The Absence Of Government Is Not What Makes Us Free

Just as nature abhors a vacuum, so too does order arise from disorder.

I am fascinated by the “all government is bad” people. I see them agitating for freedom and free markets and how the government that governs least governs best. I see them protesting against the big, bad government. But I think their anger is misplaced. I am not even sure they know who or what they are fighting against. They say the Leftists are bad news. Well, I have more bad news, and it’s not about the Leftists.

I’m still gnawing my way through another huge book by historian and economist, Michael Hudson. The book I’m reading now is called “Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy”. I’m about a third of the way through it and I must say, so far it's a long story of the struggle between people who want to receive the fruits of their labor and the people who would rather take those fruits from others while sitting on their ass. Of the latter, I refer to as “the rentier class”.

According to Hudson, one faction of the rentier class is interested in loaning money created from nothing to other people for the purchase of assets (like land), then seizing the assets upon default. They’re not so worried about repayment with interest as they are about how the loan is secured. Most banks operate on fractional reserve banking. For every dollar on deposit, they can create $9 to loan out and earn interest on it. They are not, for the most part, “loaning other people’s money”. They don’t really teach how to do this in high school or even in college unless you go to the right college.

The rentier class used to just be the people who owned the land and rented their land to others. Then the bankers figured out how to get the land by charging interest rates on loans that could not be supported by any reasonable economic conditions over the long term. The debtor defaults, the banks get the land, and repeats the process over again. Nowadays, not very many people actually pay off their mortgage on their home in their lifetime. Not anymore. How did we get here again?

There is government and there is business. Then there is the rest of us. Most of us are not that involved in government or business. We work for one or the other or we don’t work. We could be rich and not work (like the perpetually drunk guy in the movie Arthur) or we could be poor and not work (like most of the poor people you see David Blaine performing magic for in his movies).

As I look back on my life, I have become aware that all I really needed to do was pick something that I like to do, or that I’m good at, and practice turning that into a business while I was young. Most of the people we see in politics did that. The richest people in the world did that, too. They found the time and the resources to practice their trade but for the financial engineers, I’m not sure if you can call usury a trade.

To be fair, some of the richest people in the world invested in the means of production. Elon Musk comes to mind. Yes, he got lots of help from other wealthy people around him, but he rose to the top because he was focused on the means of production. That must be really confusing for people who short Tesla stock. Musk was not like the fatcats at GM, McDonald’s, and IBM who were borrowing money to buy back their stock to goose the price of the stock. Hudson has some harsh words to say about companies that are run like that.

If you’re buying back your stock to raise the price of your stock just to enhance your payday as CEO, you’re not investing in your future, or the means of production. You’re not investing in your employees. You’re not investing in R&D. Has anyone else noticed that the pretended revolutionary, President Trump, never ever said a word about the financial engineering that he quietly supported for much of his business life? We know now that his egregious 2017 tax cuts encourage the same financial engineering that made him a billionaire and then president of the United States. I hear that the District Attorney in Manhattan is about to get the documents that would show us just how much financial engineering Trump engaged in, himself. Notice that all of this is happening under the nose of the big bad government.

In a past occupation, I spent years learning about the Freedom of Information Act and the Privacy Act, and how to apply them with respect to retrieving public and private records from the Internal Revenue Service. I used to be one of those confused right-wing extremists. I have met people from the IRS and talked with them over the phone. I worked mostly with the disclosure officers of various branch offices. I learned first hand that they were just people who were doing their job. They got up every day to work in big government offices to collect taxes. They were just like us, but with different jobs. Like us, they just want to get along. They are not to be vilified as evil.

Looking back, it has become apparent to me that there are two forms of government: public and private. The public government, the one most of us are familiar with, is what we have been taught about in school. We elect representatives who write laws that the executive branch is supposed to carry out. Then the judicial branch interprets the law so that we may better avoid running afoul of that law. Most of us in our daily lives just follow the law because we really can’t afford a day in court.

Then there is a private government which we know of as “big business”. I note with interest the news of how people have lost their jobs for supporting or participating in the insurrection and for supporting Trump. Punishing those people is a matter for the courts to decide with due process. Firing someone over their politics is not something I want to see. That’s a part of the private government and that’s part of the reason I don’t talk politics at work. Your health insurance company can also be thought of as a private government. They can literally decide if you get to live or you die. The biggest employers in the world can be thought of as private governments. They have bureaucracies just as vast, slow and frustrating as the public governments do.

Present conditions give rise to an interesting question: How do you like your regulation? Public or private? Would you rather have your life run by wealthy, unelected bureaucrats who work in big business, aloof from your personal interests? Or would you rather have a say in the matter with your vote in November?

Let’s say you completely wiped out the federal government save for a few critical services like the military and the department of state, as former member of the House of Representatives Paul Ryan said he wanted to do. Big Business would quickly fill in the vacuum. They have the money and the resources to do it. It will be expensive for most of us because they can avoid taxation in ways that ordinary people can’t. They can fix prices, we can’t. They will ask for labor to be taxed even more, and a blank check for big business and the financial industry. Then you’d have less public government and more private government. There would be less of a check on their power. Maybe you could vote with your pocketbook and spend your money somewhere else, but given all the interlocking directorates and giant conglomerates, where else will you spend your money? Do you see where I’m going here?

This is why I think that conservatives have no idea what they’re fighting for. They actually believe that business interests align with their interests. Well, that might be so, but most CEOs still think their compensation is tied to their stock price, not the money in their customer’s pockets. So they’re working on goosing the price of their stock, not investing in the means of production required to raise our standard of living. It’s a zero-sum game to them. If you do not invest in the means of production, the stuff we want and need must be made…in China.

This is why I’m a progressive liberal. Socialism is not antithetical to capitalism. Socialists just prefer that banks invest in the means of production we can use to raise our standard of living rather than asset bubbles, loans for foreclosure, and stock buybacks. These were some of the problems that classical economists wanted to solve. They wanted people to be paid for what they could produce, not for what they could shave off the top without supervision by the people who created the value in the first place. They wanted the people to be able to earn the fruits of their labor. What passes for an economy here is really just a very subtle form of slavery.

I would much rather be governed by an elected representative who knows he could lose his seat by my vote than to be ruled by an unelected business bureaucrat working in the corner office on the top floor of a New York City high-rise building. I don’t believe that freedom is the absence of government because I know that some other form of governance will arise in place of formal government, and I’m not sure that I will have a seat at that table if it does. This is what I’m working for as a progressive liberal. I’m working for a seat at the table. I’m working to change the rules so that the people who create the value in our economy are paid fairly for it. I want the rules to encourage production, not usury or slavery. What are conservatives fighting for? I don’t know. Maybe something else.

Write on.

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