coins to the U.S. standard, and the business was not shut down. The Confederate States of America made the Bechtler's coinage legal tender. Moffat and Company became the San Francisco Assay Office, which later evolved into the San Francisco Mint, and Moffat's coins seem to have had a quasi-legal tender status, being accepted in payment of customs duties.
What Ron Paul evidently doesn't understand is that Federal Reserve notes and demand deposits are not the entire money supply. They are actually the smaller part of it. The bulk of the money supply is comprised of bills of exchange issued by private individuals and companies. As late as 2008, a crude calculation puts the amount of the money supply represented by bills of exchange at more than 60%.
The vast majority of these bills fall into the category of "real bills," that is, they are backed by the general creditworthiness of the drawer. They are money once they have been accepted. Every individual or business that has purchased anything on credit has "drawn a bill," and — given that it was accepted — has thereby created money. American commerce, industry and agriculture could not possibly function if people couldn't create money in this fashion. The productive economy — or what's left of it — runs largely on bills of exchange. Most new capital is financed using some form of a bill of exchange, and repaid out of the future profits of the capital itself. Credit used to purchase capital that pays for itself is a good use of a good thing.
And, yes, you too create money every time you purchase something on credit. The problem is that, while consumer bills of exchange, most often drawn by using a credit card, are real bills (obtaining credit that you know you can't repay is a crime) consumer bills are a bad use of a very good thing.
The trick is not to give citizens the right to do what they are already doing, and to their own detriment. If Ron Paul wants to help America and put the economy and the financial system back on a solid footing, he should sponsor legislation that would help citizens create money to purchase capital that pays for itself, not consumer goods.
Such a proposal is the Capital Homestead Act. It contains a number of provisions that Ron Paul should find very attractive — such as no more monetizing of government debt by the Federal Reserve. Instead, return the Federal Reserve to its original purpose of providing credit to the private sector by discounting eligible industrial, commercial and agricultural paper.
And one more thing: give each citizen the right to participate in the ownership of all new capital financed in this way. Permit each and every child, woman, and man to create money to finance new capital formation. This would end the debt-backed currency we now have, and replace it with an asset-backed currency.
#30#
Well . . . not according to Alexander Hamilton ("Opinion as to the Constitutionality of the Bank of the United States," 1791) and Justice John Marshall (McCulloch v. Maryland, 1819). According to the first Secretary of the Treasury and the fourth (and longest-serving) Chief Justice of the United States Supreme Court, Congress had and has every right to establish a private corporation and delegate public business to that corporation, particularly with respect to money and credit.
Whether Congress should do that, or whether the power has been misused or corrupted is a different question. What is beyond the shadow of a doubt is that the Federal Reserve is a fully legal and duly authorized private corporation that is charged with carrying out the functions of any other central bank. Even though we contend that the powers of the Federal Reserve have been misused and diverted to serve dubious political ends, the central bank of the United States fills a necessary role in the economy and the financial system. As it functions today, the Federal Reserve is subjected to a bad use of a very good thing.
The United States has, in fact, had some institution that filled the central banking role for most of its history. The longest period without a central bank was from 1837 to 1862, inclusive, following Andrew Jackson's "war" against the Second Bank of the United States and the passage of the National Bank Act of 1863. The National Bank system was badly designed and functioned mostly to make the rich richer while draining the country of liquidity available to farmers and small businesses. Had it not been for the Homestead Act, the United States would probably not have even the token small ownership it has today.
What we want to look at today, however, is not Ron Paul's shaky historical facts, but his dubious understanding of money and credit. Evidently as part of his campaign to undermine the Federal Reserve (as if others hadn't already beaten him to the punch), he wants to give the Federal Reserve some competition, and give private individuals the right to coin money. He has sponsored a bill to that effect, H.R. 1098, "The Free Competition in Currency Act of 2011."
From 1787 to 1863 many people believed that it was legal for U.S. citizens to strike their own coinage. Individual state governments could not issue coins, but private individuals and companies seemed to be okay. The federal government seems to have concurred — at least, there were some federal investigations of the Bechtlers, a family that owned a private mint and struck gold coins to the U.S. standard, and the business was not shut down. The Confederate States of America made the Bechtler's coinage legal tender. Moffat and Company became the San Francisco Assay Office, which later evolved into the San Francisco Mint, and Moffat's coins seem to have had a quasi-legal tender status, being accepted in payment of customs duties.
What Ron Paul evidently doesn't understand is that Federal Reserve notes and demand deposits are not the entire money supply. They are actually the smaller part of it. The bulk of the money supply is comprised of bills of exchange issued by private individuals and companies. As late as 2008, a crude calculation puts the amount of the money supply represented by bills of exchange at more than 60%.
The vast majority of these bills fall into the category of "real bills," that is, they are backed by the general creditworthiness of the drawer. They are money once they have been accepted. Every individual or business that has purchased anything on credit has "drawn a bill," and — given that it was accepted — has thereby created money. American commerce, industry and agriculture could not possibly function if people couldn't create money in this fashion. The productive economy — or what's left of it — runs largely on bills of exchange. Most new capital is financed using some form of a bill of exchange, and repaid out of the future profits of the capital itself. Credit used to purchase capital that pays for itself is a good use of a good thing.
And, yes, you too create money every time you purchase something on credit. The problem is that, while consumer bills of exchange, most often drawn by using a credit card, are real bills (obtaining credit that you know you can't repay is a crime) consumer bills are a bad use of a very good thing.
The trick is not to give citizens the right to do what they are already doing, and to their own detriment. If Ron Paul wants to help America and put the economy and the financial system back on a solid footing, he should sponsor legislation that would help citizens create money to purchase capital that pays for itself, not consumer goods.
Such a proposal is the Capital Homestead Act. It contains a number of provisions that Ron Paul should find very attractive — such as no more monetizing of government debt by the Federal Reserve. Instead, return the Federal Reserve to its original purpose of providing credit to the private sector by discounting eligible industrial, commercial and agricultural paper.
And one more thing: give each citizen the right to participate in the ownership of all new capital financed in this way. Permit each and every child, woman, and man to create money to finance new capital formation. This would end the debt-backed currency we now have, and replace it with an asset-backed currency.
#30#
Tuesday, December 27, 2011
A Taxing Problem, V: "I'll Have My Bond!"
As you might recall from yesterday's posting, our critic proposed a tax system that, at first glance, appears to be more straightforward than the Capital Homesteading reforms: "I was thinking of two federal taxes, one a national sales tax to be used just to pay off the national debt, and the other a flat income tax with few or no exemptions or deductions but NO tax on interest income from savings or income from retirement investments, whether private (since it was already taxed) or a Social Security check." The critic expressed the concern "that if by law some citizens are excluded from paying any tax at all, what direct interest do they have in a prudent use of the taxes collected? None."
Isn't it easy to answer your own question, giving the person you are chastising no opportunity to respond (usually by running away before he . . . okay, I can answer)? Unfortunately for the critic, this chastisee has a blog, and, with nearly thirty years' experience as a CPA and a specialist in the administration of qualified retirement plans, happens to know a little something about both tax theory and practice, as well as the treatment of retirement contributions and income for tax purposes.
For an explanation of how citizens who pay no taxes would have an interest in good government, we need look no further than William Cobbett in his History of the Protestant Reformation in England and Ireland (1827). Cobbett was commenting on the fact that the "Catholic forebears" of the then-modern English had not, as a usual thing, paid taxes, the costs of government being met out of revenues of public lands:
"You may twist the word freedom as long as you please, but at last it comes to quiet enjoyment of your own property, or it comes to nothing. Why do men want any of those things that are called political rights and privileges? Why do they, for instance, want to vote at elections for members of parliament? Oh! because they shall then have an influence over the conduct of those members. And of what use is that? Oh! then they will prevent the members from doing wrong. What wrong? Why, imposing taxes that ought not to be paid. That is all; that is the use, and the only use, of any right or privilege that men in general can have." A History of the Protestant Reformation in England and Ireland, 1827, §456.
Thus, the citizens, through the desire not to pay taxes, will keep a close watch on their elected representatives and the level of expenditure. In any event, Capital Homesteading is intended to put every citizen in the position of being able to have sufficient income to be able to pay taxes, not maintain the current system that taxes in order to control, and gives back as charity what was taken unjustly — and thus unnecessarily — maintaining people in a permanent condition of dependency, as Alexis de Tocqueville pointed out in his Memoir on Pauperism.
Yes, every citizen is responsible for contributing to the cost of government, just as every member of a family is obliged to contribute to the family, and a member of a religion to the support of that religion — but only to the extent that he or she is not thereby deprived of what he or she needs to live on, i.e., what is required to meet common domestic needs adequately (Quadragesimo Anno, § 71 — the reference is to wages, but as Leo XIII pointed out, property income — all income from productive activity, in fact — is simply "wages" under another form, Rerum Novarum, § 5). Otherwise we find ourselves in the ludicrous position of taking money away from people in order to give it back, thereby substituting a false charity for true justice.
Our critic made a couple of factual errors as well. For one, the critic asserted that interest income on savings is somehow taxed twice. On the contrary, interest a company or bank pays on its obligations or savings accounts is deductible as a legitimate business expense; it is not an after-tax distribution, and thus is not an instance of "double taxation" under the current system. We would shift corporate finance to non-interest bearing bills of exchange based on the general creditworthiness of the drawer, limiting interest to charges on accumulations of existing savings lent out. The charges on bills would be limited to the discount or rediscount (a reflection of the bill's present value), and the risk premium, which would be shifted to purchase capital credit insurance and reinsurance in lieu of traditional collateral.
For another, the critic claimed that income from private retirement investments "was already taxed." Really? The critic has evidently never heard of the IRA (that's "Individual Retirement Account" for our readers outside the U.S.) and other qualified retirement plans, both defined benefit and defined contribution, the contributions to which are (within limits) funded with pre-tax, not after-tax dollars. This lack of knowledge is, frankly, inexcusable, either for someone proposing sweeping tax reform or who is in the legislature. In addition to a basic unfamiliarity with the principles of taxation (efficiency, understandability, equity, and benefit), the critic clearly has no idea what the U.S. tax code says about retirement income, or why the present Social Security system is almost universally misunderstood.
To avoid the double tax on corporate profits and to encourage full dividend payout (thereby increasing personal taxable income), we would make all dividends tax deductible at the corporate level, but fully taxable at the individual level above the exemption. With all financing for new capital formation coming out of non-interest bearing "pure credit" loans, the necessity for accumulating money savings — and restricting consumption — to finance new capital investment (and, yes, "create jobs") would be obviated.
While all current promises must be met, in the future we would make Social Security and other entitlements need-based after meeting those promises, with the bulk of retirement income coming from assets in a tax-deferred Capital Homestead Account, financed by discounting bills of exchange at commercial banks, and rediscounting at the Federal Reserve. As such, Social Security or other welfare would not be taxed, as "need" would be defined as someone having an income less than the exemption.
A national sales tax, like all ad valorem taxes, is both strongly regressive, and therefore unjust, falling most heavily on those least able to pay, and adds the "double whammy" in that it is a dollar-for-dollar reduction in the very consumption that justifies new capital formation and thus job creation. An income tax inhibits new investment by reducing the incentive to invest by taking a percentage of profits, but ad valorem taxes take away the very reason to invest in the first place by diverting 100% of each dollar spent on the tax away from consumption. If you're trying to rebuild your economy, ad valorem taxes are a really, really bad idea.
As Harold Moulton explained in The Formation of Capital (1935), the demand for new capital is derived from consumer demand. Anything, therefore (such as the Keynesian insistence that new capital can only be financed out of reductions in consumption), that decreases consumption negates the very capital investment it finances. This is the "economic dilemma," unavoidable under Keynesian assumptions, yet non-existent under the Just Third Way reforms embodied in Capital Homesteading.
#30#
Isn't it easy to answer your own question, giving the person you are chastising no opportunity to respond (usually by running away before he . . . okay, I can answer)? Unfortunately for the critic, this chastisee has a blog, and, with nearly thirty years' experience as a CPA and a specialist in the administration of qualified retirement plans, happens to know a little something about both tax theory and practice, as well as the treatment of retirement contributions and income for tax purposes.
For an explanation of how citizens who pay no taxes would have an interest in good government, we need look no further than William Cobbett in his History of the Protestant Reformation in England and Ireland (1827). Cobbett was commenting on the fact that the "Catholic forebears" of the then-modern English had not, as a usual thing, paid taxes, the costs of government being met out of revenues of public lands:
"You may twist the word freedom as long as you please, but at last it comes to quiet enjoyment of your own property, or it comes to nothing. Why do men want any of those things that are called political rights and privileges? Why do they, for instance, want to vote at elections for members of parliament? Oh! because they shall then have an influence over the conduct of those members. And of what use is that? Oh! then they will prevent the members from doing wrong. What wrong? Why, imposing taxes that ought not to be paid. That is all; that is the use, and the only use, of any right or privilege that men in general can have." A History of the Protestant Reformation in England and Ireland, 1827, §456.
Thus, the citizens, through the desire not to pay taxes, will keep a close watch on their elected representatives and the level of expenditure. In any event, Capital Homesteading is intended to put every citizen in the position of being able to have sufficient income to be able to pay taxes, not maintain the current system that taxes in order to control, and gives back as charity what was taken unjustly — and thus unnecessarily — maintaining people in a permanent condition of dependency, as Alexis de Tocqueville pointed out in his Memoir on Pauperism.
Yes, every citizen is responsible for contributing to the cost of government, just as every member of a family is obliged to contribute to the family, and a member of a religion to the support of that religion — but only to the extent that he or she is not thereby deprived of what he or she needs to live on, i.e., what is required to meet common domestic needs adequately (Quadragesimo Anno, § 71 — the reference is to wages, but as Leo XIII pointed out, property income — all income from productive activity, in fact — is simply "wages" under another form, Rerum Novarum, § 5). Otherwise we find ourselves in the ludicrous position of taking money away from people in order to give it back, thereby substituting a false charity for true justice.
Our critic made a couple of factual errors as well. For one, the critic asserted that interest income on savings is somehow taxed twice. On the contrary, interest a company or bank pays on its obligations or savings accounts is deductible as a legitimate business expense; it is not an after-tax distribution, and thus is not an instance of "double taxation" under the current system. We would shift corporate finance to non-interest bearing bills of exchange based on the general creditworthiness of the drawer, limiting interest to charges on accumulations of existing savings lent out. The charges on bills would be limited to the discount or rediscount (a reflection of the bill's present value), and the risk premium, which would be shifted to purchase capital credit insurance and reinsurance in lieu of traditional collateral.
For another, the critic claimed that income from private retirement investments "was already taxed." Really? The critic has evidently never heard of the IRA (that's "Individual Retirement Account" for our readers outside the U.S.) and other qualified retirement plans, both defined benefit and defined contribution, the contributions to which are (within limits) funded with pre-tax, not after-tax dollars. This lack of knowledge is, frankly, inexcusable, either for someone proposing sweeping tax reform or who is in the legislature. In addition to a basic unfamiliarity with the principles of taxation (efficiency, understandability, equity, and benefit), the critic clearly has no idea what the U.S. tax code says about retirement income, or why the present Social Security system is almost universally misunderstood.
To avoid the double tax on corporate profits and to encourage full dividend payout (thereby increasing personal taxable income), we would make all dividends tax deductible at the corporate level, but fully taxable at the individual level above the exemption. With all financing for new capital formation coming out of non-interest bearing "pure credit" loans, the necessity for accumulating money savings — and restricting consumption — to finance new capital investment (and, yes, "create jobs") would be obviated.
While all current promises must be met, in the future we would make Social Security and other entitlements need-based after meeting those promises, with the bulk of retirement income coming from assets in a tax-deferred Capital Homestead Account, financed by discounting bills of exchange at commercial banks, and rediscounting at the Federal Reserve. As such, Social Security or other welfare would not be taxed, as "need" would be defined as someone having an income less than the exemption.
A national sales tax, like all ad valorem taxes, is both strongly regressive, and therefore unjust, falling most heavily on those least able to pay, and adds the "double whammy" in that it is a dollar-for-dollar reduction in the very consumption that justifies new capital formation and thus job creation. An income tax inhibits new investment by reducing the incentive to invest by taking a percentage of profits, but ad valorem taxes take away the very reason to invest in the first place by diverting 100% of each dollar spent on the tax away from consumption. If you're trying to rebuild your economy, ad valorem taxes are a really, really bad idea.
As Harold Moulton explained in The Formation of Capital (1935), the demand for new capital is derived from consumer demand. Anything, therefore (such as the Keynesian insistence that new capital can only be financed out of reductions in consumption), that decreases consumption negates the very capital investment it finances. This is the "economic dilemma," unavoidable under Keynesian assumptions, yet non-existent under the Just Third Way reforms embodied in Capital Homesteading.
#30#
Monday, December 26, 2011
A Taxing Problem, IV: Widows and Orphans
We seem to have upset some people with the tax reforms proposed under Capital Homesteading, specifically the generous exemption from taxation of an amount sufficient to meet common domestic needs adequately. According to a recent critic, "My concern is that if by law some citizens are excluded from paying any tax at all, what direct interest do they have in a prudent use of the taxes collected? None." Thus (in the opinion of the critic) everyone — regardless of his or her ability to pay! — must pay something in taxes.
Our critic justified this position by citing a private interpretation of the Bible: "If I am looking back correctly, there were two taxes imposed in ancient Israel, a head or temple tax (the same for rich and poor alike) and the ten percent tax now called a tithe, which, while collected by the Levitical priests was nevertheless used to run the governmental operations of Israel road building, defense, helping the poor, etc., that is until the people demanded a King who would become rapacious in his taxing appetite."
Our critic proposed a tax system that, at first glance, appears to be more straightforward than the Capital Homesteading reforms: "I was thinking of two federal taxes, one a national sales tax to be used just to pay off the national debt, and the other a flat income tax with few or no exemptions or deductions but NO tax on interest income from savings or income from retirement investments, whether private (since it was already taxed) or a Social Security check."
To begin, even to address the critic's comments, we have to set aside the fact that you can't prove anything from the Bible that you don't already believe. It is a book written by believers for believers. Something is in the Bible because the people who put it together believed it to be true; it is not true because it is in the Bible. Thus, the only thing you can prove by the fact that something is in the Bible is the fact that something is in the Bible.
For example, the story that Abraham was apparently commanded to sacrifice his son does not prove that God commands us to sacrifice our children to Him. The story could be relating an instance where Abraham thought he was carrying out what seemed to be God's command (private interpretation again), but was stopped at the last minute by direct divine intervention from doing something stupid. We don't even know as a provable fact that the story is not allegorical — there are no "witnesses" or evidence other than the story itself. We need competent teaching authority and common sense, not an interested motive, to understand the story.
With that in mind, let's first take a look at the head or temple tax. This was a silver half-shekel (about two day's wages) per adult Jewish male per year, with (somewhat ironically) the shekel of the Phoenician city state of Tyre bearing the image of a pagan god named as the "official" temple coin accepted in payment. Thus, contrary to our critic's assertion, the temple tax was not the same for rich and poor alike. Women and girls did not pay it at all, while only males over the age of thirteen paid, being considered adults.
Further, if we read the Bible closely, we realize that the temple "tax" was actually a voluntary contribution. If you wanted to be considered an adult Jewish male, you paid the "tax," otherwise, not. An exemption for those who simply did not have the money or who did not want to be considered "official" Jews is implied in a passage in the Gospel of Matthew — and Matthew, as a tax collector, knew the system. In Matthew 17:24-27, someone asks Peter if Jesus pays the temple "tax."
The question would not make sense if the temple "tribute" (as it has it in the King James Version) did not have a voluntary aspect, that is, if it was a true tax in the modern meaning of the term. With respect to only being levied on those able to pay, it is important to note that neither Peter nor Jesus paid the tax until after the question was asked — they didn't have the money.
In response to the question, Jesus instructs Peter to go fishing, and says that in the mouth of the fish Peter catches he will find a coin sufficient to pay for both. The clear implication, of course, is that to avoid scandal ("Lest we should offend them" — KJV) Peter and Jesus pay, even though (as we necessarily infer from the very fact of the question) they are not obligated to do so based on their inability to pay, and (for Jesus) the added reason that, as the Son of God, He is not liable in any event for paying taxes to Himself.
As for the tithe — the widow, the orphan, the poor and the stranger were objects of special concern to the God of the Jews. In Exodus 22:21-24, we find the clear statement, "Thou shalt neither vex a stranger, nor oppress him: for ye were strangers in the land of Egypt. Ye shall not afflict any widow, or fatherless child. If thou afflict them in any wise, and they cry at all unto Me, I will surely hear their cry, and My wrath shall wax hot, and I will kill you with the sword; and your wives shall be widows, and your children fatherless."
The tithe for the support of the poor, the widow, and the orphan was levied every third year of a five-year cycle, not annually (Deuteronomy 26:12-14). Otherwise, the tithe was to be used to purchase goods for human consumption in the Temple and for personal use at religious festivals (Deuteronomy 14:22-27). Forcing the poor, the widow, and the orphan to pay a tax when they cannot reasonably be expected to pay would, by most people, be considered "afflicting" them in a very important "wise." Taxing them incurs the "hot wrath" of God, and death by the sword, with your own wife and children put into the position of being oppressed by others as you yourself have oppressed the widow, the orphan, and the stranger. The God of Abraham, Isaac, and Jacob is clearly prepared to take strong action against such injustice, for "He doth execute the judgment of the fatherless and widow, and loveth the stranger, in giving him food and raiment" (Deuteronomy 10:18).
If the tithe was supposed to be imposed on everyone, regardless of ability to pay, then the Israelites — and their God — were hypocrites. This is because the tithe was, in part, intended to provide for the support of the poor, the widow and the orphan (Deuteronomy 14:28-29). Taxing the poor, the widow and the orphan for the support of the poor, the widow and the orphan would thus be a case of robbing Peter to pay Peter, that is, taking money from someone in order to give it back!
Further, if we take the "benefit principle" as our sole rule of taxation (as our critic evidently did) distorting it all out of proportion to common sense, even political expedience, we have to ignore the fact that the God of the Jews specifically commanded that widows and orphans were to be included in the benefits of being members of the community, even though they obviously did not pay the tithe. By the explicit command of God Himself they were not to be excluded from the festivities celebrating the Feasts of the Lord (Deuteronomy 16:11, 14), but were to be considered full members of the community, not second-class citizens.
Thus, if we look at the Law of Moses closely, we see exemptions for the poor, the widow, the orphan and the stranger. It is, and always was unjust to take from people what they need to meet their material needs adequately, forcing them to rely on private charity or a return from the State of what is properly theirs, coercing them into a condition of dependency.
As Pius XI explained in Quadragesimo Anno, § 49, quoting Leo XIII in Rerum Novarum, "it is grossly unjust for a State to exhaust private wealth through the weight of imposts and taxes." How much more unjust could it be, then, not only to "exhaust private wealth" of those who have it so they have nothing left on which to live, but to tax away what people don't even have in the first place!
Tomorrow we will conclude our response to our critic and address the rest of the concerns raised.
#30#
Our critic justified this position by citing a private interpretation of the Bible: "If I am looking back correctly, there were two taxes imposed in ancient Israel, a head or temple tax (the same for rich and poor alike) and the ten percent tax now called a tithe, which, while collected by the Levitical priests was nevertheless used to run the governmental operations of Israel road building, defense, helping the poor, etc., that is until the people demanded a King who would become rapacious in his taxing appetite."
Our critic proposed a tax system that, at first glance, appears to be more straightforward than the Capital Homesteading reforms: "I was thinking of two federal taxes, one a national sales tax to be used just to pay off the national debt, and the other a flat income tax with few or no exemptions or deductions but NO tax on interest income from savings or income from retirement investments, whether private (since it was already taxed) or a Social Security check."
To begin, even to address the critic's comments, we have to set aside the fact that you can't prove anything from the Bible that you don't already believe. It is a book written by believers for believers. Something is in the Bible because the people who put it together believed it to be true; it is not true because it is in the Bible. Thus, the only thing you can prove by the fact that something is in the Bible is the fact that something is in the Bible.
For example, the story that Abraham was apparently commanded to sacrifice his son does not prove that God commands us to sacrifice our children to Him. The story could be relating an instance where Abraham thought he was carrying out what seemed to be God's command (private interpretation again), but was stopped at the last minute by direct divine intervention from doing something stupid. We don't even know as a provable fact that the story is not allegorical — there are no "witnesses" or evidence other than the story itself. We need competent teaching authority and common sense, not an interested motive, to understand the story.
With that in mind, let's first take a look at the head or temple tax. This was a silver half-shekel (about two day's wages) per adult Jewish male per year, with (somewhat ironically) the shekel of the Phoenician city state of Tyre bearing the image of a pagan god named as the "official" temple coin accepted in payment. Thus, contrary to our critic's assertion, the temple tax was not the same for rich and poor alike. Women and girls did not pay it at all, while only males over the age of thirteen paid, being considered adults.
Further, if we read the Bible closely, we realize that the temple "tax" was actually a voluntary contribution. If you wanted to be considered an adult Jewish male, you paid the "tax," otherwise, not. An exemption for those who simply did not have the money or who did not want to be considered "official" Jews is implied in a passage in the Gospel of Matthew — and Matthew, as a tax collector, knew the system. In Matthew 17:24-27, someone asks Peter if Jesus pays the temple "tax."
The question would not make sense if the temple "tribute" (as it has it in the King James Version) did not have a voluntary aspect, that is, if it was a true tax in the modern meaning of the term. With respect to only being levied on those able to pay, it is important to note that neither Peter nor Jesus paid the tax until after the question was asked — they didn't have the money.
In response to the question, Jesus instructs Peter to go fishing, and says that in the mouth of the fish Peter catches he will find a coin sufficient to pay for both. The clear implication, of course, is that to avoid scandal ("Lest we should offend them" — KJV) Peter and Jesus pay, even though (as we necessarily infer from the very fact of the question) they are not obligated to do so based on their inability to pay, and (for Jesus) the added reason that, as the Son of God, He is not liable in any event for paying taxes to Himself.
As for the tithe — the widow, the orphan, the poor and the stranger were objects of special concern to the God of the Jews. In Exodus 22:21-24, we find the clear statement, "Thou shalt neither vex a stranger, nor oppress him: for ye were strangers in the land of Egypt. Ye shall not afflict any widow, or fatherless child. If thou afflict them in any wise, and they cry at all unto Me, I will surely hear their cry, and My wrath shall wax hot, and I will kill you with the sword; and your wives shall be widows, and your children fatherless."
The tithe for the support of the poor, the widow, and the orphan was levied every third year of a five-year cycle, not annually (Deuteronomy 26:12-14). Otherwise, the tithe was to be used to purchase goods for human consumption in the Temple and for personal use at religious festivals (Deuteronomy 14:22-27). Forcing the poor, the widow, and the orphan to pay a tax when they cannot reasonably be expected to pay would, by most people, be considered "afflicting" them in a very important "wise." Taxing them incurs the "hot wrath" of God, and death by the sword, with your own wife and children put into the position of being oppressed by others as you yourself have oppressed the widow, the orphan, and the stranger. The God of Abraham, Isaac, and Jacob is clearly prepared to take strong action against such injustice, for "He doth execute the judgment of the fatherless and widow, and loveth the stranger, in giving him food and raiment" (Deuteronomy 10:18).
If the tithe was supposed to be imposed on everyone, regardless of ability to pay, then the Israelites — and their God — were hypocrites. This is because the tithe was, in part, intended to provide for the support of the poor, the widow and the orphan (Deuteronomy 14:28-29). Taxing the poor, the widow and the orphan for the support of the poor, the widow and the orphan would thus be a case of robbing Peter to pay Peter, that is, taking money from someone in order to give it back!
Further, if we take the "benefit principle" as our sole rule of taxation (as our critic evidently did) distorting it all out of proportion to common sense, even political expedience, we have to ignore the fact that the God of the Jews specifically commanded that widows and orphans were to be included in the benefits of being members of the community, even though they obviously did not pay the tithe. By the explicit command of God Himself they were not to be excluded from the festivities celebrating the Feasts of the Lord (Deuteronomy 16:11, 14), but were to be considered full members of the community, not second-class citizens.
Thus, if we look at the Law of Moses closely, we see exemptions for the poor, the widow, the orphan and the stranger. It is, and always was unjust to take from people what they need to meet their material needs adequately, forcing them to rely on private charity or a return from the State of what is properly theirs, coercing them into a condition of dependency.
As Pius XI explained in Quadragesimo Anno, § 49, quoting Leo XIII in Rerum Novarum, "it is grossly unjust for a State to exhaust private wealth through the weight of imposts and taxes." How much more unjust could it be, then, not only to "exhaust private wealth" of those who have it so they have nothing left on which to live, but to tax away what people don't even have in the first place!
Tomorrow we will conclude our response to our critic and address the rest of the concerns raised.
#30#
Friday, December 23, 2011
News from the Network, Vol. 4, No. 51
This past week we came across another reference to the "Panic of 1825" and the fact that one of the contributing factors to the panic was the issuance of securities by the Republic of Poyais in South America . . . a country that never existed except in the mind of "Sir" Gregor MacGregor, who claimed to have been created Cacique (Prince) of Poyais by the native king George Frederic Augustus I of the Miskito Tribe, an indigenous people in what is now Honduras.
"His Highness" (as he called himself), in what has been described as "the most audacious fraud in history" (David Sinclair, The Land That Never Was. Cambridge, Massachusetts: Da Capo Press, 2003), printed currency (Poyais Dollars), emitted bills of credit, and made land grants and accepted investors. Similar to what had happened with the "South Sea Bubble" a century before, nearly three hundred colonists were lured to the Mosquito Coast, largely on the strength of a book by "Thomas Strangeways, Knight of the Green Cross" (a probable pseudonym of Gregor MacGregor), Sketch of the Mosquito Shore, published in Edinburgh in 1822. There they found nothing as described in the book. Fewer than fifty returned alive to England.
The ensuing "Panic of 1825" is considered the first financial downturn caused by the new phenomenon of "economic cycles." From the perspective provided by binary economics, however, "economic cycles" themselves have two causes.
One, there had been a shift away from Say's Law of Markets and its application in the Banking Principle and the real bills doctrine. The backing of the currency shifted from private sector hard assets represented by bills of exchange, to government securities (bills of credit) representing the present value of future tax collections — from assets to debt. This broke the essential link between the money supply ("demand") and production. Governments began believing they could create or reduce demand simply by manipulating the currency, a demonstrably false belief that has affected monetary and fiscal policy down to the present day.
As we have seen in the current global economic crisis, however, when a government that issues bills of credit finds itself unable to collect enough in taxes to make good on its promises, the currency falls in value, and can become worthless. In that case, the bills are termed "fictitious bills." When the government that issues bills of credit doesn't even exist (as in the case of the "Republic of Poyais"), the worthlessness of the currency should be even more obvious.
Two, as capital ownership becomes concentrated and technology advances, replacing human labor with capital in the production process, Say's Law ceases to function because income from capital goes to people who can't possibly spend it all on consumption, and are virtually "forced" to invest the excess in new capital formation. (Do not confuse this with Keynesian "forced savings," which is something different.) Production outstrips the capacity of people who own no capital to consume, resulting in the phenomenon of "economic cycles" as the economy readjusts for what superficially comes across as "over-production."
Thus, in 1825 matters came to a head and caused the first "economic cycle." Both the financial system and the distribution of ownership combined to ensure that Say's Law and its applications would not function. Capital Homesteading reforms address these issues, as we continue to work for the adoption of a Capital Homestead Act in 2012:
• CESJ had its December Executive Committee meeting on Wednesday. If you wish to be notified of future meetings, please send an e-mail to dbrohawn [at] cesj [dot] org. You can participate by telephone as well as attend in person.
• Guy S. out in Iowa has been sending information on Capital Homesteading to the Buddy Roemer campaign Facebook page. He asks that anyone who has names or contacts of politicians who should know about the Just Third Way to send him information via e-mail, or have it forwarded from CESJ.
• Russell Williams has obtained space for an Economic Justice Summit to take place in Waterbury, Connecticut, in January. Norman Kurland may attend as a speaker.
• Monica and Jackie in Cleveland, and now their brother Mark, have been moving things forward there. Great interest has been expressed by Empowering and Strengthening Ohio People ("ESOP") in the Citizens Land Bank and the Homeowners Equity Corporation.
• We received the footage of Norman Kurland that had not been included in the movie Thrive. Rowland B. is editing it as a series of short segments. Norm's interviews include many things that a number of reviewers have found lacking in the final version of the film, e.g., financially feasible options for monetary and tax reform that can advance rapid economic growth in a manner consistent with the four pillars of an economically just society and the three principles of economic justice that will enable people to thrive materially and spiritually.
• Bert Dodson, the award-winning cartoonist, is working on putting together 40 segments on the Just Third Way and Capital Homesteading, in which "Joe Lunchbucket" asks questions about Capital Homesteading and how it will benefit him, the environment, and the country (and the world).
• Norman Kurland has been interviewed on the Meshorn Daniels radio show out of Louisville, Kentucky, and on Tuesdays with Tormala out of Grand Rapids, Michigan. Both hosts have been very receptive and open to the Just Third Way message.
• Russell Williams reports that his radio show, The Challenge out of Hartford, Connecticut, has been getting a larger audience, and there has been a lot of "buzz" about the show.
• Dawn B. says that the CESJ website upgrade is proceeding apace. We have hit some important milestones in the process.
• The revision of Curing World Poverty is on track. We have made it nearly halfway through the first step, which is highlighting possible sections for rewrite, making minor editorial changes, and suggesting alternate text.
• Publicity for CESJ's latest publication, William Thornton's A Plea for Peasant Proprietors (1848, 1874, 2011) is starting to make some headway. Cover thumbnails have been posted on both Amazon U.S., Amazon U.K., and Barnes and Noble, where the book can be ordered retail. Information on bulk wholesale quantities (10 or more copies) at a 20% discount off the cover price is available on the book's website, where you can also download a review copy in .pdf. Send the website link around to your network, and post it on your LinkedIn and Facebook pages as well as tweeting it. People are also encouraged to post (positive) reviews on Amazon and Barnes and Noble, particularly if you purchase the book from one of those outlets (they give priority to actual customers).
• Dave Kelly testified before a House subcommittee regarding the return of the land in Harris Neck, Georgia, to its rightful owners. Dave reported that the hearing went very well.
• An article on the Just Third Way by Norman Kurland is appearing in The ABCs of Harmony put together by Dr. Leo Semashko and published by the Global Harmony Association.
• Larry Walker has been contributing some good comments to the blog postings on taxation and cross-posting them on his blog. You might want to make a visit to his blog, "Natural Born Conservative."
• If Leisa B. in Günzburg am Rhein is reading this — you're not getting e-mails because your allotted capacity has been filled and they're being returned to sender. Empty a few folders and compact them. Otherwise you will continue to miss our immortal writings.
• As of this morning, we have had visitors from 65 different countries and 53 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Bulgaria. People in Trinidad and Tobago, Russia, Australia, Germany, and Argentina spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Orestes Brownson and Socialism, I: The Evil," "Aristotle on Private Property," and "Orestes Brownson and Socialism, II: The Civil War."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
"His Highness" (as he called himself), in what has been described as "the most audacious fraud in history" (David Sinclair, The Land That Never Was. Cambridge, Massachusetts: Da Capo Press, 2003), printed currency (Poyais Dollars), emitted bills of credit, and made land grants and accepted investors. Similar to what had happened with the "South Sea Bubble" a century before, nearly three hundred colonists were lured to the Mosquito Coast, largely on the strength of a book by "Thomas Strangeways, Knight of the Green Cross" (a probable pseudonym of Gregor MacGregor), Sketch of the Mosquito Shore, published in Edinburgh in 1822. There they found nothing as described in the book. Fewer than fifty returned alive to England.
The ensuing "Panic of 1825" is considered the first financial downturn caused by the new phenomenon of "economic cycles." From the perspective provided by binary economics, however, "economic cycles" themselves have two causes.
One, there had been a shift away from Say's Law of Markets and its application in the Banking Principle and the real bills doctrine. The backing of the currency shifted from private sector hard assets represented by bills of exchange, to government securities (bills of credit) representing the present value of future tax collections — from assets to debt. This broke the essential link between the money supply ("demand") and production. Governments began believing they could create or reduce demand simply by manipulating the currency, a demonstrably false belief that has affected monetary and fiscal policy down to the present day.
As we have seen in the current global economic crisis, however, when a government that issues bills of credit finds itself unable to collect enough in taxes to make good on its promises, the currency falls in value, and can become worthless. In that case, the bills are termed "fictitious bills." When the government that issues bills of credit doesn't even exist (as in the case of the "Republic of Poyais"), the worthlessness of the currency should be even more obvious.
Two, as capital ownership becomes concentrated and technology advances, replacing human labor with capital in the production process, Say's Law ceases to function because income from capital goes to people who can't possibly spend it all on consumption, and are virtually "forced" to invest the excess in new capital formation. (Do not confuse this with Keynesian "forced savings," which is something different.) Production outstrips the capacity of people who own no capital to consume, resulting in the phenomenon of "economic cycles" as the economy readjusts for what superficially comes across as "over-production."
Thus, in 1825 matters came to a head and caused the first "economic cycle." Both the financial system and the distribution of ownership combined to ensure that Say's Law and its applications would not function. Capital Homesteading reforms address these issues, as we continue to work for the adoption of a Capital Homestead Act in 2012:
• CESJ had its December Executive Committee meeting on Wednesday. If you wish to be notified of future meetings, please send an e-mail to dbrohawn [at] cesj [dot] org. You can participate by telephone as well as attend in person.
• Guy S. out in Iowa has been sending information on Capital Homesteading to the Buddy Roemer campaign Facebook page. He asks that anyone who has names or contacts of politicians who should know about the Just Third Way to send him information via e-mail, or have it forwarded from CESJ.
• Russell Williams has obtained space for an Economic Justice Summit to take place in Waterbury, Connecticut, in January. Norman Kurland may attend as a speaker.
• Monica and Jackie in Cleveland, and now their brother Mark, have been moving things forward there. Great interest has been expressed by Empowering and Strengthening Ohio People ("ESOP") in the Citizens Land Bank and the Homeowners Equity Corporation.
• We received the footage of Norman Kurland that had not been included in the movie Thrive. Rowland B. is editing it as a series of short segments. Norm's interviews include many things that a number of reviewers have found lacking in the final version of the film, e.g., financially feasible options for monetary and tax reform that can advance rapid economic growth in a manner consistent with the four pillars of an economically just society and the three principles of economic justice that will enable people to thrive materially and spiritually.
• Bert Dodson, the award-winning cartoonist, is working on putting together 40 segments on the Just Third Way and Capital Homesteading, in which "Joe Lunchbucket" asks questions about Capital Homesteading and how it will benefit him, the environment, and the country (and the world).
• Norman Kurland has been interviewed on the Meshorn Daniels radio show out of Louisville, Kentucky, and on Tuesdays with Tormala out of Grand Rapids, Michigan. Both hosts have been very receptive and open to the Just Third Way message.
• Russell Williams reports that his radio show, The Challenge out of Hartford, Connecticut, has been getting a larger audience, and there has been a lot of "buzz" about the show.
• Dawn B. says that the CESJ website upgrade is proceeding apace. We have hit some important milestones in the process.
• The revision of Curing World Poverty is on track. We have made it nearly halfway through the first step, which is highlighting possible sections for rewrite, making minor editorial changes, and suggesting alternate text.
• Publicity for CESJ's latest publication, William Thornton's A Plea for Peasant Proprietors (1848, 1874, 2011) is starting to make some headway. Cover thumbnails have been posted on both Amazon U.S., Amazon U.K., and Barnes and Noble, where the book can be ordered retail. Information on bulk wholesale quantities (10 or more copies) at a 20% discount off the cover price is available on the book's website, where you can also download a review copy in .pdf. Send the website link around to your network, and post it on your LinkedIn and Facebook pages as well as tweeting it. People are also encouraged to post (positive) reviews on Amazon and Barnes and Noble, particularly if you purchase the book from one of those outlets (they give priority to actual customers).
• Dave Kelly testified before a House subcommittee regarding the return of the land in Harris Neck, Georgia, to its rightful owners. Dave reported that the hearing went very well.
• An article on the Just Third Way by Norman Kurland is appearing in The ABCs of Harmony put together by Dr. Leo Semashko and published by the Global Harmony Association.
• Larry Walker has been contributing some good comments to the blog postings on taxation and cross-posting them on his blog. You might want to make a visit to his blog, "Natural Born Conservative."
• If Leisa B. in Günzburg am Rhein is reading this — you're not getting e-mails because your allotted capacity has been filled and they're being returned to sender. Empty a few folders and compact them. Otherwise you will continue to miss our immortal writings.
• As of this morning, we have had visitors from 65 different countries and 53 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Ireland, and Bulgaria. People in Trinidad and Tobago, Russia, Australia, Germany, and Argentina spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "It's the Academics v. the Politicians . . . v. Economic Reality, Part I: Accounting," "Orestes Brownson and Socialism, I: The Evil," "Aristotle on Private Property," and "Orestes Brownson and Socialism, II: The Civil War."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
#30#
Thursday, December 22, 2011
A Taxing Problem, III: Where Did We Go Wrong?
Looking at what has happened to the Federal Reserve and the income tax, we have to wonder what is the root cause of the misuse of these institutions? Where, in other words, did we go wrong?
Trying to be objective, we think it is in how people understand private property and contract, and thus money, credit, banking, and finance. Of these, the (mis)understanding of money appears to be the most immediate problem. Not that they others are unimportant, but the vortex, as it were, seems to swirl around money and credit — according to Henry Dunning Macleod, two forms of the same thing.
Money is legally defined as anything that is accepted in settlement of a debt. It is a contract involving "offer" and "acceptance." It is not, as some theorists declare, a claim issued by the State on the general wealth of society. That is socialism, and is rooted in the understanding of taxation and private property found in Thomas Hobbes's virtual manual for totalitarian government, Leviathan, that denied (abolished) private property:
"A Fifth doctrine, that tendeth to the Dissolution of a Common-wealth, is, 'That every private man has an absolute Propriety in his Goods; such, as excludeth the Right of the Soveraign.' Every man has indeed a Propriety that excludes the Right of every other Subject: And he has it onely from the Soveraign Power; without the protection whereof, every other man should have equall Right to the same. But if the Right of the Soveraign also be excluded, he cannot performe the office they have put him into; which is, to defend them both from forraign enemies, and from the injuries of one another; and consequently there is no longer a Common-wealth." (Thomas Hobbes, Leviathan, Ch. XXIX.)
That is, the king — the State — is the ultimate owner of everything in the State. That being the case, taxes are not a grant from a free citizenry, but a "retaking" of what the State was pleased to allow the citizens in the first place: "[T]he Kings word, is sufficient to take any thing from any subject, when there is need; and . . . the King is Judge of that need." (Ibid., Ch. XX.)
It is interesting to note that Hobbes influenced Walter Bagehot (who, incidentally, had enormous contempt for the United States), while Keynes, the virtual demigod of today's monetary and fiscal policy, revered Bagehot.
The fact is, despite the fixed beliefs of modern academics, it is possible to create money to finance new capital formation without first having to cut consumption and accumulate money savings. Keynes did not understand basic bookkeeping or the accounting equation, assets = liabilities + owners equity. Keynes failed to realize that the "multipliers" developed from his theories, especially the "money multiplier," are complete fantasy.
The money multiplier relies on counting the same asset multiple times and shifting ownership around indiscriminately to meet political ends. The Keynesian money multiplier embodies a fatal error that is obvious to anyone who understands double entry bookkeeping or (better) money. That is, the money multiplier theory assumes that checks drawn on one account remain on deposit in another account without ever being presented for payment!
Anyone who has ever balanced a bank statement knows that this is not the case. Checks clear, decreasing the amount in the account and thus the amount of money available, or they remain outstanding, in which case you still can't spend the money because it has already been spent. Drawing checks against money in an account that has already had checks drawn against it is called "issuing bad checks." It is a civil or criminal offense, depending on the amount of the fraudulent check you issued and the jurisdiction in which you committed the offense. It is what Henry Thornton called a "fictitious bill," that is, money with nothing behind it.
The Keynesian money multiplier, however, assumes as a matter of course that banks are engaged in a vast criminal conspiracy by creating money backed by nothing more than checks drawn against money that doesn't exist. (We never claimed that the Keynesian theory made sense — but it's in all the textbooks.) Today's academic economists and politicians dismiss as ludicrous the actual case, that commercial banks create money by accepting bills of exchange and issuing promissory notes that back the demand deposits.
Thus, if we accept today's standard assumptions about money and credit, there is no way to create money for Capital Homesteading so that ordinary people can become owners of capital without first having to cut consumption and accumulate money savings. If we reject the standard assumption, however, and use a little common sense along with some basic bookkeeping, the way is clear for a more rational monetary system than the debt-backed Leviathan that has kept the world locked into the slavery of past savings.
CESJ's Pro-Life economic agenda, for which we make the case in Supporting Life (2010) takes all this into account, reorienting the economy to conform to the natural law-based three principles of economic justice, 1) Participation, 2) Distribution and 3) Harmony ("feedback" or "social justice"), and the four pillars of an economically just society:
1. A limited economic role for the State,
2. Free and open markets as the best means for determining just wages, just prices, and just profits,
3. Restoration of the rights of private property, especially in corporate and other business equity, and
4. Widespread direct ownership of capital, individually or in free association with others.
In short, to require everyone to pay some tax, regardless whether they have the means or ability to pay, is to force anyone without property — and thus power — into a condition of dependency on the State . . . and keep in mind that "condition of dependency" was, prior to the Civil War, a euphemism for chattel slavery.
#30#
Trying to be objective, we think it is in how people understand private property and contract, and thus money, credit, banking, and finance. Of these, the (mis)understanding of money appears to be the most immediate problem. Not that they others are unimportant, but the vortex, as it were, seems to swirl around money and credit — according to Henry Dunning Macleod, two forms of the same thing.
Money is legally defined as anything that is accepted in settlement of a debt. It is a contract involving "offer" and "acceptance." It is not, as some theorists declare, a claim issued by the State on the general wealth of society. That is socialism, and is rooted in the understanding of taxation and private property found in Thomas Hobbes's virtual manual for totalitarian government, Leviathan, that denied (abolished) private property:
"A Fifth doctrine, that tendeth to the Dissolution of a Common-wealth, is, 'That every private man has an absolute Propriety in his Goods; such, as excludeth the Right of the Soveraign.' Every man has indeed a Propriety that excludes the Right of every other Subject: And he has it onely from the Soveraign Power; without the protection whereof, every other man should have equall Right to the same. But if the Right of the Soveraign also be excluded, he cannot performe the office they have put him into; which is, to defend them both from forraign enemies, and from the injuries of one another; and consequently there is no longer a Common-wealth." (Thomas Hobbes, Leviathan, Ch. XXIX.)
That is, the king — the State — is the ultimate owner of everything in the State. That being the case, taxes are not a grant from a free citizenry, but a "retaking" of what the State was pleased to allow the citizens in the first place: "[T]he Kings word, is sufficient to take any thing from any subject, when there is need; and . . . the King is Judge of that need." (Ibid., Ch. XX.)
It is interesting to note that Hobbes influenced Walter Bagehot (who, incidentally, had enormous contempt for the United States), while Keynes, the virtual demigod of today's monetary and fiscal policy, revered Bagehot.
The fact is, despite the fixed beliefs of modern academics, it is possible to create money to finance new capital formation without first having to cut consumption and accumulate money savings. Keynes did not understand basic bookkeeping or the accounting equation, assets = liabilities + owners equity. Keynes failed to realize that the "multipliers" developed from his theories, especially the "money multiplier," are complete fantasy.
The money multiplier relies on counting the same asset multiple times and shifting ownership around indiscriminately to meet political ends. The Keynesian money multiplier embodies a fatal error that is obvious to anyone who understands double entry bookkeeping or (better) money. That is, the money multiplier theory assumes that checks drawn on one account remain on deposit in another account without ever being presented for payment!
Anyone who has ever balanced a bank statement knows that this is not the case. Checks clear, decreasing the amount in the account and thus the amount of money available, or they remain outstanding, in which case you still can't spend the money because it has already been spent. Drawing checks against money in an account that has already had checks drawn against it is called "issuing bad checks." It is a civil or criminal offense, depending on the amount of the fraudulent check you issued and the jurisdiction in which you committed the offense. It is what Henry Thornton called a "fictitious bill," that is, money with nothing behind it.
The Keynesian money multiplier, however, assumes as a matter of course that banks are engaged in a vast criminal conspiracy by creating money backed by nothing more than checks drawn against money that doesn't exist. (We never claimed that the Keynesian theory made sense — but it's in all the textbooks.) Today's academic economists and politicians dismiss as ludicrous the actual case, that commercial banks create money by accepting bills of exchange and issuing promissory notes that back the demand deposits.
Thus, if we accept today's standard assumptions about money and credit, there is no way to create money for Capital Homesteading so that ordinary people can become owners of capital without first having to cut consumption and accumulate money savings. If we reject the standard assumption, however, and use a little common sense along with some basic bookkeeping, the way is clear for a more rational monetary system than the debt-backed Leviathan that has kept the world locked into the slavery of past savings.
CESJ's Pro-Life economic agenda, for which we make the case in Supporting Life (2010) takes all this into account, reorienting the economy to conform to the natural law-based three principles of economic justice, 1) Participation, 2) Distribution and 3) Harmony ("feedback" or "social justice"), and the four pillars of an economically just society:
1. A limited economic role for the State,
2. Free and open markets as the best means for determining just wages, just prices, and just profits,
3. Restoration of the rights of private property, especially in corporate and other business equity, and
4. Widespread direct ownership of capital, individually or in free association with others.
In short, to require everyone to pay some tax, regardless whether they have the means or ability to pay, is to force anyone without property — and thus power — into a condition of dependency on the State . . . and keep in mind that "condition of dependency" was, prior to the Civil War, a euphemism for chattel slavery.
#30#
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