Written by Carmine Gorga, The Somist Institute
A crisis is an opportunity. The Coronavirus pandemic offers us an opportunity to start almost from scratch. Let us try to meet this challenge.
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Historical Origins of Current Economic Crisis
Undoubtedly, the current crisis is a crisis of both Capitalism and Socialism. Neither form of organization of society has been capable of solving our major social, economic, and political problems. The most acute problem is the persistence of poverty amidst plenty – a problem made more acute by the Coronavirus pandemic.
Our current crisis is nothing new. We have been living with it for the last four to five hundred years. It actually started with John Locke’s decision to abandon the Aristotelian/Aquinian project of economic justice in favor of a policy that exalts the justice of property rights.
Not for naught, John Locke is recognized as the intellectual father of Individualism and Capitalism.
Did John Locke ever suspect the potential retort: Do you want to talk of the justice of property rights? Let me tell you of the injustice of property rights. That is what Karl Marx and the Socialists did.
Karl Marx and the Socialists, of course, are widely recognized as intellectual fathers and mothers of Collectivism and Socialism/Communism.
There is where the discourse still stands today.
The Curse of Property Rights
Being related to existing property, property limited in amount at any given time, property rights have become a curse. Everyone wants them; indeed, everyone wants more of them. It is this inevitable social dynamic that leads to an avalanche of profound, but largely disguised errors. Essentially, it leads to the combined abyss of scarcity and poverty.
To escape poverty, our social, economic, and political imagination has given rise to the phenomenon of the Masters of Mankind. It was no other than Adam Smith who tagged them in this fashion:
“All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
A Long Story Made Short
An interesting dynamics has dominated the world during the last four to five centuries. The literati, unable to free themselves of the deep cultural genius of Cervantes, have written about the windmills; the engineers have focused on creating the windmills; and the oligopolists, the Masters of Mankind, have concentrated their attention on owning and controlling the windmills.
A Centuries-Old Cry of MAGA People
The consequences of the actions of the Masters of Mankind have been felt most by those who today are identified as MAGA People. As pointed out elsewhere,
There is much more than words that our political leadership owes our country men and women – and children. There is a whole array of injustices that have to be set aright. Set these injustices right and you unify the country. We must realize that, while MAGA People are at the forefront of the affront of injustices, no section of the population escapes scot free.
The affections that hold MAGA People together are the resentments and the afflictions that society inflicts upon them. Their lives are being eviscerated by the latifundia; yes, who knows about the latifundia any longer? Ever since Constantine converted to Christianity, latifundia have disappeared from polite political imagination; but vast tracts of land – whether in the wilderness, in dilapidated downtowns, or in the undeveloped band of land that strangles the cities – are still controlled by few people and rich corporations. As a consequence:
- MAGA People tend to be corralled into crowded lots.
- MAGA People’s lives are being eviscerated when money is lent to people with money on easy terms and the people without money are left to pay outrageous interest.
- MAGA People’s lives are being eviscerated whenever two mega corporations are glued together; then the few gain more power and the people within and without both corporations suffer many afflictions.
- MAGA People’s lives are being eviscerated by robots that take their jobs, their livelihood, away.
No, economic oppression is not due to the ill will of anyone. It is systemic; it springs from the system, a system that we have built helter-skelter, adding a patch here, and a patch there. No one has designed it. There has never been any real understanding of the economic process as a whole – only understanding of parts of the elephant. In its development we have overlooked many essential elements. It is now time to put it all together.
We have built a system that ultimately affects negatively everyone. Do we ever consider the condition of the billionaire who goes to bed tonight with the fear that he or she will wake up to the news that, due to the collapse of the Stock Market somewhere in the world, this poor soul has lost a good chunk of the wealth so painfully accumulated over the years?
Have we considered the psychological reflection on the affluent when this society opts for a “preferential treatment for the poor”? If we are going to love the poor so much, to the extent of giving them a preferential treatment, don’t we implicitly say that we hate the rich – or at least we have less love for the rich?
Have we seriously considered that we have built a society of beggars? While the poor beg for food and shelter, the middle classes beg for a job. And the affluent are constantly begging for a subsidy and/or a tax reduction.
Yes, these horrible conditions that weigh so heavily on the life of nearly everyone today can and must be changed.
From Property Rights to Economic Rights
To set things right, we need a major cultural revolution. We need to shift our attention from property rights to economic rights. We need to shift our attention from the finite amount of property rights to the infinite amount of economic rights. In the same essay, I pointed out:
At a fundamental level, all these negative conditions spring from our uncontrollable pursuit of “happiness”; they spring from a world engulfed in rights without responsibilities. There is no short cut. Only the full assumption of responsibilities will set the world aright. Much discernment does indeed suggest that only the performance of four economic rights and responsibilities will gradually set our mutual social, economic, and political relationships aright. We must switch our attention from many expressions of wishful thinking to the reality of what can and must be done. This is the only way for the moral leadership of our country to gain the allegiance of MAGA People, the people who have forever switched their allegiance from the hard right to the hard left – and consistently been deceived.
Four Economic Rights and Responsibilities
- First, money. Money is not created out of thin air. Money is created out of our national credit, our creditworthiness. Since we individually create the value of our national credit, we are individually fully entitled to access it as we need it, on the basis of loans, loans to create real wealth; loans obtained at cost. Our responsibility is to repay the loans.
- Land. We are not angels. We need access to land and natural resources to be productive – indeed, to be anywhere or do anything. We have the responsibility to pay taxes on the land and natural resources on which we have exclusive control. Latifundia exist because some people pay no land taxes; let everyone pay the appropriate amount of land taxes and latifundia will be dissolved; land and natural resources will gradually become available to all who need them – at fair price.
- Labor. We must acquire ownership of all the wealth we create; if we work for corporations, we must have a fair share of the value of capital appreciation that we create. Employee Stock Ownership Plans (ESOPs) are ideal legal instruments to achieve this goal. Needless to say, we have the responsibility to earn our compensation.
- Capital. Corporations should be free to grow as large as they internally, organically can. They should be prohibited from acquiring other corporations through mergers and acquisitions. This form of growth is tantamount to industrial murder.
To learn about the subtleties of these four economic rights and responsibilities, forget Keynes, forget Hayek. Do study four giant American thinkers: Benjamin Franklin, Henry George, Louis O. Kelso, and Louis D. Brandeis.
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