The first word in “free enterprise” is “free” — how economic fallacies are deployed to frustrate human liberty.

In a comment to my post on the NAR’s most recent attempts to rape the taxpayers, Michael Cook set forth a number of subtle economic fallacies. I am not picking on Michael. He is simply repeating Marxist propaganda that is ubiquitous, more’s the pity. But I thought it were well to take these claims apart, to illustrate how these kinds of fallacious arguments are used to frustrate human liberty. I’m taking this to a separate post because the comments thread on the original post is already wildly off topic.

So: Start here, quoting from Michael’s comment:

The very capitalist machine everyone here loves was bolstered by the use of slaves.

This is simply false, not alone simply by definition. The first word in “free enterprise” is “free.” Transactions in a free economy are always mutually-voluntary. If someone is being coerced, what is occurring is a crime, not an honest trade. Every modern economy we can speak of is in some way a form of socialism — a criminal conspiracy harnessing the power of the state to advantage certain people at the expense of the others. Slavery is of a piece with this pattern, although it predates modern economies by many millennia. Moreover, it was the free enterprise that was suffered to exist under modern Rotarian Socialist governments that finally rid the civilized world of chattel slavery. To be fair, this miracle was effected not by a moral awakening but simply because slavery is a lot less efficient than is investing wisely in fixed and human capital. In any case, slavery and free enterprise are mutually-exclusive phenomena.

History is wrought with takings back to the Egyptians, Roman and Greeks.

The same fallacious argument repeated, only this time with respect to land and portable wealth. Theft happens, but theft is not wealth creation. Consumable portable wealth quite literally turns into shit in no time. Mineral wealth and baubles can retain their exchange value, but these are static values. It is not possible to cultivate stolen gold or rubies. And stolen land or livestock is only productive of future wealth by means of intelligent husbandry.

Neither of these crimes — coercion or expropriation — have anything to do with free enterprise, but there is another error here as well, an imputation that crime somehow pays. This is almost always false, and the premise has nothing to do with the economic miracles we associate with free enterprise, in any case. Every bit of wealth that matters in our everyday lives is a product of human capital — assiduous thought and effort. You can steal the products of other people’s past thinking, but you cannot steal their minds, nor their future thinking, nor the even greater wealth that may result from that future thinking.

Both of Michael’s first two claims originate in the criminal’s fallacy: By stealing the other guy’s stuff, I will possess his wealth. Really what the thief hopes to steal are his victim’s genius and character — not his things but the mental and moral resources from which those things were created. This is a very funny idea, and it would be a lot funnier if it had not been deployed by Marxists to exterminate at least 160 million innocent people, while enslaving billions more. In truth, all human wealth is the manifestation of human capital, which, because the mind is exclusively internally controlled, cannot ever be stolen.

Here’s an example that has nothing to do with money: You can steal a great painting and slap your name on it. In doing so, you might reap effusive praise from the gullible. But you will never be the person who created that work of art, nor, by having stolen it, will you have transformed yourself into a great artist. The source of human wealth can never be stolen, and so it is absurd to claim, first, that free enterprise consists of crime and, second, that crime is somehow productive of future wealth.

There is one plausible exception to the argument I just made: If like the English colonials who raped Africa and India, you invest the proceeds of your theft in wealth-producing enterprises, you may earn future wealth. That’s true, but it’s not terribly interesting. It’s simply a conflation of two unlike things: The theft was evil, even if the investment might have proved to have been wise, but the two are radically different activities. The original investment capital came from expropriation, but the subsequent growth of that wealth was the consequence of human thought — almost always someone else’s thought. One can invest and profit without having stolen anything, but any wealth you might have stolen will not grow in value without being invested. They are not the same things.

You can see the same phenomena at work in the frontier American experience. The Kabuki dance of land acquisition in North America worked like this: Torment any nearby Native Americans until they respond violently, then run to the Cavalry to insist that the land you plan to occupy must be pacified. Thus was territory after territory captured by the U.S. Cavalry. The argument that we like to make to ourselves is that this land was stolen, but that’s a claim that only makes sense if we insist that that land was being husbanded, which, in most cases, it was not. This does not mean that the means by which it was acquired was morally righteous — it wasn’t. But it does mean that the wealth that accrued to the pioneers from the husbandry of that land did not originate in its having been stolen, but, rather, in its having been cultivated. The pioneers were Rotarian Socialists, just like their cousins on Wall Street, but the incredible wealth both sides of the family created resulted from assiduous thought and hard work, not from theft.

The two together, craven theft followed by sound investment, can be found here and there in human history, and it is plausible to me that the perfection of this twisted theory owes to the Romans — the conquering general who retires to his conquered latifundium. But theft, the proceeds of theft and the investment returns on the proceeds of theft don’t matter very much in a free enterprise economy. The great wealth by which you are surrounded is the product of human genius, not of theft. Henry Ford could not have stolen the assembly line, nor Jonas Salk the polio vaccine. The Mormon pioneers were more than unusually peaceable in their interactions with the Utes, but the dry-farming techniques they invented in Utah were the basis of the Green Revolution that permitted the massive population explosion in the poorest parts of the world in the twentieth century. Some land Mormons bought, some they may have stolen. But the unprecedented wealth they produced from their new farming technologies, in Utah and in arid climates all over the world, was the product of their thinking, not of any thefts.

The Marxian focus on theft is useful to Marxists — since Marxism is a criminal conspiracy disguised as a philosophy of charity. But, contra Marx, wealth is not static, and it does not grow as a consequence of having been stolen. The growth of human wealth is caused solely by growth in human knowledge, and the West — loosely defined — is rich because people in the West have been largely free to improve their minds and to profit by and to retain and reinvest the profits of having improved their minds.

Which leads us to this:

[Y]ou are participating in a taking with every illegitimate debt payment we receive from a country we colonized or extorted.

There is more than one error here. The first premise is that any compound-interest value of the invested proceeds of stolen labor or property is owed to the expropriated parties. That’s a colorable claim, but a judge with a calculator might figure the interest value of the debt at the rate of growth that could be anticipated at the time and place the wealth was stolen, rather than in the economy where the proceeds were invested. Either way, the argument doesn’t get much traction, inasmuch as virtually all thieves are wastrels — investing nothing and dying in squalor.

The second premise is that past crimes can somehow be redeemed. In virtually all cases, this is not possible. Both the offenders and the offended parties are dead.

Which leads to the third premise, that the consequences of the past crimes of dead people must be visited upon the living. This is identity politics: Because I am part Cherokee, I am entitled to compensation for crimes committed against my ancestors. Even better, I’m also descended from Celts, so I’m owed my share of the Gold of Tolosa. The name for this vile injustice is “the sins of the father.” We would have no problem identifying the error were I to be brought up on trial for any scalps taken by Tecumseh.

But that example perfectly illustrates the fourth invalid premise packed into Michael’s argument: Certain past crimes committed against politically-favored identity groups constitute a sort of post-modern doctrine of Original Sin. Because I am a beneficiary of all of the wealth that has ensued from the correct and appropriate uses of the human mind, I have incurred an unchosen and inescapable debt to all of the victims of pandemic thoughtlessness, all over the world. My ancestors owned slaves — as did everyone else’s ancestors — but because I can be induced by propaganda to feel guilty about my wealth, I am to be forevermore enslaved. This is incredibly vicious and wrong — even as it is a testament to the clever crafting of Marxist propaganda that it takes such an effort to illustrate the injustice of this bizarre notion.

Take note: I was born free in a still-relatively-free country. Surely some part of my wealth originated in past crimes, but I did not commit those crimes, and I am not responsible for them. I owe money every which way, but only to people who — perhaps to their regret — freely volunteered to lend it to me. I am very sorry that many, many dead people were badly hurt while they were alive, but I did not injure any of them. I am guilty of nothing, and I will not permit anyone to accuse me of any crime, ever. As thoughtful people here will have noticed, I am the enemy of all crime, including violations they had never thought of as being crimes prior to coming into contact with me.

But all that notwithstanding, whatever portion of my wealth might owe to the compound-interest value of past crimes, this is nothing in comparison to the share of my wealth that has accrued to me in consequence of the past thought — and the compound-interest value and the compound-thought value — of honest free-traders. Wealth is created by thought, not theft, and thought cannot be stolen. I am massively rich, even from the depths of my debts, because very smart people traded their best thinking for the best thinking of other very smart people. I repay those people to the extent that I can — most of them are dead — by bringing my best thinking to the marketplace as well. As an example, I am providing readers here, gratis, the schooling in economics, politics, ethics, epistemology and metaphysics they were denied in twelve or more years of so-called education.

All of which takes us to Michael’s final claim:

[Free enterprise] will not meet the needs of the 2 Billion plus people concerned about simply finding enough food today in this world.

To the contrary, free enterprise is precisely what those people need. They are poor for no other reason than that they are not permitted by their thug governments to profit from the use of their minds. They lack defined and enforceable rights to the land they live on — itself stolen dozens or even hundreds of times in the past, incidentally. And they are denied the right to benefit from and reinvest the proceeds of their thought and effort. In every case, where a tribalist or socialist society adopts true free enterprise, a so-called “economic miracle” ensues. Don’t believe me? Take it up with our customer service rep in Mumbai. We call these societal transformations “miracles” because we have twisted our minds in impossible contortions so that we might insist to ourselves that the free, mutually-voluntary exchange of the products of genius does not produce wealth, but theft somehow does.

Take a look at that premise again:

[Free enterprise] will not meet the needs of the 2 Billion plus people concerned about simply finding enough food today in this world.

How can you redistribute wealth to people who are starving — because their local thugs want them to starve — if it has not first been created? If free enterprise — the wealth created by the unfettered human mind — were not the only source of of our incredible abundance, there would be no wealth to be redistributed to the victims of thuggery. No one needs defensible property rights more than the man who has barely enough property to stay alive — and no one can profit more, proportionately, by the intelligent husbandry of that property. But consumable wealth turns into shit overnight. The poor people who are to be fed but not freed are beneficiaries of free enterprise — one meal at a time. If would be kinder, by far, to free them to produce their own wealth — and, as the steady liberation of the economy of India illustrates, we would all be richer as a result. But it is absurd to say that free enterprise will not meet their needs. Any redistributed wealth they might be receiving originates in the abundant surpluses issuing from free enterprise.

Please note, as always, that I am talking about secondary consequences of human freedom. Human beings are free as a matter of ontology — no matter how much you might wish you could enslave them. If you stay out of their way, they will create vast wealth for themselves and for everyone around them. And not just pecuniary wealth, mind you. Everything we know of philosophy, art, science and love emerges solely from the free human mind. But if you insist instead upon obstructing their path, you will succeed not only in confiscating their wealth — almost always turning it into shit — you will have erected systemic barriers to the future creation of wealth. The mind cannot be stolen, and the future — and perhaps frustrated — products of the human mind cannot be stolen.

Poverty is the consequence of criminal philosophies — doctrines, like Marxism, cleverly devised to disguise their kleptocratic premises. Wealth is solely the consequence of the free exercise of the human mind. If you want to cure the world of poverty, you must foreswear crime and engage with other people only by mutually-voluntary trade — free enterprise. And it doesn’t really matter how much richer you or they come to be as a result of your interaction. What matters is that you will be acting in accordance with the true, inescapable, unchangeable nature of human beings. Amazingly enough, as a matter of reliably repeatable existential praxis, acting with respect to other people as they actually are — and not as your twisted theory insists that they must be — works out better for everyone.

Meanwhile, don’t ever let anyone make you feel guilty for your wealth. You are far richer than you could ever be on your own, no matter how much land or livestock or gold or jewels or human labor you might steal. But you earn your seat at this incalculable feast by the wealth that you yourself bring to it, the proceeds of your past thought and effort. Yes, you stand on the shoulders of giants. Don’t let your would-be despoilers guilt you into slouching or bowing or kneeling — or crawling. You are guilty of nothing — except perhaps the failure to think through all the many lies you have been told by camouflaged criminals.

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