[An article from Free Life]

In Part One of this series on liberty and the social order, we explored some difficulties which discussions of this topic are likely to face. In this second part, we will move onto to exploring the complex issue of cultural compatibility in a free society.

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Any complex social phenomenon – whether it be law, money, the state, the nation, the family, or a given culture – is neither random nor does it appear by chance. Human beings are thinkers, choosers and actors. Our behaviour is not pre-determined in the same way that the sun rises in the morning and sets in the evening. Rather, we select a particular action from an array of available alternatives.

These choices, in turn, are influenced by ideas that motivate action in a particular direction – ideas that may concern either the boundaries of technical possibility or how we should form a particular world-view. The application of these ideas and values to the particular conditions with which we are confronted are the building blocks of a way of life – building blocks which are refined in the form of ethics, tastes, customs, conventions, art and institutions.

Thus, the precise reifications of any particular culture are a product of the unique economic conditions presented to a people by the opportunities, challenges, resources, climate and environment of their specific location, together with the choices they make in order to confront those conditions.[1]

Of course, cultural elements taken as a whole are scarcely the product of any one individual’s action. Moreover, every person alive today was born into an existing culture and an existing civilisation, the cumulative accomplishments of which predate and, seemingly, outweigh our mere, individual fripperies. Such circumstances can often induce the illusion that civilisation is mystical, its development the product of an unconscious, “evolutionary” force of nature. (For conservatives, such thinking can result in an uncompromising deference to “tradition”; for leftists and social reformers, civilisation is simply an object which can be taken for granted – even to the extent that it can be reshaped, remoulded or discarded at will without much ado). But the fact that each of us has to deal with our existing culture as a starting point does not invalidate the proposition that it is still, ultimately, the product of our choices and actions and, furthermore, of the choices and actions of people alive today.[2]

As a consequence of this, when different societies and communities emerged in different parts of the world, they would, as a result, have developed cultures, traditions, ethics and values different from those of other groups. Moreover, in this setting, owing to the limitations of travel and communication, it is possible for these cultural elements to be pretty much entirely coincidental with race and ancestry. In that instance, it would make sense to speak of concepts such as race and culture – and, concomitantly, societal cohesion – interchangeably.

Thus, to the extent that any of the differing cultures were incompatible with one another on account of contradictory and irreconcilable ideas and values, it would have been the case that peaceful co-existence in close proximity would be impossible and, moreover, for such impossibility to have been spoken about in terms of race. Moreover, such thinking is likely to be especially true if these societies fail to adopt an idea that is critical for the generation of peaceful, social co-operation: the primacy of the individual’s rights to his own person and property instead of a tendency to regard these things are mere tools for expropriation and/or devotion to some fictional “collective” purpose imposed by some individuals upon others.

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[First published on Free Life]

One of the positive indicators of our so-called economic recovery bandied about not only in the media but also by our monetary lords and masters at the head of central banks is the idea that rising prices are a sign of economic recovery. This mistaken belief is part of a wider myth that views the economy as little more than a giant number – a number which, if going up, means things are good and getting better, and if going down means the situation is bad and getting worse.

Theoretically the market price for any good is never “good” or “bad”; it is simply a function of the supply and demand for that good. The only way in which we can say that the market price is “good” is that both parties to a transaction are satisfied with that price and, thus, both have received an increase in welfare as a result.

That aside, however, surely economic progress is marked by an increasing abundance of goods and services – that more and more stuff is being produced for each hour of work? Therefore, if goods and services are increasing in supply then shouldn’t this lead to decreasing prices rather than increasing prices? If so, then increasing prices must indicate the opposite – a decreasing supply of goods relative to the money used to buy them and, consequently, greater impoverishment.

Contrary to the “wisdom” of so-called experts, such facts are intuitive – stop any number of strangers in the supermarket and they will almost certainly tell you that they want everything on the shelves to be cheaper, not more expensive. They will tell you also that they would be better off if they could buy more with the money they have in their pockets rather than less. Thus it is a travesty for economists and talking heads to call for even a “modest” degree of price inflation unless they are keen to promote destitution. Such inflation means that those of us with fixed incomes are forced to sit by and watch the purchasing power of our wages drop, unable to continue to afford to buy things because the “recovering” prices put them out of our reach.

The “recovery” of rising prices is just as ridiculous when it refers to rising asset prices rather than consumer prices. This kind of “recovery” has nothing to do with whether life is getting better for Joe and Jane Average. Rather, it means that there has been a localised recovery and improvement for a select group of people – those who borrowed cheap money heavily during the boom (mostly the politically connected big banks and investment houses) and ploughed it into stocks, bonds, property, etc. They can now breathe a sigh of relief as the prices of those assets once again begin to rise with the new round of monetary inflation.

In the UK this can be seen most clearly in the specific arena of house prices. Rising house prices are great for those who already own houses, boosting their wealth and allowing them to take out second mortgages or other equity release schemes to finance increased spending on their lifestyles. At some point, however, the prices rise so much that purchasing a property becomes an almost impossible expense for those who are not yet on the so-called “property ladder”. Government schemes to help “first time buyers” simply exacerbate the situation as they permit more money to chase the existing stock of housing.

A general economic recovery is not based upon rising consumer or asset prices buoyed up by paper money. It is created by a sound monetary order that allows entrepreneurs to allocate resources to where they are most urgently desired by consumers and to, slowly but surely, increase the economy’s accumulation of capital goods. The result should be a gradual secular price deflation as more and more goods are produced, meaning that the money in the hands of the lowest earners gradually increases in value. Consequently, everyone grows wealthier and more prosperous instead of just the super rich.

Together with other free marketeers, Austro-libertarians are adept at explaining the inefficient and destructive nature of the state. This compulsory aegis of taxation and redistribution destroys economic progress and the standard of living, siphoning off an increasing quantity of the fruits of our labour into vast bureaucracies. For our efforts, control and regulation of every aspect of our lives with a fine tooth-comb is all we can expect in return.

Such an enormous concentration of wealth and power could never be attained by a private individual (or even an institution) in a genuine free market. What’s more, the state seldom shies away from any opportunity to extend its destructive influence not only within its own territory, but also overseas with armies, navies, air forces and all of the destructive fire power they can carry.

To any one individual the state can seem like an awesome, overwhelming entity – if only because it professes to do so much for us.

In the UK, for instance, the government provides your with your banking infrastructure, your healthcare, your transportation networks, educates your children, and supposedly is the guardian of your health, safety and well-being from greedy, unscrupulous companies which might seek to defraud you. Moreover, should you get on the wrong side of the state, its uniformed police force can arrest you, its black robed judges can imprison you, and, of course, it promises to do the same to all of the people who attempt to commit a crime against you. And who could fail to be overwhelmed by the state’s vast, impressive edifices such as the Houses of Parliament or the US Capitol, together with their patriotic pageantries (such as Presidential inaugurations) which inspire a turnout of millions?

This article will in no way dispute the fact that the state is something to be feared. Indeed, one need only contemplate the fact that a handful of states are sitting on a nuclear arsenal sufficient to destroy the worlds tens of times over.

What we will explore here, however, is the fact that the monopolistic, overreaching nature of the state is both its source of power yet also its Achilles’ heel. That, far from being a lean, mean, fighting machine, the state more often acts in a bumbling, bloated and altogether rather stupid manner.

First, the state is severely handicapped by its very nature as a monopolistic force. Shorn of much need to compete in any areas in which it decides to wade, it is burdened by a natural tendency to languish in laziness and inefficiency to a degree which renders it extremely vulnerable. Britain’s NHS, for instance, suffers from repeated crises of chronic shortages and supposed underfunding year after year. This is in spite (or perhaps because) of the fact that it is the world’s fifth largest employer, with its pre-COVID spending consuming as much as 7 to 8% of Britain’s GDP.

Or take the highly cartelised commercial banking sector. In the UK, most salary and routine business payments are made through the BACS network, the infrastructure for which dates from the 1960s. In our age of instant communication, this system can still take three days to transfer funds between bank accounts. According to entrepreneur Simon Black (whose frustration with the service offered by established banks led him to establish his own), the Society for Worldwide Interbank Telecommunication (“SWIFT”) was using Windows Vista as its platform as late as 2017. By that time, Microsoft was no longer supporting the operating system. How is it possible for the world’s premier financial network to be using software more outdated than that available to any private individual on a recently purchased laptop or smartphone?

The answer, of course, is that these organisations are simply removed from any genuine competitive pressure to innovate or to stay ahead of the game. With a continued supply of tax dollars and/or the blessing of state privilege, they see no impetus to maintain the highest standards that would ensure their efficiency.

Such lack of standards spreads also to the quality of the personnel in these organisations. Bureaucrats – who are more or less promised a job for life so long as the avoid making a major mistake – have little incentive to develop their knowledge and skills. As such, they are unlikely to possess the drive of private entrepreneurs, who keep a sharper eye on the game. This is one reason why (in spite of all of the hullabaloo from politicians seeking election) tax and regulatory loopholes will always exist: the people finding and exploiting them have a keener motivation than those who are supposed to close them.

This is not to imply, of course, that politics is not a competitive arena. However, the nature of competition in politics is very different from the nature of competition in the free market.

In the latter, people are certainly competing, but the objective of that competition is to create more goods and services for the benefit of consumers. As such, market competition is positive sum – the more that is created, the more opportunities there are for everyone. What is gained by one person doesn’t come at the expense of anybody else.

It is true, of course, that some companies may prosper while others go bankrupt – and obviously there can only be one CEO of any particular company at a time. But even if one company should collapse, the process of wealth creation furnishes us with the wherewithal for new enterprises to be started - businesses which will exploit opportunities which are yet to be explored. In the free market, one door closed is two more opened.

Politics, however, is a zero-sum game. The power possessed by one individual is necessarily taken from another; money handed over to one set of beneficiaries has necessarily been taxed (i.e. confiscated) from another set. There can only be one President of the United States or one Prime Minister of Great Britain, and there is only so much landmass on the Earth from which to fashion powerful states. The process of politics will never create an unlimited number of opportunities to lead a great country.

The budding politician, therefore, must necessarily gain from what anyone else loses; in this eliminative game, he must ensure that no one else is able to beat him to the top job. Thus, politics is a poison for any genuine co-operation or betterment; ultimately, everyone is the enemy of everyone else. The only co-operation that does exist is in the transient form of favours, bribes or other “tit-for-tat” arrangements, with relationships susceptible to a sudden backstabbing by the more ruthlessly ambitious partner. With such a widespread lack of trust serving as the foundation for the state, it becomes impossible for it to operate as a fast, efficient and unified whole. In fact, private citizens can often be thankful for the feuds and foibles of the fiefdoms and factions craving state power; if they are so busy stamping on each other, they have little time left over for plundering everyone else.

Given that state power is inherently eliminative and unproductive, creating the wherewithal to exercise that power is - ironically - highly dependent upon a vibrant and efficient capitalist economy. The only reason we are now threatened with digital regimentation and surveillance is because our level of capital accumulation and technological advance has produced the complex goods that make these things possible. The warped commitment of our leaders leaders today is not only to the exertion of a greater degree of socialisation and control, but also to deindustrialisation and impoverishment in the name of greenery and “saving the planet”. But to press for these aims is to sign the death warrant of the infrastructure that enables systematised power and control. Without maintaining the extent and structure of the capital stock that feeds an efficient economy, there will be no internet, no smartphones, no CCTV, no facial recognition, no microchips, no nothing. The result of this is that people will have a greater ability to wrest themselves free of state power long before the only things left to enforce it are bows and arrows.

This leads us neatly onto to the state’s second major stumbling block: that statist intervention can never produce any positive achievements (or, at the very least, it can do so only with significantly inflated cost). All of the state’s declared aspirations – the conquest of poverty, affordable healthcare, employment for all, safety and security in retirement, the vanquishing of crime, and so on – are beyond the state’s reach for one, very simple reason: these things cannot be achieved through the means of wealth redistribution.

In fact, because there is no way in which the state can genuinely make a positive difference for the whole of society, the state can survive and thrive only by making problems worse rather than better. If society continues to experience degradation and destitution, the state can swoop in so as to declare itself the saviour. It is better for the state, for instance, for people to be kept poor so that they remain dependent upon government handouts. It is better for the state to disarm its citizenry so that the latter present no threat to the state’s own armed guards (but at the cost of increasing crime, resulting in bigger budgets for the state’s monopolised provision of law enforcement). It is better for the state if more people are sick so that increasing sacks of cash can be siphoned off into its wasteful, inefficient healthcare bureaucracies.

Unfortunately this perverse incentive is fed by the fact that many people see the state’s failings as a reason not for cutting the state down to size, but for lending it even more power.

One reason for this peculiarity is that – in our “mixed” economy dominated by publicly connected, but nominally private actors – the symptoms of state failure tend to be far removed from the state itself. As such, one has to follow a chain of cause and effect in order to identify the true culprit.

For instance, when the government inflates the money supply, prices are likely to rise. However, because it is businesses who actually implement any increase, all of the blame is heaped upon their alleged “greed” and “profiteering”. Similarly, if state mandated minimum wages result in unemployment, the only thing that the public can see is those same, evil businessmen refusing to lower their profits so as to hire more workers.

Much of this is also due to the fact that the advent of democracy has weakened the distinction between the state and the people – i.e. between “us” and “them”. Rather, through our voting rights, we believe that the government either belongs to us as our servant, or is an integral part of us as a nation. As such, any notion of the state harming its people amounts, effectively, to an accusation of self-destruction. Avoiding the cognitive dissonance of this conclusion simply causes most people to default to incorrect, but psychologically comfortable explanations for their woes.

Here, again, however lies another of the state’s weaknesses. As the growing backlash against globalisation and political gigantism has revealed, that crucial feeling of unity with (and control of) the state begins to dissolve if the state becomes too big and bloated. If decision making authority is delegated upwards to supranational institutions, people begin to withdraw their consent to be governed by foreign technocrats who seemingly have little interest in people’s priorities. In short, a clear perception of “us” and “them” re-emerges. A major motivation for the Brexit vote, for instance, was to repatriate decision making authority from Brussels, suggesting that the degree to which power can be removed from its proximity to the people is finite. Such a limit is serving to frustrate the unifying, globalising and bureaucratising ambitions of political elites.

Indeed, it is now unlikely that these ambitions will ever be fulfilled in their totality, in spite of the continued attempt to weaponise crises (such as COVID) in favour of greater centralised decision making. Given that smaller states and state entities are, all else being equal, weaker than larger ones, the impossibility of excessive centralisation suggests that there will always be an upper limit to the state’s power vis-à-vis its citizens.

This leads us onto our third and final major point which is that the state – or rather the people who can be said to form it – are a minority of the citizenry. As a parasitic entity, it is simply impossible for the state to be comprised of the majority. The vampires will always be outnumbered by those pumping the blood they crave.

Contrary to popular belief no state has ever retained power as a result of force alone; rather, the sustenance of state rule is dependent upon – at minimum – the tacit acceptance of the majority of the citizenry. Although the fear of force may certainly help the state to attain that tacit acceptance, the state only has enough resources to dispense actual force against a bare minority of rebels and upstarts. In order to ensure sustained, widespread compliance, the state has to ensure that its subjects are kept within the confines of a general degree of contentment – either materially, or, preferably, through the conviction that state rule is legitimate. In other words, even though people may mumble and groan about the state’s inadequacy in this, that or the other, they can find no reason for upsetting the apple cart.

The Brexit vote and, we might suggest, the election of Donald Trump are instances of when contentment with the status quo was exhausted in the minds of at least a significant proportion of the population. Although – as is now clear – the beneficiaries of that status quo are refusing to go down without a war, each of these instances shows that they cannot win every battle. Once the people decide to exert their preference for a particular direction with ferocity, then the state has no choice but to yield. Whichever plundering/pillaging/controlling/regimenting/surveillance plans that the state has in store for us ultimately cannot succeed without our compliance. Indeed, it was the elites’ frenzied reaction to both Brexit and Trump which demonstrated how truly scared they are of popular resistance.

The bumbling, bloated nature of the state is indicated by a joking phrase apparently made by the industrialist Charles F Kettering - “Thank God we don’t get as much government as we pay for”. Indeed, if all of the wealth and resources that the state commands were actually put to use effectively and efficiently, then it truly would be a terrifying, formidable obstacle.

Unfortunately, however, the state’s capacity for buffoonery leads also to what we might call, informally, the “cock up theory of history”. When certain key individuals are able to dispense a degree of power disproportionate to their abilities, it is not only the effects of their conscious decisions that become magnified – so too do their mistakes. So whereas statists would have us believe that great leaders and statesmen shape the world’s events for the benefit of humanity, we cannot overlook the fact that anything significant that has happened in history is, at least, equally attributable to accidents and mishaps. And it is with cock ups that the true danger of the state may lie.

One of the most infamous of these mistakes occurred in 1983 at the height of the Cold War when the Soviet nuclear early-warning system reported the launch of intercontinental ballistic missiles from the United States. The Soviet officer monitoring the system at the time, Stanislav Petrov, interpreted the warnings to be the result of a computer error – a belief which was verified by a subsequent inspection. Petrov’s refusal to act on the false warnings prevented a Soviet retaliatory attack which would have almost certainly elevated the Cold War into a full scale nuclear holocaust. In other words, the annihilation of human existence was averted by the prudential actions of a single individual who refused to trust his government issued equipment.

When the state today still handles so much (and handles it so very very badly) the possibility of such a mistake going the other way remains very high indeed – all the more so when East and West, once again, are running headlong towards nuclear tripwires. Given the exceedingly poor quality of our statesmen today, can we expect them to show the same kind of caution displayed by Colonel Petrov?

It is for this reason more than any other that the state should be regarded as dangerous. So much power in the hands of so few people is at risk of one them making a simple error. As awesome as the state may be, our fate may be in the hands of its stupidity as much as its evil ingenuity.

Browsing through a single day’s worth of articles on the libertarian website lewrockwell.com is enough to confront one with a smorgasbord of despair:

The website – amongst the best read of all libertarian websites in the world – is almost unique in its unfailing commitment to draw attention to many of these important aspects. But it is difficult to quell a swelling of pessimism when faced with this kind of line up.

Nevertheless, it is vital not to lose optimism in the face of such adversity. And while it may seem that the noose of retrogression into tyranny and oppression is tightening its stranglehold on the average citizen, there are several key reasons for us to remain optimistic.

The first is that – in spite of the increased efforts of censorship and “cancel culture” – it is far easier to disseminate alternative ideas and information today than it was just a generation ago. True enough, the dominance of “big tech” and traditional media outlets may mean that such ideas seldom come to the direct attention of the masses. But they can can be obtained within seconds from any corner of the globe by those who are prepared to look for them.

We must remember, of course, that technological development is not the be all and end all. After all, digitisation and instant communication in particular are in the process of being deployed in the service of regimentation and control as much as freedom. Moreover, a specific problem with the internet is that people can go looking for the answers they want rather than for the truth. Ultimately, whether technology is beneficial depends upon whether the people that use it are motivated towards good or towards ill.

Nevertheless, now that it is out of the bag, it is unlikely that the relative increase in the freedom of information will ever be brought entirely back under the thumb of the establishment/mainstream in quite the same way as it was before. Indeed, the very reason that the state and its big tech minions have had to resort to beavering efforts at censorship is because the truth is now something that they are struggling to keep a lid on. In fact, these efforts often have the opposite effect from that intended. For instance, anything debunked by a comical “fact checker” is fast becoming a marker for something that the state doesn’t want you to know.

The second and more important reason, however, is that – in spite of an accelerating cost of living crisis – we are still enjoying an extraordinarily high standard of living. In spite of the plunder and pillage of more than a century of marching statism, we are clearly not living in the Stone Age. Indeed, it is reasonable to characterise the relative descent of Western civilisation as being one into a state of “luxury barbarism” – cultural and spiritual depravity in a milieu of relative, material prosperity.

The achievement of this level of prosperity is unique in human history. Whereas pre-industrial generations could only accept their meagre lot in life, it is difficult to comprehend how this attitude could be repeated today. For the average Western citizen in 2022 lives far more luxuriantly than did a king of the Middle Ages. Not only is our time that of the PC, the iPhone, and other gadgets but also of such "humbler" wonders such as cars, refrigerators, supermarkets stacked full of food, clothes shops, and an almost endless array of products that can be bought from some outlet somewhere for a relatively modest (if now increasing) price. Critically, however, these items are not viewed as luxuries. Rather, they appear to us almost as a phenomenon of nature, a given. Indeed, the common suggestion that people should have “rights” to food, housing, healthcare, clean drinking water and so on is, however misguided, a demonstration of this attitude.

This standard of living requires the maintenance and growth of its underlying capital structure – all of the machines, tools and factories that are used to produce everything that we want to a buy at a high enough volume to make them affordable. As we know from "Austrian" economics, this structure can be produced and nurtured only under a regime of private property and free exchange. In spite of an assault from all sides, both practically and ideologically, it is because this order has remained relatively intact that its productive tendency has often been able to mask much of the statist rot. During the 1920s, for instance, productivity was so high that prices still managed to decline in the face of excessive increases of the money supply. And even today the fact that the world still holds together suggests that capitalism and freedom are, for the most part, still working as best as they can.

The upshot of this is that the elites’ room to manoeuvre in effecting grand, societal transformations towards some kind of different order may be altogether rather limited.

For one thing, it is doubtful that building and maintaining the infrastructure required to run their own digital gulag could be accomplished without leaving the productive capacity of the economy relatively intact.

Second, their own standards of living are now dependent on goods and services which, in turn, rely on a high degree of capital accumulation stretching back through many stages of production. Corporate jets aren’t assembled out of nowhere (Leonard Read’s I, Pencil shows how even the simplest of goods relies upon a fiendishly complex chain of production). It cannot simply be the case that they could achieve a transition to a more centrally controlled economy while guaranteeing that their own luxuries would remain easily available. Indeed, one of the reasons why socialism has always been born out of capitalism is because it is only when free individuals are able to become so productive that the state has a source of wealth for it to confiscate. Once that wealth runs out, even the state’s apparatchiks can become disillusioned with the system.

And finally, when people have become accustomed to living as they do, then it is difficult for the power hungry to tread a path that would severely diminish that standard of living. This does not mean to say that such a policy will be not be pursued, nor does it suggest that people will not clamour to the existing elites for “solutions”. But it is an extremely risky path to tread, not because people will necessarily storm the parliament buildings with pitchforks and torches, but because it makes people receptive to other ideas that could solve the problem. As such, the elite control over the narrative becomes vulnerable, particular if people are willing to search for other answers. Indeed, we have seen this happen twice already before the present crises even got going: with the vote for Brexit and the election of Donald Trump as US President.[1]

In fact, it is each of these events that likely led to elite panic, waking them up to the fact that they are not as in control as they thought they were. There is no reason why, as things get worse, these kinds of victory cannot be repeated. It may be the case that these elites have a stranglehold over the top echelons of government, industry and commerce so as to ossify the official business of public policy making. But in the long run, every regime, at any time and place, cannot survive without at least the passive acceptance of the majority of the population it claims to rule.

For this reason, therefore, I remain a relative, if cautious, optimist for the cause of freedom and prosperity in the long term. Cautious because, even though any plans for global socialism will not succeed in the long run, the attempt to make them work can cause a terrifying amount of damage in its own right. But I am optimistic in that the capitalistic structure of the Western world is still mostly all there, and that - fingers crossed - our "leaders" will be forced to abandon plans for any radical transformation long before any major collapse.

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Notes

[1] Such a search is not limited to alternative economic ideas. It is quite possible that the entirety of secular liberalism will be brought into question, prompting something of a religious or spiritual revival. Indeed, such a revival may be essential to secure a firmer foundation towards the rejuvenation of a freer world.