21 March 2011

Review of The Rise and Fall of Society by Frank Chodorov

This book is too important not to review. It's five-star anarcho-capitalist literature.

This book is so good, even the foreword, acknowledgement, and introduction blow you away. The first sentence blows you away: "It is hard to think of an age which, with less reason, has been more smugly self-satisfied than ours." Chodorov wrote this book in 1959! Chodorov laments the distortion and outright denial of truth in favor of self-worship of the State. Chodorov vows to defend the individual and natural law.

We move on to the acknowledgement, in which Chodorov explains that the purpose of the book is to continue the work that Albert Jay Nock started in Our Enemy, the State. In the introduction, Chodorov rages against the idea that the purpose of the individual is to play a role within the collective. Statism—the worship of political power—has become the religion of the modern day. The State and Society were once clearly distinguished, but they no longer are. Abraham Lincoln immortalized the connection with the phrase, "government of the people, by the people, for the people." In democracy, "freedom" comes from government.

And now we begin chapter one. The common thinking is that economics is a branch of political science. Economics is, indeed, a science. Politics is not; it is simply control over other people. History has demonstrated that every attempt by politicians to interfere with the laws of economics has failed. Yet, today's efforts by politicians to disobey the laws of economics are perhaps stronger than ever. The State always fails, because it overlooks the consequences of its actions. Every State in history has failed because it has increasingly attempted to interfere in the economy. The founders of America understood this fact, and they attempted to prevent its happening by writing the Constitution. Yet, this brilliant document has been interpreted into irrelevance. America will end up like Rome. When the parasitic State finally collapses the Society on which it depends, the State destroys itself.

Chapter two examines the origin of the State. In classic theory, the State came from God. Later, Hobbes theorized that the State arose as an authority to restrain humans from their "brutish" nature. Locke theorized that the State arose to protect private property. Rousseau theorized that the State arose to help overcome the difficulties of nature. Today's theorists automatically accept the State and focus on how to improve it. Chodorov, however, takes a historical approach. He argues that the State arose when herdsmen (raisers of livestock) attacked the desirable land owned by agricultural workers. Eventually, instead of merely killing the males, the herdsmen formed a master-slave relationship with them—the rulers and the ruled. The rulers exacted tribute from the ruled. From there, the herdsmen realized the importance of 'protecting' their people from other herdsmen. As time went on, the two classes interacted more and became a homogeneous culture, but the master-slave relationship continued.

Chapter three explains that it is the logical nature of an individual to pursue economics. Unlike other animals, a human is not content with mere food and shelter. A human has an infinite desire for happiness. A human uses reason to transform commodities in an effort to become happier. For example, a human may transform land and grow food on it rather than continuously search for food. A human is, by nature, a capitalist—a producer of capital. But, a human seeks to satisfy those infinite desires via the least amount of labor necessary (the law of parsimony). Technology constantly improves for this reason.

Chapter four explains that Society is a collection of individuals rather than a singular collective. Society has no attributes that we would attribute to an individual. It's a word. When individuals cooperate, they find that they can produce more than twice as much as would be produced by the individuals alone. Cooperation within a sufficiently large Society allows people to become specialists. A tailor, who finds it quite easy and enjoyable to make clothing, produces numerous high-quality shirts because the tailor expects to engage in voluntary economic exchange with the other people in the Society. But, it is not Society that produces anything; the individuals are the producers. The individuals work in order to satisfy their own desires—not for the benefit of Society.

Chapter five expands on the concept of the marketplace. The market is the heart of Society—where the specialists make exchanges. Value cannot be expressed with mathematical formulas. Value is subjective; it is determined by each individual. There is no data to give to a central planner that can predict future values. No one knows exactly what they will want in the future. A central planner will never succeed in telling individuals what they should want (e.g., drugs) or at what price a product should sell (e.g., gasoline). All that a central planner can do "successfully" is decrease an individual's production. A central planner robs a producer of money—the medium of exchange. The individual's pursuit of happiness is disrupted.

Chapter six explains that trade is an attempt by both parties involved to increase their happiness. The specialists trade their abundances for things that they believe will make them happier. And as trades occur all over the world, people exchange culture and ideas. The marketplace is the unifier of the world. Any act that disrupts a marketplace (e.g., a protectionist tariff) is an act of war. Whereas free trade brings people together, coercively restricting trade tears people apart. The most effective way to bring about global peace is to remove restrictions on trade.

Chapter seven discusses competition in the marketplace. In Society, there will likely be more than one weapon producer, for example. Competing producers are driven by the self-interest of profits to be skilled relative to the other competitors. A competitor who offers higher quality at a lower price can drive the inferior competitor out of business. The community will not show loyalty to an inferior product. Profits, therefore, are a measure of the skill of a producer to supply the demands of a Society. Everyone in a Society benefits from competition. If a hypothetical inferior producer used force in order to induce scarcity and create a coercive monopoly, however, only the inferior producer would benefit. Unfortunately, politics allows exactly this scenario to occur. For those who complain about big business against small business, Chodorov points out that the mass production of the big business is very inflexible. The small business can adapt and supply what the big business does not. Competition is always better than force. But a free-market Society has not yet existed, because of the State.

Chapter eight begins the examination of the State. Authority is the imposition of one's will on another person's will. It can be defensive (e.g., using a gun in self-defense), but authority always means the use or threat of force. The individual, however, usually does not desire to devote constant time and effort solely to the defense of their property. Other individuals feel the same way. And so, they form a 'government'—an entity that uses force to protect everyone's private property. Because of inevitable questions of proper ownership, government becomes a judge, as well. Government produces nothing; it is simply given a monopoly on coercion in order to prevent other community members from committing coercive acts. In a long discussion of property, Chodorov points out that producers don't produce for money but for the things that money will buy—what other people are producing. When a person is deprived of their property through coercive force, they are unable to exchange. The thief—who produces nothing—will also be unable to exchange when there is nothing left to steal. The producers, then, find their products underconsumed. With no one to exchange with (as a result of lack of property rather than lack of desire to exchange), the producers must stop producing. If theft is rampant, the Society must collapse, because mere spending doesn't stimulate output.

Chapter nine explains that after the State has stretched taxation to the limit, it borrows. And rather than repay its debt, the State monetizes it with inflation. (Again, this book was written more than 50 years ago.) The best that we can hope for from politicians is that they not interfere with the market. But, as production increases, they always interfere. They rob the producers. The more productive a Society is, the more the State's penchant for predation will increase. Because, as the law of parsimony states, humans seek to increase their happiness with the least amount of labor necessary. In a democracy, it is common for the criminal psychopaths of Society to be drawn to the positions in which they have control over other people.

Chapter ten opens with a discussion of the Judges of the Israelites. Before the arrival of the kings, the Judges were leaders rather than rulers; they did not hold coercive power. It was, instead, a position of social suasion. But the Israelites eventually demanded a king. Samuel attempted to warn them of the consequences: conscription, servitude, bureaucracy, confiscation, and taxation. But, it was a time of emergency, and the Israelities were willing to give up freedom (permanently) for the feeling of security. Fear led them to put blind faith in the State. And so, Saul became king, and the Israelites' troubles rapidly multiplied. And with the next king, David, the throne becomes divine, separated from 'ordinary' people. Solomon, then, consolidated power. There is no 'right person' to be in charge of the State, which is not an inanimate, impersonal institution. The State is one or more individuals. These seemingly divine individuals hold power over people by convincing them that the State provides necessary social services. In reality, the State robs the people for its own growth, protection, and deification.

Chapter eleven reiterates that the State is a coercive gang of people who falsely proclaim to provide 'social services.' A person who provides 'social services' is a person who devotes their time to satisfying human desires—a successful producer. The 'social services' provided by the State are chosen by the State rather than Society. The use of coercion entails that Society has no say in the matter. In the United States, first-class mail delivery is a 'social service' because the State has a coercive monopoly on it. In communism, the State is relied upon for all 'social services.' When the State provides these 'social services,' it does not care whether its income exceed its losses, because it can make up the difference with taxes. It has no incentive to perform well. Well-intentioned people believe control over water, sanitation, roads, education, and so on should belong to the State because everyone in the community benefits from those services. But any service could and would be done more efficiently if privatized. The State operates these services merely to make itself look useful while increasing its own power. It creates more opportunities to tax.

Chapter twelve slams the socialist notion that the State is the antidote for all evil. Socialists worship the State. Any supposed flaws in the State are because of those devilish capitalists. These reformers believe that one day the omnipotent, omniscient State will be realized, as long as the State's power is continuously increased. Individualistic thought must be crushed. The law must compel people to change their wicked ways. These fools succeed in increasing the State's power, but that is all. The Biblical story of Joseph and the Pharaoh is an example. Politicians adopt socialist ideas not because they truly believe in them but because they are so obviously beneficial to the State. The politicians create laws that benefit themselves. The bureaucrats ('civil servants') carry out the laws. The bureaucrats are well-paid by the State for assisting in the predation of Society. The bureaucrats are socialists. There have been many reforms (e.g., the income tax) in the history of the United States, and they all increased the State's power rather than achieving their intended purpose. There is a vast bureaucracy in the United States.

Chapter thirteen explains that political interference in the market is no different in consequences than a raid on the market by bandits. The difference is in supposed intent. The bandits do not pretend to be moral, whereas the State does. The people believe the State. If they did not, the State could not exist. Taxation causes shortages because production suffers. The argument that the State provides protection from other States is flawed. Does it particularly matter which State is robbing the people? They would be better off if they were not robbed at all. As discussed in chapter ten, giving up freedom for a sense of security is a foolish idea. The only tool in the State's kit is force. When the State interferes in the market, it excludes competition and creates shortages. Anything supposedly advantageous to Society (e.g., rent control, minimum wage, etc.) is, in fact, disadvantageous. Market mechanisms are self-operating. The State's laws cannot control human behavior.

Chapter fourteen declares that the State is always at war with Society, regardless of size. The State will always intervene in the market, and the State is always corrupt. Chodorov uses the example of the New York City subway, which was originally private. Because of political force, it was impossible to raise the price of fare. The city bought the subway at a price far higher than the open market offered. It became a bureaucrat-run monopoly. The fares rose, and taxpayers must make up the constant deficits. The State gained power. The politicians will utilize the popular socialist notion of 'soaking the rich' because the politicians know how beneficial it is to the State. The larger a Society becomes, the more distant the politicians become from the people. There is less and less social persuasion affecting the politician's actions. The purpose of centralization (see Abraham Lincoln) is to create protective distance between the State and Society. The US Constitution was a brilliant attempt to prevent centralization, but it failed. The Sixteenth Amendment was the death blow. Taxation is key to centralization.

Chapter fifteen attempts to solve the problem of State v Society. Chodorov wonders whether there is any solution at all, but suggests that human reason may provide the answer. Reason indicates that cooperation multiplies satisfactions. It is superior to self-sufficiency. But a human still dreams of getting something for nothing. When humans who make up 'government' are given a monopoly on the use of coercion (in order to protect production), they will naturally abuse this power and seek to get something for nothing. They cannot resist using their power to interfere in the market. They become the State. Chodorov suggests that the State is made in the image of humans, who dream of getting something for nothing. Humans are predatory. Social suasion, however, restrains this predation. Thus, Chodorov proposes accepting government at an extremely decentralized level. He repeats that the best that we can hope for out of politics is that it do its intended job of preventing disruption to production. Chodorov argues that as long as government is deprived of the ability to tax at will, it cannot transform into a powerful State.