I would have government defend the life and property of all citizens equally; protect all willing exchange; suppress and penalize all fraud, all misrepresentation, all violence, all predatory practices; invoke a common justice under law; and keep the records incidental to these functions. Even this is a bigger assignment than governments, generally, have proven capable of. Let governments do these things and do them well. Leave all else to men in free and creative effort. - Leonard E. Read, Notes from FEE (October 1, 1954).
This is true libertarianism. Let us update it by casting it in relation with Concordian economics policy. Concordian economic policy, the reader may recall, advocates the full exercise of these four economic rights and responsibilities (Rs&Rs):
1. We all have the right of access to land and natural resources; we all have the responsibility to pay taxes for the exclusive use of resources that are under our command. Since natural resources are a common good, paying taxes is a way of compensating the community for the exclusion of others from the personal use of land and natural resources. The Georgist Movement has proved it time and again: If we do not tax the land appropriately, the entire social and economic fabric comes apart.
2. We all have the right of access to national credit for capital formation; we all have the responsibility to repay such loans. We need to Mend the Fed - not End the Fed. Three moorings will suffice: (1) new money in the form of loans has to be created only for the creation of real wealth (not to fund financial operations); (2) loans have to be issued at cost (not at arbitrary interest rates); (3) loans have to be issued to benefit everyone, by extending loans only to individual entrepreneurs, co-operatives, corporations with ESOPs and CSOPs, and governmental units with taxing powers, so that loans can be repaid. National credit is the second and last great common good. It needs to be used for the common good. Implementing this right and responsibility will accomplish a large number of goals: It will especially foster entrepreneurship and innovation; it will create a stable monetary system; it will free us from our tether to international behemoths; it will free the “animal spirits" of mankind from vain regulations. William Jennings Bryan knew it well:
“When we have restored the money of the Constitution, all other necessary reforms will be possible, but until this is done there is no other reform that can be accomplished."
We have lost more than a century in hot pursuit of ephemeral goals; and we have dropped the prize that counts most: control of the process of creation and distribution of money.
3. We all have the right to the fruits of our labor; we all have the responsibility to offer services of value equivalent to established compensation. Beyond a “living wage," and, of course, “equal pay for equal work," the duty of the employer is to share with the worker the value of capital appreciation of the firm. Only then will the reward between labor and capital be equalized. An employer who cannot afford a living wage and a fair division of the capital appreciation of the firm among all employees in accordance with the value of their participation in the production of wealth has no right to be in business. The anti-capitalistic bias of many economists and most media has degenerated into a disparagement of profits and property ownership. We neglect that political freedom requires economic freedom - or it is a farce.
4. We all have the right to protect our wealth; we all have the responsibility to respect the wealth of others. This right is fully understood and practiced today, except in the area that matters most, the area of mergers and acquisitions of entire firms. Only one point can be made in this context. The “trustification" process - the process through which the Robber Barons robbed the world of the fruits of the Industrial Revolution - ought to be brought under public control, because if the public does not control the large corporations, the large corporations will control the public interest. What needs to be controlled is, not the process of internal growth, but the process of growth-by-purchase of entire corporations, the bully way, the Pac Man Way. The suggested policy will not impinge upon the freedom of the firm. Internal growth can reach the sky.
Let us re-read these Rs&Rs now in relation to Laurence Read’s injunction, let government “suppress and penalize all fraud, all misrepresentation, all violence, all predatory practices."
First R&R: When people do not pay their fair share of taxes on land and natural resources, they commit a fraud against all other citizens who are compelled to pay higher taxes in order to meet the obligations incurred by governments. (Some other day we might want to examine the issue of government obligations, namely the fiscal side of economic policies.) This issue of taxes on land and natural resources is actually much bigger today in reality than it was ever considered in economics textbooks: Large corporations, with the aid of too many economists, have so bamboozled the country that, instead of paying taxes, they receive a subsidy, the mineral extraction allowance. This is a misrepresentation of reality. As we have seen even in celebrated movies and documentaries, these extractive practices are often accompanied by physical violence - let alone literal violence of the rights of common citizens. If physical violence against human beings is quite subdued in developed countries such as the United States, violence against nature often reaches such unbearable levels that human beings are ready to put their lives on the line in order to protect Nature. Whole mountain tops disappear; rivers become polluted for miles downstream. Read these issues in the context of struggles around water extraction these days, and you have to conclude that these are indeed predatory practices.
Second R&R: What to say, in brief, about the second set of Rs&Rs? Under normal conditions, national credit today is accessed by a limited number of “primary dealers." To say that they defraud the rest of the public is not intellectually accurate. No economist seems to be aware of this condition and seems to be ready to alert the public and the very powers that be about it. But one can definitely state that this condition is a gross misrepresentation of the reality: The legal, indeed in the United States the Constitutional, and moral reality is that value to the currency of a nation is given by the blood sweat and tears of the people; hence, the right of access to national credit belongs to the people and not to the bankers. To look at it dispassionately, one ought to say that to look at money is to look at violence. The forms of violence through which people obtain money from each other are nearly infinite. A close reading of this condition is better accessed through a reading of criminal and civil justice records. To obtain an accurate reading of such records, do not look at predators; simply look at their preys.
Third R&R: With a few changes, the observations concerning the second set of Rs&Rs can be repeated for the third set. Here the indictment of today’s practices is more specific: The fraud hidden in the labor contract concerns the capital appreciation of the place of work; this is clearly created by the workers, but it is with impunity allotted to the owners of capital. And here is the misrepresentation as well: the existence of capital appreciation, which of course can become depreciation, is mostly passed under silence by economists and lawyers. Is there violence in this practice? Well, the violence is neither open nor continuous; but it does explode, with greater or lesser force, during periods of labor strikes. If this is not defined as a predatory practice, how else can it be defined?
Fourth R&R: The most insidious form of corruption today concerns the practice of mergers and acquisitions. Somehow, today’s society pays lip service to it by attempting to prevent monopolies. And since monopolies are very hard to define, public administrators of justice are ultimately left unarmed against such predatory practices. The worst of all situations occurs when present owners are offered bribes that they cannot resist: They do sell their inheritance for a mess of pottage, but they generally discover the truth of having been defrauded too late. So, fraud there is, simply by definition: Without fraud, the organizers of mergers and acquisitions would not command such overwhelming amounts of resources to bribe nearly everyone in the process: economists who should analyze all aspects of such situations, lawyers who ought to follow dictates of justice; members of the media who generally report such cases as spectator sports; and on and on to theologians, who prefer to concentrate their attention onto affairs of afterlife. Misrepresentations are legion; each one of the people just listed will offer a long series of justifications for looking the other way. Is there violence in these cases? Well, it all depends on how one defines violence: Certainly, legal control of many pension funds destroyed in the recent waves of mergers and acquisitions was not relinquished without “struggle." Predatory practices? If these were not predatory practices, they would not be undertaken in the first place,
What to do with such knowledge? First of all, one needs to analyze it in detail; one needs to absorb it in his bones; then one needs to discuss these issues openly with anyone who is ready to listen. The result of illumination might amaze us: It is my firm belief that very few have analyzed these issues in detail and, certainly, comprehensively. Most such practices are covered by ignorance. Once in the open, these practices will become abated, for the essential reason that predators will be made aware that they could have obtained just as much and for just as long without damaging the interests of other people. They would discover the wisdom of the Russian saying: “Greed ruins the greedy."
As it can be seen, in general much of the economic trouble today does not arise from the size or the type of corporation. It arises from the fact that corporations are owned by a small number of people and controlled by an even smaller number. Do limit access to national credit to corporations with Employee Stock Ownership Plans (ESOPs) and even Consumer Stock Ownership Plans (CSOPs), and you are going to accelerate the transformation of the American worker into an American capitalist - a responsible capitalist. In the end, there is no safety in preaching about corrupt practices. Discoveries occur after the damage has been done. The hope is that in the future responsible workers who are owners of their corporations will have enough understanding and enough moral fortitude to prevent such practices as, for instance, were tolerated within the rank and file of Duplicitous Dupont. And the Dupont Corporation is, under so many other aspects, such an admirable corporation.
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