Table
of Contents
1.
Introduction: Purpose of This Article
2. Rent
3. Profit
4.
Wages
5. Wage-Theft is Real
6. Interest on Capital
7.
Interest on Money
8. Usury and
the Currency Monopoly
9.
Usury = Rent x Profit x Interest
10.
Exclusive vs. Semi-Exclusive Rent Collection Privileges
11. Conclusion
12. Post-Script: Taxation and Monopolies
13. Links and Additional Reading
Content
1.
Introduction: Purpose of This Article
The
purpose of this article is to explain why rent, profit, and interest
– and why the ownership of land, labor, and capital – are the
results of laws and state-upheld monopolies.
Herein
I contend – as the anarchists, Mutualists, Georgists, Tuckerites,
and others have contended – that: 1) excess rent is the result of
monopolies on land and housing; 2) profit and wage-theft are results
of monopolies on labor; and 3) interest and usury are the results of
monopolies on capital, credit, currency, and money.
They
are the results of legally granted privileges to collect the various
forms of economic rent; i.e., rent
on land, profit off of labor, and interest off of capital (and loans,
and money).
I
have already explained, in my March 2019 article “Why Rent is
Theft: Against Economic Rents and Monopolies”, why this is so.
Readers wishing to better understand my thoughts on these related
topics can read that article for more information. The focus of the
article is to explain why “rent is theft” from the perspective of
some socialists, in addition to taxation being theft from the
perspective of the Libertarians.
For
those who don't plan on
reading that article, it will suffice to say that “rent is theft”
because economic rent is
theft. This is to say that rent, profit, and interest – which are
all forms of economic rent – are either stolen, or else otherwise
unjustly acquired, whether through semi-legal or extralegal means,
or, if in the absence
of law, then through violence, force, coercion, extortion, and
manipulation.
If
and when the state registers and recognizes the legal ownership of
all land, labor, and capital - and allows ownership of them only
through permission - then all land, labor, and capital which is
legally and legitimately owned, is owned only if and when the state
and its enforcers agree to protect those ownership titles.
In
the act of enforcing exclusive claims to land, labor, and capital,
those enforcers come to exercise some degree of the state's unique,
exclusive privilege to wield a credible monopoly on the legitimate
use of force within the territory. Thus, they exert the power
traditionally wielded by the state, both in custom, and in definition
(especially in the definition of the state which was developed and
popularized by sociologist Max Weber).
These
facts have prompted the anarchists, Mutualists (etc.)
to conclude that private property (inasmuch as it is protected by the
state, and/or by violence) cannot, and could not, exist, without the
threat of violence being levied against anyone and everyone who
These
facts, most importantly, have prompted the
anarchists and Mutualists (etc.)
to ask: “How could private property exist, then, without the state
to recognize it and protect it? In a stateless or consent-based
society, how could anyone wield monopoly over land (etc.)
when everyone else is absolutely free to question and challenge the
property claims of everybody else?
“And
with no ability to legally challenge property claims, and no ability
to legally challenge occupancy-and-use norms in state courts (i.e.,
because there
would be
no state courts), how could a property claimant continue to exclude
others from his property, without resorting to force? Without a legal
privilege to commit acts of violence in order to protect property
claims, how could ”
The
remainder of this article does not answer all
of those questions, but it should help to provide some foundation
questioning the legitimacy of ownership of labor, capital, and
currency (in addition to landed property). I ask that my readers try,
on their own, to ask the same questions of just ownership of labor,
capital, and money, which I have previously asked about how land can
be justly owned without the state.
Readers
seeking answers to the above mentioned questions, should read my
March 2019 article “Private Law and Anarchism: Is Privatization a
Solution to the State's Monopolies on Legal Services?”, and also
read the works of Murray Rothbard, Hans-Hermann Hoppe, Stefan
Molyneux, Walter Block, Roderick Long, etc..
Of
course, my answers will be much more critical of private property
than the answers provided by these thinkers, save for perhaps
Roderick Long. This is owing, in part, to the fact that I have spent
so much attention to the various manners in which the rights of
public and common actors (but not
state
actors) are unjustly ignored during the creation of most or all
private property.
2. Rent
Rent
is the return to land. Rent is levied upon, and extracted from,
buildings, and the land on which buildings sit. Landlords are granted
exclusive monopoly rights (really, privileges) to collect rent on the
lands which they own.
This
grant of privilege is performed by the state, through its unique (and
self-granted) power to recognize and register landed property claims.
The state registers landed property claims through apparati such as
county Recorders of Deeds' offices. Thus, the ownership of land,
under capitalists states, is not
retained according to the active protection of the owner; on the
contrary, it is a function of law, and of the force of the state.
Excess
rent
(that is, “super-rent”) is landlordism, plantation slavery, and
indentured servitude. Excess rent is therefore theft, if kept by the
landlord, not reinvested into the community and/or its markets, and
not reinvested into the tenants and their residences.
3.
Profit
Profit
is
the “return to management”. Profit is extracted from laborers,
who work either in buildings which rest upon the land, or work
directly upon the land (or even beneath it, as in mining operations).
Profit
is the “return to management” only because it is “returned”
to management from labor. This is to say that profit is stolen
wages, which are kept by management,
instead of being returned to the laborers.
Excess
profit
(that is, “super-profit”, “surplus profit”, or “excess
surplus value”; extra-Mehrwert
in Marx's and Engels's German) is the withholding of wages, benefits,
and improvements in conditions, by management, from labor.
Excess profit, stolen from labor and kept by management, is
therefore theft, when it is not reinvested into the community and/or
its markets, and not reinvested into workers.
This reinvestment should be done chiefly for the purpose of: 1)
improving the workers' benefits and conditions, including pay, and
safety and health conditions; 2) helping workers to own their own
tools, and to own shares of the means of their productivity and
livelihood; and 3) allowing workers a realistic chance of buying-out
the owner, and of creating a new (and, hopefully, self-managed, and
more egalitarian) franchise, of the original firm, or perhaps even an
entirely new company which has the full ability to freely compete
against the original firm.
4. Wages
Wages
are the return to labor. They are the return of compensation to the
laborer or worker, rather than to management.
All wages, not returned to the laborer, are possessed mainly by
either management, owners, or outside investors. Outside investors
have little or no stake in the firm's long-term success, and
management and owners have more stake but also a more realistic
chance of thriving financially if they leave the firm as compared to
workers.
Wages
are funds not reinvested into the firm in a way that directly
benefits workers and their families, and are “returned to”
managers, owners, and investors (whom cannot truthfully claim that
those funds are actually returned
to
them, because they never possessed nor earned those funds in the
first place). This is to say that all funds not
stolen
from workers and kept by others, and not reinvested into the
community and/or its markets, are excess profit (superprofit), not
wages.
But
those funds should
be wages, and they should
be returned – from
management, owners, and investors – to the workers, so that the
workers can spend those funds in the community and/or its markets.
Wages are earned income, appropriately distributed and allocated;
that is, wages are earned by workers, as compensation for performing
labor. The idea that the worker's labor, is done chiefly for the
benefit of himself and his family (and to a lesser extent, the
community and its markets in which they will be spending those
wages), stands in direct opposition to the notion that the laborer
works chiefly for the benefit of managers, owners, and investors.
Thus, the notion that labor entitles all that it produces, stands in
direct opposition to the practice of profiteering from labor.
5. Wage-Theft is Real
There
may be some argument that “wage theft” does not exist, because
while the laborer is a renter of capital, the capitalist is, just the
same, a renter of labor. This is to say that owners and managers
employ laborers, by “renting-out their hands” or renting-out
their time.
But
the capitalists' “rent” of workers' time, talent, and physical
effort, is never fully paid, and it never can be. That's because
managers never compensate workers for the opportunity costs, and
other indirect costs, which the workers bear before and outside
employment.
This
is to say that few firms compensate new hires for all
of the costs they undertook while seeking employment; few firms allow
new hires to deduct, as work expenses, costs like the identification
documents, clothing, sanitary items, paper and ink, printing costs,
postage stamps, phone calls, and bus tickets, which they buy in order
to apply for jobs and travel to job interviews.
This
occurs because, evidently, managers and owners feel that those costs
are the workers' problems, and have nothing to do with the everyday
operation of the firms, and
especially nothing to
do with the owners. But they could not be more wrong. A new hire –
especially one who struggled for a long time before finally finding
employment – will often spend months
and months, even
years,
paying off debts and budgetary deficiencies created by those
expenses.
And
the more a worker is thinking about where his next meal will come
from, where he will sleep next, how his family will make ends meet,
and what will happen if he gets sick or injured on the job, the less
productive the worker (and, in turn, the firm) becomes. And thus, the
less profitable it becomes to “rent” workers.
So,
in many ways, labor is not getting the full return from its effort,
and wage-theft is real. Unless you believe that a worker is supposed
to only earn as much
as is necessary to keep him working another day, with nothing left
over to develop himself, either through skills or education, even if
he becomes more productive because of it.
That
increased production will only cause him to become self-sustaining,
and independent; and thus less dependent upon others for what he
needs to survive. Thus, increased self-management of workers, is not
in the interest of managers because it puts them out of a job, and is
not in the interest of owners because it makes workers less dependent
upon owners, and more reliant upon themselves.
6.
Interest on Capital
Interest
is the return to capital. Interest is extracted from capital
investments, loans, and currency or money (which are not the same
thing).
Capitalists
– that is, capital investors, lenders (and, less importantly for
the purposes of this section, owners of labor, i.e.,
employers) – are
granted exclusive monopoly rights to collect interest upon those
loans and capital investments.
Capitalists'
ownership of those loans and capital investments, are secured through
the state's legal recognition of the contracts which capitalists
make. These include contracts wherein: 1) capitalists agree to employ
laborers; and wherein 2) capitalists agree to rent and occupy
buildings and/or land owned by others, and pay rent to those owners
(and/or fees or taxes to state
owners of land and
buildings) for the privilege of occupying some of those lands and
developments.
Additionally,
the continued ownership of capital assets, is secured (and
securitized) to the owner – on either a temporary or permanent
basis - through the state's power to grant L.L.C. status. L.L.C. grants allow owners of firms, and individual workers within them, to become both financially and legally irresponsible for their criminal actions. This is done through distributing and deferring the risk of financial culpability for lawsuits involving the firm.
That these practices are acceptable, rests upon the premise of the “right of
increase”, i.e., the
right to acquire unlimited profits from investments, in perpetuity,
forever. Most
terrifyingly, the “right of increase” ethos now embodies itself
in the pretended right of multinational corporations to sue
national governments
for passing laws which “limit their right to profit”, even when
those laws are passed in order to protect workers, civilians, plant
resources, and the ecology from being exploited by those firms.
These
capital investments, and loans, are further secured to their owners
with the help of the state, through the various forms of wage-theft
(and deprivation of improvements of benefits and conditions) which
make workers more dependent upon loans, and upon employment by
capitalists chiefly for the benefit of other people, than they
otherwise would be (if they were independent, self-employed owners of
their own means of production).
7.
Interest on Money
Leaving
aside the issues of interest on capital investments, interest on
physical capital, and loans to entities besides treasuries, and
focusing only on interest on loans and currency (i.e.,
financial capital):
For
all intents and purposes, interest functions as a form of debt,
when it is built-into
currencies. Through inflation – whether accidental, or as a result
of intentional “quantitative easing” of the monetary supply
through the issuance of newly minted currencies – currency is
imbued with interest, and with some measure of debt.
The
presence of this debt, causes the value of the currency issued, to be
constantly decreasing. When done intentionally, the intent is that
depletion of the value of the currency will lead its possessor to
spend it earlier, and/or more quickly, than he otherwise would. This
assures a prompt return to all those who invest in currency (i.e.,
bond-holders).
8.
Usury and the Currency Monopoly
Excess
interest (that is,
“super-interest”) is usury. Usury exists because of the
exploitation of the demand for money, in order to increase the value
of monetary assets already possessed by owners of money and currency.
That
the demand for money and currency is being exploited – and, at
that, officially
– should be obvious. Currency - which is not itself money, nor
value, but a representation
of value and money, and to some extent a representation of work –
is created by the state. Through the state's self-granting of the
legal privilege to designate an official currency, and to coin moneys
and regulate their values, few transactions can be made without the
use of the state currency to mediate the exchange.
Thus,
the state is able to cite these privileges – and also the supposed need to
levy taxes upon potentially all transactions – in order to
monopolize the creation and issuance of currency. This increases
public demand for money and currency – that is, state-issued
moneys and currencies – in order to perform most any and all of the
tasks necessary to survive (i.e.,
labor, trading, etc.).
If
there were no monopolistic state to choose an official currency,
regulate its value, and compel us to pay taxes on as many
transactions as the state wants us to, then it would be difficult for
most of us to imagine how useful such a medium of exchange could be
for a free people.
That's
because free people would, more likely, use the value of labor, and
human need, as more important indicators of the value of the
compensation that someone is offering in exchange for work or items.
Free people would not accept a currency with debt (that is, interest)
built into it, unless they understood why, and under what
circumstances, that debt is helpful (i.e.,
when that debt causes
currency to be returned to a publicly-held issuer of currency or
credit).
Excess
interest (i.e., usury)
is bankerism, capital misallocation, and pernicious predatory
lending. Excess interest is theft, whenever interest (and debt, and
excess monetary value) are kept by the lender or the investor of
capital.
Whenever
lenders do not allow borrowers to pay some of what they owe into a
security reimbursement fund, for emergency purposes - and whenever
the returns from investment and lending are not reinvested into the
market and/or community, and into making loans available for those
same borrowers as well as others – then a theft has occurred.
This
is no less “theft” simply because it does not appear violent on
its surface. The dependence of the borrower upon the lender, only
exists without challenge, when the lender is free to change the terms
of the lending contract at will, without review by the lender. Each
the state's recognition of the legitimacy of the contract while it
changes, and lack
of transparency into the justice of contracts on the part of
community agencies or voluntary associations, can lead to borrowers
being dependent upon lenders.
And,
of course, in the presence of the state and its official currency,
few transactions (loans included) can be conducted without the
state's approval, without using the state's official tool of
oppression (i.e., its
currency), and without paying taxes upon those transactions (in
that official
currency).
9.
Usury = Rent x Profit x Interest
While
in the previous several sections, I have used the word “usury” to
denote “excessive interest” (especially on capital and loans),
usury possesses characteristics unique among the various types of
economic rent. As such, “excessive interest” alone, does not
constitute usury at its fullest and most pernicious extent.
While
interest on capital and loans is popularly referred to as “usury”
when it is excessive, excessive interest on currency
is a different animal altogether. That's because currency
– the medium of exchange through which loans and capital
investments are made – possesses characteristics more strongly
associated with rent
and profit
than with interest.
Meme created by the author on November 30th, 2017;
first published here on May 22nd, 2019
Think
about it: the act of profiting off of the state issuance of official
currency, results in misappropriation (that is, theft) of all
three major types of economic rent:
1) interest; 2) rent; and 3) profit.
First
(and most obviously): profiting from currency results in excessive
interest, because the debt which inflation imbues in our currency,
results in pernicious levels of interest, because of the artificial,
state-created, unnaturally high demand for acceptable media of
exchange.
Second
(and second most obviously): profiting from currency results in
excessive profit,
through profiteering from the lending of that currency, and for the
same purposes just described, pertaining to interest.
Third
(and least obvious of all): profiting from currency results in
excessive rent,
because in a way, users of currency (as well as those who borrow in
official currency) are paying a rent
on the currency they possess and use. This rent is levied upon
bearers and users of currency, through – you guessed it – the
imbuing of the currency with debt (caused by inflation).
To summarize, to reap usury on money is to profit off of the rental of money at interest. It is to take maximum advantage possible of the artificial need for money; artificial, because it is compelled by the state, through the state's granting of a legal monopoly on currency to itself.
Thus,
usury is that most destructive and deadly of economic rents, because
it is the best example of an economic rent, and the best example of
how economic rents overlap and become almost indistinguishable.
Especially when a monopoly currency, and monopolies on financial
capital, are combined with a system wherein land, labor, and physical
capital are owned according to the recognition and dictates of the
state.
If
the above is an accurate assessment, then it may perhaps be fair to
conclude that we must measure – and
multiply together – all three
economic rents (rent, profit, and interest), if we desire to come up
with accurate measurements of the degree of “usury” (in its
fullest sense) existing within an economic system.
10.
Exclusive vs.
Semi-Exclusive Rent Collection Privileges, and a Note on Emergency Funds
If
what I have said above, and also what the anarchists say on these
topics, is correct, then in state-capitalist and protectionistic
economies (forms of economic governance which feature monopolies
heavily), to claim property ownership, and to get it recognized in a
manner which is monopolistic, monolithic, unquestionable,
unchallengeable, and final,
requires a lot.
It
requires either: 1) the state and its violence to uphold the claim
and keep people out; 2) the use of violence, to do the same, without
the use of the state; or else 3) 100% approval by the remainder of
society, that a person deserves and earned what he claims as his
property.
Furthermore,
to claim ownership (in these economies) entails making a claim to an
exclusive and
exclusionary right (or
privilege) to access and make use of certain lands, buildings, or
other assets (even including, unfortunately, other people's labor).
The
tangible outcome of the practice of exclusive and exclusionary
private property ownership, is that people are met with violence, for
attempting to “squat” on a property (“engage in adverse
possession”, in fancier terms), even if they pose no threat of
physical harm to the property's claimant(s).
But
must we suffer this? Can
we suffer this?
Absolutely not.
We
cannot survive much longer if, every time we try to use one of what
we thought were
our own possessions, we are obligated to pay that possession's actual
owner (from whom we
are merely borrowing, renting, or accessing and using the things
which we possess but don't own). We cannot survive much longer, if we
are not allowed to fully own any of the things that we use every day;
if we have to pay and ask permission every time we want to use one of
“our own” possessions.
Although,
in a sense, for everyone
to be able to fully own their possessions, constitutes universal,
ubiquitous ownership
of private property; this would not grant those owners “private
property” in the same sense in which the anarchists, Marxists
(etc.)
have traditionally conceived of private property.
This
is to say that private property owned for the sake of owning
and using, is
fundamentally different in purpose, from private property owned
solely for the sake of
producing more value therefrom.
For everyone to own property - and for everyone to be able to acquire
it through their own efforts and defense - would not
result in depending upon others to acquire property; for precisely
the reason that if everyone had property, nobody would have to please
anyone else (through paying or begging) in order to acquire property.
I
do not wish to give the impression, through this essay, that all
forms of rent, profit, and interest, result from perfectly
exclusive ownership of
property, nor from grants of total
rights to exclude others from accessing property.
The
returns of rent, profit, and interest, are,
however, certainly,
greatly increased, the more exclusive, exclusionary, and monopolistic
that ownership gets. For example, if a renter has no realistic
opportunity to buy his residence from his landlord, then the renter
will pay rent for a much longer period of time than he otherwise
would.
Likewise,
if a laborer has no realistic opportunity to own his tools and a
share of the company, and no opportunity to buy-out his company and
start a new franchise, then the laborer will end up working for a
much longer period of time than he otherwise would. And, to repeat,
if a borrower has no chance of recouping any sort of emergency funds
paid to the lender, because the lender kept them, then the borrower
will end up owing the lender for a much longer period of time than he
otherwise would.
This
means that – through trust, mutual obligations, and a mutual desire
for all parties involved to be prosperous and eventually own property
– it is possible
to lessen the exploitative effects caused by legal recognition of
ownership titles to land, labor, and capital.
Such exploitative effects could additionally be lessened through increasing the prevalence, and variety of form, of emergency security disbursement funds - for not only the lender/borrower relationship, but for the landlord/tenant and employer/worker relationships as well. Security deposits on housing rent could be paid into a fund which is held in a neutral territory, which landlord or renter may only access upon absolute verification and agreement that the landlord's and/or tenant's expenses justify the expenditure of part or all of the security deposit. Such funds would be subject to total transparency, and this could be done with the help of blockchain technology, or through any number of practices involving multiple forms of verification.
Setting up more worker-managed firms, or allowing communities to offer tax incentives to businesses in order to transition their model of private ownership into a collective one - for example, E.L.M.F.s (Egalitarian Labor-Managed Firms), or W.S.D.E.s (Workers Self-Directed Enterprise) - will also help increase the number of firms that have funds set up for their employees in emergency situations.
Additional solutions to the lack of emergency funds of all of these borrowers, may be found through firms offering E.S.O.P.s (Employee Stock Ownership Plans). U.S. Senators Bernie Sanders and Kristin Gillibrand have supported proposals requiring the establishment of E.S.O.P.s in large companies. Sanders has additionally called for corporations to seat workers on their boards.
Proposed and adopted programs similar to E.S.O.P.s and so-called "funds socialism" include: 1) the Meidner Plan in Sweden, calling for the establishment of "wage-earner funds"; 2) the American Solidarity Fund, proposed by the People's Policy Project; 3) the Norwegian G.P.F.G. (Government Pension Fund Global); 4) the U.K. Labour Party's proposed "Inclusive Ownership Funds"; and 5) the NSW Generation Fund in New South Wales, Australia.
More solutions may be found through modifying Disaster Relief Emergency Grants, retainer fees, or emergency corporate legal funds and insurance plans, to something which is mutually acceptable to all parties to contracts involving financial trust.
Emergency funds - whether accessible by all parties to a contract, or to none - should be set up for all borrowers. They should be set up for people who borrow land, labor, and capital alike. That's because the people of the proletariat, lacking land and capital, sell their labor. They own nothing else, and thus have nothing else to sell. It should not be ignored, that, in selling their labor, they are selling the last thing they have, and thus have nothing else, save for what little compensation they receive from work. The security of that compensation should, at the very least, be transparent to the worker.
What I am recommending, in general, is diminution and lessening of the
monopolistic, exclusive, and exclusionary characteristics of property
ownership. Thus, monopolist property owners would be turned into
oligopolists.
The
propertyless become property owners, and the monopolists become
oligopolists, at the very moment when renters, borrowers, and workers
begin to receive sufficient amounts of exclusive property (and
sufficient rights
to that property) as compensation. That is, as compensation in
exchange for the efforts they put into their relationships of
financial trust with landlords, lenders, and employers.
Once
the privateers of the bourgeoisie (that is, the government,
landlords, land speculators, lenders of physical and financial
capital, and employers of labor) come to wield oligopolies
on possession, instead of outright monopolies
on ownership, then
renters, borrowers, and workers (i.e.,
the proletariat) can
increase their “market-share” of possessed assets, and increase
its value relative to the value possessed by those who desire to be
monopolists.
Thus,
through increasing their market-share of property, and the degree of
their control over their property, the proletariat can lessen the
degree of their exploitation, and lessen the monopolists' degree of
control over their property claims; and in so doing, they make it
easier for workers to work for shorter periods of time, in order to
acquire their own slices of property.
But
– again – for proletarians to own such property, can only be
rightfully described as the result of violence, if no
constraints whatsoever
are placed upon the owner's (landlord, boss, lender, etc.)
ability to exclude others; upon the owner's ability to unfairly estop
people from fulfilling their obligations (i.e.,
by buying the
residence, buying the workplace, repaying loans, etc.).
If
those constraints exist, then the property is
not fully private, because
the exclusivity is not total, and, in effect, not fully exercised.
And those constraints, by the way, do not even need need not be
imposed by the state, but can be accepted as a matter of mutually
beneficial contract; between the owners, and the workers and their
associations.
Finally,
I must add that, to turn monopolists into oligopolists, would, by no
means, result in universal property ownership by
itself.
It
is not enough to resign ourselves to allowing “property ownership”
to increase, simply by allowing current owners sub-contract and
sub-let all their properties out to others. This is not ownership,
but renting-out what's already being rented. It is rent
upon rent; that is,
compound rent. Creating hundreds of shell corporations within
one-another, while the original firm gets all the profit - or
sub-letting-out smaller and smaller portions of a residence, while
the tenant is increasingly boxed-in – don't have anything to do
with either anarchism, or
a just conception of property rights that desires for all people the
realistic potential to become owners.
What
is necessary – in addition to the practical opportunity to acquire
property without either the hindrance or assistance of a state – is
for workers to struggle.
Not
suffer,
mind you, but struggle. Not work
too hard, nor work
their fingers to the bone, nor work themselves half to death. By
“struggle”, I mean that workers – after they are freed from the
legal constraints
placed on their ability to acquire property justly – must also
free themselves
from the economic and
social constraints
which hinder them from acquiring property.
What,
exactly, it means to “free oneself from economic and social
constraints on acquiring property justly”, is beyond the scope of
this essay, so I will allow my readers to form their own ideas about
what this means, and how it could be achieved.
11. Conclusion
I
hope I have made it clear, in the above, why I believe that rent,
profit, interest, and usury all
result, and thrive,
due to monopolistic as
well as oligopolistic
ownership of property.
Additionally,
due to monopolistic and oligopolistic control
of property rights;
for example, through hiring privatized security forces to protect
property claims, and through hiring lobbyists who petition the
government for property laws which are favorable to people who
already own property.
If
it weren't for the state, and its self-granted privilege to recognize
exclusive title to land, then monopolies on labor and capital (which
rest on
that monopolized land) would not exist. It is because of the state's
self-granted privilege – to recognize the monopoly privileges of
all of its other favored marketplace actors – that other monopolies
exist.
If
not for the state's recognition of the privilege of the owner to
exclude, the privilege of the landlord to evict, the privilege of the
boss to fire, and the privilege of the lender to collect – the vast
majority of these privileges being completely unchecked by any agency
other than those of the state – then people would acquire property
and find work according to their
own efforts, and
according to what all parties to a contract believe is a fair (not
just adequate) amount of compensation, in a manner which is
beneficial to the mutual long-term
interests of all parties involved.
Finally,
it behooves me to note that the above mentioned problems, are
precisely why
the state cannot be trusted to perform either its antitrust or its
anti-usury functions. Because, as I have stated so many times in the
past, the state creates
monopolies, and thus cannot be trusted to do away with them. The
state creates
currencies, and all but compels people to use them (when they'd
rather use money,
which is backed by real value, unlike currency), and thus no other
currency has a chance to compete against the state's “money
monopoly”.
Granted,
firms which generate profit should be taxed at a higher rate than
those which reinvest all would-be profits or generate no profit at all. [Note: This is to say that non-profit, cooperative, and egalitarian firms should not be taxed, provided that they don't receive any privileges to wield exclusive monopolies.] Moreover,
firms which do not
generate profit,
should probably not pay taxes at
all. But the only
reason they should be taxed, is because the funds being taxed away
were “earned” (acquired) thanks to the assistance of the state's
monopoly powers.
The
reason,
however, to tax those profits, should
not be construed to
imply that the state
should collect those taxes. Granted, the state is the only entity
which we perceive of as capable
of collecting all those taxes in the first place (at least right
now). But being theoretically
capable
of performing this task, does not make it morally deserving of the
task, nor does it guarantee that the government will collect as much
taxes as it intends to, nor that it will collect solely those taxes
which are duly imposed for the privilege of financially benefiting
off of the state's monopoly protections (which can even include
extorting funds from taxpayers in order to provide privileges,
subsidies, and bailouts for firms that are supposedly “struggling”).
What
will be necessary - and appropriate, and moral - for the collection
of taxes upon the funds gained from wielding monopoly privileges,
will be for a non-monopolistic, or less monopolistic, form of
economic governance, to emerge. The monopolistic nature of the state,
just like the monopolistic nature of exclusive and exclusionary
property rights, can be lessened. This can be done through
decentralization, localization, and strict delineation of spheres of
policy influence across the various levels of government. One example
would be for community associations to levy taxes on profits, rather
than for the state or federal government to do it.
Readers
desiring to know more about my ideas about how our government could
be made “less statist” (which is to say, less monopolistic), can
read my July 2013 article “On Max Weber's Definition of the State”.
All
legal and economic monopolies must be destroyed.
We
will destroy monopolies by making them into oligopolies, and
gradually into polyopolies. The final form of our economy should be a
polyopoly-polyopsony, a state of many sellers, many buyers.
Without
legal titles, any de
facto, monopoly which
is perceived of as “natural” (except for land, the monopoly on
which is natural,
at least in a limited, local sense) will not last as a monopoly for
very long, given the total freedom of all others to enter into
competition with it, and to challenge its right to exclude. (Note: Land would likely prove to be the easiest monopoly to abolish, because of the vast amount of it which exists; however, many people have yet to be convinced of this fact. Once land proves abundant, then the cost of mixing labor and capital upon the land will plummet.)
Without the state, people would have the unlimited right to challenge a company's privilege to “exclude” some people; especially if it forcibly includes them
at the same time.
Firms with significant financial privileges and/or legal immunities often exclude
workers and customers from benefiting sufficiently from the company, while at the
same time compelling them (as well as taxpayers), to pay the company
through taxes (due to the privileges, subsidies, and bailouts for which those taxes pay). Thus, the taxpayers, workers, clients, and consumers have little to no recourse with which to
free themselves from this benefit-free obligation, save for hiring a
lobbyist to change the law, so as to allow them to fully boycott the
company, by removing all of those privileges and favors which help keep the company afloat.
However,
the anarchists, of course, would object to such lobbying, and rightfully so, since lobbying
the state to change its laws, requires the legitimized use of
violence. Unless, however, if in the process the state ceases becoming a state
as we know it - like by shedding all
of its monopolistic
aspects and abdicating all
of its power to rule
and enforce with finality - then a change in the law is just what we need. Especially if only those contracts and agreements which are both mutually beneficial and voluntary, come to be accepted.
Only by establishing “O&U norms”
(that is, occupancy-and-use norms) can we avoid depending upon the
state, and its legitimized violence, for a resolution to our property
disputes.
It's
time to say “R.I.P.” (“rest in peace”) to “R.I.P.” (rent,
interest and profit). And, with them, usury, the most complex and
pernicious form of economic rent and excess return.
12. Post-Script: Taxation and Monopolies
While I have explained at length
why monopolies deserve to be taxed, and alluded to an answer as to
whom ought to tax them, I have yet to explain the issues of whether taxation is a monopoly, and whether taxation
has to be done in a monopolistic fashion.
I believe that taxation is currently a virtual monopoly, at least in the United States. I say this because federal government expenditures constitute about 25% of the G.D.P., while state and local government expenditures constitute 15%, while other expenditures constitute the remaining 60%. Since 1789, the federal government has certainly demonstrated its ability to suck whole sectors of the economy into its legislative purview. And with it, a much higher percentage of the economy is taxed-away by the federal government; both in comparison to state and local governments, and in comparison to the level of taxation which Americans enjoyed 100 years ago.
Having the state and local governments spend more than the federal government - or, to put it a better way, having the
federal government spend
less than
state and local governments - will help reduce the federal government's monopoly over the legislative and judicial functions related to taxation, and thus enable state and local governments to take-over any federal functions which they can handle.
[Note: The
executive function of taxation, has already been sub-contracted-out to our employers, whom are obliged to collect taxes from our paychecks. What would our country be like if those taxes were retained in a mutually accessible fund, or would only be paid to the government on April 15th
if both employers and workers agreed that the government had done a good job the previous year? It simply cannot be, that we "can't afford" to have a basic level of financial transparency in all transactions; it should be
financial transparency which dictates what is affordable, rather than the amount of wealth thought possessed.]
Because the only morally just goal of taxation (in my opinion) is for the purpose of
diminishing the influence of monopolies, taxation
cannot and should not be performed by a single institution, nor by any agency affiliated with the state (which I contend is an intrinsically monopolistic institution).
As I explained earlier, if community associations were to levy taxes, instead of the state or federal government, then it would be a less monopolistic way of doing things. Other agencies which could perform the task of taxation in a stateless society, aside from the most local governments possible, which would also lead to the diminution of the monopolistic enforcement and characteristics of taxation, could include:
1) voluntary associations;
2) Georgist C.L.T.s (Community Land Trusts);
3) mutual public banks; and
4) private (though non-state-affiliated) security agencies (and other types of firms) which charge dues based on one's ability to pay, or based on the value of the property being protected (such as the libertarian activists who protected portions of Detroit, Michigan following the 2007-08 financial crisis).
But more importantly than one's ability to pay, however, is the issue of
to what degree one's wealth was acquired because they helped the state extort people in exchange for land, labor, and capital.
Taxation does not have to be performed by an agency wielding any monopoly powers, nor even privileges to make any decisions bearing any sort of finality whatsoever. Decentralized governments, and non-state-affiliated nonprofit organizations can levy taxes.
Community Land Trusts can be set up, which levy "taxes" (although Georgists call them dues and fees) in a decentralized manner, for the benefit of the community. But that community need not exist with territorial limitations, however; if nobody can be stopped from joining, and nobody can be excluded, without unanimous or consensus-based agreement of just cause, then the community is not a state, because it is neither monopolistic, exclusive, nor exclusionary.
Additionally, it is possible to fund an entire government solely through charitable contributions, without punishing people for refusing to pay (save for social ostracism). We know this from the experiences of the Jewish people who lived in the Holy Land (
i.e., Israel-Palestine) in the 1930s and 1940s; they set up charitable funds which were spent on building Israeli government buildings and bringing the land back to life.
Any tax which a person can be convinced to pay, is voluntary (unless he is tricked or defrauded, or otherwise unjustly deprived of the freedom to choose other viable forms of taxation). Any tax which is agreeable to all people, is voluntary. Taxation systems based on voluntary payment of dues (for as long as one wishes to receive benefits), and fee-for-service models, could
and should replace compulsory taxation.
I mean, we have to do
something. People should not get shot to death on their front lawns for refusing to pay their taxes. Harsh punishments for tax evasion are only warranted if the tax is just and unanimous,
and people enthusiastically sign up to be shot if they refuse to pay. Only the very insane, and the very suicidal, would do such a thing. Or, perhaps, the very confident.
Finally, I would be remiss if I neglected to mention the following: While it is very good to tax monopolies, governments would have no need to do so, if they did not create those monopolies in the first place.
And a government which consciously reduces the monopolistic characteristics of
all of its functions - legislative, executive,
and judicial functions - is less likely to have enough power to create imbue firms with monopolistic privileges and rights to exclude.
13. Links and Additional Reading
As
promised, I will hereafter include links to additional readings about
the topics of why most monopolies are state-created; as well as how
to tax profits without the state (as solutions have been offered by
left-anarchists and right-anarchists).
Articles
about the taxation of monopolies, written by various authors:
- website about Georgist student Ralph Borsodi (look for the
articles about Community Land
Trusts):
- Joe Kopsick's “Why Rent is Theft”, criticizing economic rents
(rent, profit, and
interest):
Based
on notes taken in April 2019, and May 19th,
2019
Written
on May 21st
and 22nd,
2019
Edited and Expanded on May 27th and 31st, 2019
Edited on October 30th, 2019
First image created in May 2019
and re-created on September 8th, 2021
and added on September 8th, 2021
Originally Published on May 22nd, 2019
Author's Post-Script written on May 22nd, 2019
Additional Links Added on May 31st, 2019
