Tag Archive | capital

Socialism & Fascism

In a recent article, Robert Higgs made the argument that socialism is pretty much dead, and that fascism is instead the dominant economic policy on the globe. As far as I’m aware, this is my first exposure to Higgs, and I must confess: I’m not impressed.

First, it should be readily observable to all people that fascism and socialism are related, in the same sense that an orchestra maestro entails mastery of the musical pieces; fascism is the conductor’s mastery, and socialism is mastery of the song. It’s possible to be a master of the song without being a master conductor, but it’s not possible to be a master conductor without being a master of the song.

In classic logic terms, all bloops are bleeps, but not all bleeps are bloops.

This is because socialism is an economic policy, while fascism is what we would call governmental policy. It’s true that “fascism” is a notoriously difficult idea to pin down, and a lot of people mistakenly attribute “nationalism” as one of its primary tenets, but that’s a misattribution, a result of people focusing more on words than with the essence represented by those words. State supremacy is the hallmark of fascism. Through most of human history, this would have manifested as nationalism and the notion that the nation is the greatest; in more modern times, it manifests primarily as globalism, and the notion that a global government would be the greatest. However, regardless at what level the fascist pledges their allegiance (whether to the nation or to the globe), the primary hallmark is the same: the state that is in charge is supreme.

Everything within the state. Nothing outside the state, nothing beyond the state.

— Benito Mussolini

Socialism is an idea that prescribes state ownership of capital. To explain this, we must clarify the difference between capital and a consumption good. A consumption good is one that does not increase in value, one that, under normal conditions, only decreases in value (i.e., is “used up”). A consumption good is something that is used and ultimately discarded, and is not an investment. Televisions, cell phones, food, clothing, gasoline, and other similar items are consumption goods. Socialism absolutely allows for individuals within the socialist society to own consumption goods. Even the most diehard socialist isn’t going to advocate a system where Bob, having run out of toothpaste, can enter your apartment and help himself to yours. In the socialist apparatus, consumption goods regularly pass into ownership by consumers, where they are consumed, and the state merely creates, assigns, and hands out these consumption goods.

Capital, on the other hand, is held entirely by the state. Houses, land, vehicles, manufacturing plants, and similar items are the property of the state, and the state uses this capital to create the consumption goods and dole them out to the citizens. The state owns the toothpaste manufacturing plant and provides one tube a month to each citizen, in other words, and once that toothpaste is handed over, it’s generally considered that citizen’s toothpaste. The state doesn’t really care what happens to consumption goods, because they are consumption goods–even if Bob hoards all of his toothpaste and attempts to sell it on the black market, it’s just not going to give him enough capital to seriously challenge the state. Besides which, it has an expiration date–the day is coming that the toothpaste will be without any value at all.

When we discuss “private property” under the ideas of capitalism, we are not saying that individuals have the right to own consumption goods–this right is a given, and even the most adamant socialist isn’t likely to challenge it. Instead, we are saying that individuals have the right to own capital. Individuals have the right to purchase items that will generate a return on the investment, that will produce wealth. Under capitalism, an individual can purchase the glass, copper, gold, plastic, and whatever else is necessary in order to produce phones, which are then sold as consumption goods to other individuals for money, thereby creating a return on the investment. This model is obviously successful, and obviously creates a net benefit to society as a whole: some people get the phone, and one person is rewarded for their investment with more money.

But it’s not my intention here to point out that capitalism is better.

In fact, the requirement that individuals be allowed to own capital is in the name: capitalism. We could easily call socialism consumptionism, in fact, because it restricts the individual’s ownership of property solely to consumption items–to the phones produced, to the toothpaste, to the gasoline, to the food, and never to the facilities, rigs, or farms where these things are produced. Instead, everything of real value that can have labor added to it in order to increase that value belongs to the state.

Five hundred acorns are of very little value to me, after all. However, by adding my labor to them (by planting them, nourishing them, and watering them), I can turn them into 500 trees of considerable value. This is the essence of capitalism: taking a resource, investing in it, and seeing a return on those resources. In the socialist order, one would still be allowed to own acorns, in most cases, but the state would claim the trees as soon as they were grown, and would fine and arrest the person who planted them.

Socialism is state ownership and control of capital property.

Fascism is state control of pretty much everything, including capital property. The state cannot be supreme if it does not control the means of production (i.e., capital). This is why every fascist government that has risen has also been socialist, from Mussolini’s Italy to Hitler’s Germany to Kim Jong Un’s North Korea. Strangely, in his article, Higgs stated that North Korea is one of the few socialist nations in the world today. I have to marvel that this popular thinker doesn’t understand what he’s talking about, because socialism absolutely dominates the globe. In fact, North Korea is one of the few fascist nations in the world today, where the state openly controls everything from education programs to capital.

Similarly, we in the United States are much more fascist than we’d like to realize, and we’re entirely socialist. No American is allowed to own capital; the ownership of all capital is ultimately the American Government. In a capitalist order, a person purchases a house and the land around it, and then it’s theirs–it belongs to them, and they can do whatever they want with it, because they are the owner. This is not the case in the United States. In the United States, the person has an enormous list of things they are not allowed to do with the property, must petition for the right to do countless things that they supposedly have the right to do, and then must pay rent each year to avoid having the property taken away from them. Paying property taxes to the government in order to avoid having the government take the property away is not in any sense different from paying a bank note to prevent the bank from taking the property away.

Why should the government get money from you each year, just because you own a house and the land around it? It’s not the government’s house or land, is it? By inserting themselves into this process, lining up outside of your property with guns and soldiers and demanding that you hand over money or they will forcibly remove you, the state has usurped your ownership of the home and made itself the owner. We can use all the doublethink and cognitive dissonance we like, but the fact remains that this affair is known as “renting,” and not “owning.”

This is similarly the case for whatever manufacturing facility you own. Not only are you required to pay duties on thins that you import, but you must pay the government a portion of your profits regularly, because, if you don’t, they will take the manufacturing facility away from you. And, of course, you can’t just build a manufacturing facility in your backyard; you must acquire permits, many of which are exorbitantly expensive, and rely on getting the government’s permission for you to use “your” property in the way that you want in the first place.

This, to Robert Higgs, is “private property.”

What nonsense.

It would be no different if I came by your manufacturing facility once a month with armed goons and demanded a cut of your profits for “protection,” and made it clear that, if you didn’t pay, you would have an “accident” that would end with one of my people being installed as the owner of the facility. This is what the state does now, today, in 2017 Common Era, in the United States. The idea that this arrangement constitutes “private property” is demonstrably false, and has been demonstrated as so.

If that was your house, you could burn it down. If that was your house, you could add a wing without getting permission from the government. If that was your house, you could install your own septic tank. If that was your house, you could dig an enormous hole and create a pond. If that was your house, you would not have to pay someone each year in order to prevent it from being taken away from you. Instead, it is the state who decides whether you can have permission to add a wing, it is the state who decides whether you may install a septic tank (“No, you cannot, but you can pay $1,200 to this guy who paid us $3,000 for his license to do it.”), and it is the state who ultimately owns the property, who must receive a payment from you regularly, on top of all these other considerations.

The thing about ownership is that it means I can do whatever I want with my property.

Compare the ownership of capital in the United States–as most obvious in regard to houses–to the ownership of consumption goods. I can do whatever I want with the Linksys WRT54GL that I’m looking at. I can write my name on it. I can install DDWRT firmware. I can put it on whatever subnet I want. I can take it outside and smash it to pieces. I can unload sixteen 12 gauge shotgun shells into it. I don’t have to ask anyone’s permission, and I don’t have to pay anyone each year for the “privilege” of owning it. It’s mine.

That difference is critical to understanding the current state of the world. No, Mr. Higgs, socialism is not on the decline. It’s more powerful than ever, and more dominant than ever. If we do not take back the right to own capital, free of government regulations, government mandates, and government threats of theft, then the problems we face can never be fixed.

And all of this is without even getting into Intellectual Property, eminent domain, civil asset forfeiture, and the millions of regulations that bear down on us every single day. Anyone who looks at this state of affairs and calls it “private property” is severely confused. After all, both socialism and capitalism feature the ownership of consumption goods. As such, the ownership of consumption goods cannot be a deciding factor in whether a society is capitalist or socialist–as it is contained on both sides of the equation, it is reduced:

Private ownership of capital + private ownership of consumption goods = Capitalism

State ownership of capital + private ownership of consumption goods = Socialism

Anyone can see that “private ownership of consumption goods” has nothing to do with it, and must be subtracted from both. What we’re left with is that “private ownership of capital = capitalism” and “state ownership of capital = socialism.” Seeing as Fascism is state dominance over everything, from medicine to education to capital to consumption goods (because, for obvious reasons, if the state manufactures the only toothpaste in existence, then the state controls who has toothpaste and who doesn’t, as opposed to capitalism, where a person who has pissed off Colgate can still purchase Crest).

Fascism is also alive and well, although the state that people want to be supreme over everything has moved up one level, for the most part, to globalism instead of nationalism. This is why I once made the point that national fascism is easier to defeat than global fascism, while I explained my support for Brexit and America leaving NATO and the United Nations. Although viewed as contentious, that statement is actually an obvious extrapolation of how local governments are easier to influence than federal ones. It is much easier to get my city council to do what I want than it is to get the federal government to do what I want, and much easier to get the federal government to do what I want than it is to get the world government to do what I want. There is also the reality that world government soldiers from Uganda and New Guinea will face no real hardship oppressing people in California, while soldiers from California will face some internal difficulty oppressing people in Arkansas, and soldiers from Tate County, Mississippi will face considerable internal strife oppressing the people of Tate County. Local > distant, in every conceivable way.

However, that fascists today are roughly evenly split between nationalism and globalism is of no concern. They want state supremacy either way. The global fascists simply want to create a higher level of government to be supreme and enforce their desires. In that way, the globalist fascists are more fascist than the nationalist ones. And, yes, there is a strong correlation between those who want a powerful world government that can dictate national policies and those who openly desire socialism; yet, even among the national fascists, there is a strong tendency for the state to control different aspects of people’s lives (marriage, sexual identity, drugs, whatever). The globalist fascists simply want to create a Big Joker, because they don’t like how the nationalist fascists have the Little Joker.


Christmas Isn't the Capitalist Wet Dream

I’ve seen a lot of posts and articles in the past few days from libertarians and other capitalists that suggest that Xmas is some kind of Uber Capitalist Celebration, like it’s just this zenith of capitalist ideas and a wonderful, grand thing. In the interest of religious friends, I want to draw a distinction between Xmas and Christmas, because I’m not sure they’re the same thing. Christmas is a holiday about love, family, and friendship–regardless of where it may have its roots. Xmas is a holiday tied to Black Friday and is directly at odds with family and friendship because of this.

[featured-img][/featured-img]There were Facebook posts this year of people asking businesses to not open their stores on Thanksgiving Day, to at least wait until Friday to open up their Black Friday sales, but we all knew they wouldn’t do that, and we all knew that half of those people posting such things would be the first in line. It’s this hyper-competitiveness that destroys the Christmas spirit and replaces it with the Xmas spirit. People abandon their family and friends to go stand in line, rampage over old ladies, punch little kids, and all manner of other horrible things.

In most ways, Christmas has been replaced with Xmas, and it hasn’t been a good thing. It has invaded Thanksgiving–and it threatens to invade Halloween. Now that we have allowed the day to successfully sink its teeth into another holiday, there is likely no end to it; give it a few more decades, and Xmas will have devoured everything from December 25 to September 25. People get so caught up in it, but it’s not because of friends and family–it’s because of gifts, omg, gifts!

One could say that this is a good thing–the spirit of giving and all that, but it’s not the spirit of giving, is it? No, it’s the spirit of buying. We all know this to be true, even if we don’t say it. My father, being perpetually broke, spends each year making fudge and other sugar-loaded crap that he gives out, and it’s never stated but it’s always there, underlying the entire gift-giving process: “These aren’t real gifts.” I believe my nephew has outright stated that. But we don’t make gifts, and none of us has any interest in making gifts. Those who do give such gifts are looked upon strangely, and why? Because this isn’t a season of giving; it’s a season of buying.

There are outliers, of course, and nothing is universally true. But it’s never “Make your loved ones something special this holiday season” that we see, is it? Not anywhere do we see such messages. We’d expect advertisers to jump on the “NO YOU HAVE TO BUY YOUR GIFTS” train–we’d expect them to be in charge of that train, in fact–but their subtle propaganda has been so effective that the masses of people believe it. You’re weird if you make people gifts. That’s too personal, too emotional, too… weird.

But I didn’t mean to get into that.

I’m more concerned with the libertarians and capitalists who have so misunderstood economics and capitalism that they think Xmas is this wonderful season. I’ve even seen people call it “CapitalisMas.” It’s sad that people who profess to understand capitalism show themselves to be so extremely confused about it.

Capitalism is about taking resources and using them to generate a profit. It is quite literally about acquiring resources and turning them into capital.

Realistically, we have to draw a distinction between Consumer Goods and Capital Goods–one is not an investment, and one is. A consumer good is something that is consumed–slowly or quickly, it doesn’t matter–and that won’t return any value beyond the gluttonous value of having consumed it. Chocolate, televisions, video games… The list is practically infinite. A capital good, on the other hand, is something that is an investment, something that will return a profit–or, at least, has the potential to return a profit. No matter how many televisions you buy for your children, those televisions will never become profit, because they aren’t investments. The moment that box is opened, the value plummets, and after 2 or 3 years the value of that television is no better than twenty or thirty percent what it was when purchased. The same is true of phones, computers, and other electronics. Houses, vehicles, stocks, bonds… These are capital goods.

The more consumer goods a person purchases, the fewer resources they have with which to purchase capital goods. Consumer goods, in a very real sense, are the equivalent of pissing away money–except the money isn’t really pissed away, is it? No, it simply changes hands, transferred from the Buyer to the Seller. In exchange for your capital good of “money,” they provide you with a consumer good that is guaranteed to become worthless at a rate that makes the USD look like a good investment.

So what is Xmas? It’s not the Glory of Capitalism that people make it out to be, because no one is out buying capital goods for the holiday season. They’re out buying consumer goods, which transfers money from their hands to the hands of people who sold them the consumer goods–the goods that will be consumed and discarded. It is the Glory of Consumptionism, and Consumptionism and Capitalism are actually at odds with one another–because every penny one spends on a consumption good is one less penny that one can spend on a capital good.

It is not consumption that is the driving force of economic growth. It is savings. Savings is the catalyst of economic growth and the destroyer of poverty. Think about it. No amount of televisions, iPhones, Xboxes, or chocolate will ever make a person wealthy. The expiration date on these things is simply too soon; they are terrible investments. However, even something simple like taking that money and instead burying it in a jar outside will begin the slow process of moving ahead.

If Bob makes $8,000 a year, Bob will never get out of poverty by spending all of his money. He can buy all the televisions and gaming systems that he wants; he will always be poor. What can Bob do? He can save his money. Every penny that Bob puts back is Bob’s profit–he has weighed his income against his expenses and has a surplus of capital. This is capitalism. Bob spending all of that money on consumption goods that he will consume and discard is not capitalism; it is a method of transferring wealth from the buyers to the sellers while leaving the buyers with nothing of value. If this is what you are advocating as a good thing, then you’re not a capitalist.

You’re a Cronyist.

So masses of people–I would hazard the guess that we’re looking at 90% of the American population–have been carefully and deliberately persuaded by the sellers to spend obscene amounts of money each year on consumption items. So parents buy toys that the kids will break or stop playing with, clothes the kids will outgrow, computers that will become obsolete, all because decades of advertising and blatant manipulation have left people convinced that if you don’t buy, buy, buy! then you’re a Scrooge, a monster, and “Bah, humbug!” to you.

Capitalism doesn’t work when masses of people keep themselves in poverty by transferring wealth to the manufacturers and sellers while only getting consumption goods–things that will be consumed and discarded. That is a recipe of careful wealth redistribution from the bottom to the top. It doesn’t matter that it’s not orchestrated by the state; it’s still a huge problem, creating a permanent caste of people who consume everything they can get their hands on, swapping out wealth for chocolate, and digging themselves deeper into poverty rather than lifting themselves out. We should not be advocating this. We should not be cheering for this.

We should be fighting tooth and nail against this.

We should be fighting hard against the propaganda that if you’re against Xmas shopping, then you’re a Scrooge and “just need to get into the Xmas Spirit!” We should be fighting to reveal the truth of the holiday, that it’s not about giving; that it’s about buying. We should be working to educate the masses of people and explaining to them that consumption goods do not and cannot end poverty, that consumption cannot end poverty, and that the only true catalyst of economic growth is savings, not consumption.

Capitalism is about taking a resource and turning it into capital–hence why it’s called “capitalism.” Xmas, on the other hand, is about taking a resource and turning it into nothing: clothes that will be outgrown, toys that will be broken, games that will be beaten. This isn’t to say it’s bad to buy things; it certainly isn’t. There’s nothing wrong with consuming or consumption. But an entire holiday dedicated to it? And loads of people mistaking it for some kind of capitalist Ramadan? No. Just no.

Taking a resource and consuming it–that’s like literally the opposite of capitalism.

Save, save, save!

Not “spend, spend, spend!”

This is Keynesianism versus Austrianism–Hayekism, if you like. Perhaps Misesian? And we have loads and loads of “capitalists,” “libertarians,” and “anarcho-capitalists” advocating Keynesian economic strategies. I wonder if these are the same people who have confused pro-market with pro-corporation, who have confused being a libertarian with being a corporate shill. As libertarians, capitalists, and anarchists, we should want nothing more than to see the poor lift themselves out of being poor.

But that will never happen as long as we foster this Keynesian mentality that spending is the catalyst of economic growth.

Keynesians, pretending to be capitalists.