Saturday, May 31, 2014

Reading is Easy, but Writing is Not

Reading and writing are like eating food. If you read the same kind of food for a long period of time, you get sick of it. You are looking for a different taste. Likewise, if you read the same genre, your mind also get tired of it.

This month of May, after I stopped writing about Ludwig von Mises' Bureaucracy, I lost the appetite to write; I actually do not know what to write, but I like to continually read. But the problem with reading lots of materials without writing about it is similar to eating lots of food without work and exercise. It's all input without output. That's dangerous to your health. I experienced that during my undergraduate when I devoured the complete works of Francis Schaeffer for less than five days. I did not sleep that time beginning from eight o'clock in the evening until ten o'clock in the morning. It's good that it did not happen again, for if it did, I think I would not reach my age.

Now I am slower. In fact, too slow. I am satisfied reading even at least 200 pages in a month, provided that I will be able to write about what I am reading. The second goal is difficult to maintain. 

I must change if I want to accomplish something. Self is the most difficult to discipline. Regardless of the difficulty, I will embark in this self-challenge. 

While praying, these thoughts are running in my mind. I must read and write variety of subjects, and these are the ones I selected:

  • First, I must continue reading and writing about Austrian and libertarian books with priority emphasis on the works of Ludwig von Mises.
  • Second, I must restart reading and writing about authors whose books are related to the sovereignty of the Triune God both in creation and providence, covenant theology, the three uses of the law, eschatology of victory, and Cornelius Van Til's presuppositional apologetics. Gary North first comes to my mind.
  • Third, I must read and write about materials from Third Millennium Ministries beginning with Dr. Richard Pratt's The Primeval History as part of my preparation for family and church ministry.
  • Fourth, I also must read and write about Philippine economy and related subjects. The blogs of my libertarian friends are a good resource to provide me basic information about the country. The subjects that caught my attention include Freedom of Information Bill, Anti-Political Dynasty Bill, and Greco Belgica. 
  • And finally, I should start now with my book project, Money and Liberty. I aim to finish this in three years, on or before my fiftieth birthday.

So far this is my schedule. For now, I have to return to Bureaucracy.

Tuesday, May 20, 2014

The Forgotten Man: Poverty is the Best Policy


Mark Hendrickson of Forbes wrote in November 2013 that William Graham Sumner was a Forgotten Man that reminds us of the "Forgotten Man," the responsible and productive workers and taxpayers. Perhaps, one of the reasons for this forgetfulness was the distortion of the application of the phrase. William C. Mullendore wrote in 1951 that the phrase was wrongly applied to the exact opposite class of people. Progressives corrupted the phrase to divert people's attention to collectivist ideas (pp. 5-6). And it was Franklin Delano Roosevelt himself who popularized this perversion in his 1932 speech when he applied the phrase to the "poor" rather than to the industrious and responsible taxpayers. 


William Graham Sumner wrote a book, "What Social Classes Owe to Each Other". It was first published in 1883 and was printed for the seventh time by Caxton Printers Ltd. in 1974. Understanding its content will give light to the idea of "class struggle," which has been popularly promoted especially in times of widening economic inequality. In the Introduction we read that the problem of economic inequality must be solved or else, violent revolution will be the inevitable result. As naively believed, this is a threat to the wealthy. They must solve this problem to prevent ""bloodshed and destruction" (p. 9). It is their duty to make everybody "equally well off" (ibid.). If not, they will be "brought down to the same misery as others" (ibid.). 


Individual responsibility on the part of less fortunate is almost ignored in current discussion. It is fashionable today to sentimentalize poverty to solicit support for public welfare. The first topic in Sumner's book best describes the existing trend, "On a New Philosophy: That Poverty is the Best Policy."

Sumner describes the above policy as "a new maxim for judicious living" (p. 22). And the substance of the policy is this: "If you get wealth, you will have to support other people; if you do not get wealth, it will be the duty of other people to support you" (ibid.). 


Almost everyone is willing to support this policy. "Pro-poor" sermons, essays, and orations are widespread. Churches are expected "to collect capital from the rich and spend it for the poor" (p. 16). "Clergymen, economists, and social philosophers have a technical and professional duty to devise schemes for 'helping the poor' " (ibid.).


In an era that "pro-poor policy" is sensationalized, to be rich is shameful. It is almost synonymous to a thief. This is at least true as far as the mindset of "humanitarians, philanthropists, and reformers" (p. 20) is concerned. We can see this the way they exaggerate their observation. "They find enough which is sad and unpromising in the condition of many members of society," "they see wealth and poverty side by side," and "they note great inequality of social position and social chances" (ibid.). They exaggerate the miseries and the qualities of the less fortunate, and invent new concepts to advance their perceived remedies. Their inventions include "new theories of property, distorting rights and perpetuating injustice" (p. 21). This is the inescapable outcome in a society that only emphasizes the interest of one group at the expense of "the interests of all other groups" (ibid.). In this kind of society, Sumner has concluded "that it must be quite disreputable to be respectable, quite dishonest to own property, quite unjust to go one's own way and earn one's own living, and that the only really admirable person was the good-for-nothing" (ibid.). 


Confusion is the primary cause for the popularity of the foregoing perception, confusion as to the identity of the poor and the nature of the proposed solution. As Sumner indicated in the Forgotten Man, the way politicians and social planners use the term "poor" is difficult to determine. They do not mean those who cannot earn for a living. Instead, it "is an elastic term, under which any number of social fallacies may be hidden" (p. 19). One therefore must be wary whenever you encounter the word "poor" in the speeches and publications of those who promote public welfare.

The second confusion is the failure to distinguish the difference between voluntary charity and legislative charity. The first one is valid and legitimate. The second one involves force and coercion, and leads to economic loss. 


Ending this topic, Sumner identifies two kind of societies - a society based on status and a society based on contract. A society based on status, which is an attempt to revive the feudalist system promotes the poverty policy in a subtle way. Freedom and social progress are only possible under a society based on contract (Gary North in his essay "The Rule of Law and the Free Market" identifies that "the concept of biblical covenant between God and man undergirds the right of private contract," Authority and Dominion: Economic Commentary on Exodus Volume 5, 2012, p. 1347). Notice how Sumner describes a society based on contract: 
"A society based on contract is a society of free and independent men, who form ties without favor or obligation, and co-operate without cringing or intrigue. A society based on contract, therefore, gives the utmost room and chance for individual development, and for all the self-reliance and dignity of a free man. That a society of free men, co-operating under contract, is by far the strongest society which has ever yet existed; that no such society has ever yet developed the full measure of strength of which it is capable; and that the only social improvements which are now conceivable lie in the direction of more complete realization of a society of free men united by contract, are points which cannot be controverted" (p. 24). 

Source: Sumner, W. G. 1974. What Social Classes Owe to Each Other. Idaho: Caxton Printers Ltd.

Sunday, May 18, 2014

The Forgotten Man

Understanding an old lecture such as the Forgotten Man is so important in an age when most people find it difficult to distinguish between erroneous and solid economic ideas. William Graham Sumner aims to expose "one of the most subtle and widespread social fallacies" (p. 465). This is because the Forgotten Man is the unseen victim in all clamors for social reform. In this article, I want to divide my topic into four parts to help you understand the misery of the Forgotten Man: preliminary considerations, situations where the Forgotten Man has been totally ignored, his identity, and suggestions to relieve his burden. 

Two Preliminary Considerations

1. Selfishness and greed

As to selfishness, greed, and the like, Sumner clearly identifies that these are not only exclusive among the powerful and wealthy class, but afflict all classes of men. He considers the popular proposal as nonsense that liberty consists only in taking power away from the "bourgeois" and giving it to the "proletariat" and that "the latter will never abuse it!" (p. 470). The truth is according to Sumner, selfishness, greed, lust, envy, and the like "are constant vices of human nature" (ibid.). He explains their existence among men that goes beyond social class, location, and time: 
"They are not confined to classes or to nations or particular ages of the world. They present themselves in the palace, in the parliament, in the academy, in the church, in the workshop, and in the hovel. They appear in autocracies, theocracies, aristocracies, democracies, and ochlocracies all alike. They change their masks somewhat from age to age and from one form of society to another" (ibid.). And so abuse will certainly occur even if power is taken from the upper class and transfered to the lower class. That is why "checks and quarantees" are necessary safeguard for liberty and rights to be protected "against all abuses, as well from proletarians as from generals, aristocrats, and ecclesiastics" (ibid.). 
2. Liberty and rights

On the other hand, about liberty and rights, Sumner believes that the primary reason for the suffering of the Forgotten Man is caused by the absence of true liberty due to the widespread influence of wrong notion of liberty and rights. He narrates that historically the concept of both liberty and rights has "been constantly changing" (p. 472) from one generation to another. The popular notion of liberty is "that a man may do as he has a mind to" (ibid.). Such liberty does not exist in this world, Says Sumner, for if it is, "the human race would be condemned to everlasting anarchy and war as these erratic wills crossed and clashed against each other" (p. 473). For Sumner, civil liberty is "the status of the man who is guaranteed by law and civil institutions the exclusive employment of all his own powers for his own welfare" (p. 472). It consists "in the equilibrium of rights and duties, producing peace, order, and harmony" (ibid.). In relation to rights, this concept of liberty teaches that "a man's right to take power and wealth out of the social product is measured by the energy and wisdom which he has contributed to the social effort" (ibid.). In connection to democratic procedures, Sumner believes that liberty "does not consist in majority rule or in universal suffrage or in elective systems at all. He thinks that these procedures "are good or better just in the degree in which they secure liberty" (p. 473). 

However, very few men and women entertain this ideal concept of liberty. The wrong notion of liberty is so popular and closely connected to a wrong notion of rights, the idea that man is born into this world with naturally inherited rights. Sumner describes this as a "dream" for this "would mean that there was something in this world which we got for nothing" (p. 473). The truth is he says, "We are born into no right whatever but what has an equivalent and corresponding duty right alongside of it" and that "There is no such thing on this earth as something for nothing" (ibid.). He argues, "Whatever we inherit of wealth, knowledge, or institutions from the past has been paid for by the labor and sacrifice of preceding generations. . ." (ibid.). 

After long journey, mankind has now reached "the regime of liberty and equality before the law" (p. 474). Under this regime, free contract is primary and sentiment has no place "in trade or politics as public interests" (ibid.). Sentiment should be confined in private decisions and should not be allowed to dominate public discussion concerning public good for if it is, "it always produces mischief" (p. 475) that harms our Forgotten Man.

Having presented the two preliminary considerations, we are now prepared to enter into the discussion how the Forgotten Man remains invisible to public eye.

Eight Different Cases

William Graham Sumners mentions at least eight different cases where the Forgotten Man has been neglected in public discussion: 

First, humanitarians and philanthropists neglect the Forgotten Man whenever they talk about helping the "poor" and the "weak". Helping the poor and the weak is a favorite social propaganda especially by politicans and social planners. The problem with this propaganda is the difficulty to determine the exact meaning of the terms "the poor" and "the weak". Obviously, paupers, those who cannot earn for a living are poor and those who are "incapacitated by vice or by physical infirmity" are weak. Sumners agree that poor and weak of this kind "are an inevitable charge on society" (p. 475). But the way politicians and social planners use these terms are difficult to determine. Usually, says Sumner they refer to "the shiftless, the imprudent, the negligent, the impractical, the inefficient, the idle, the intemperate, the extravagant, and the vicious" (ibid.). The problem with this latter kind is that their troubles "are constantly forced upon public attention, as if they and their interests deserved especial consideration, and a great portion of all organized and unorganized effort for the common welfare consists in attempts to relieve these classes of people" (ibid.). 

Sumner does not recommend that the stronger and wiser members of society will not help the mentioned classes of poor and weak. He recognizes its proper place not as a public policy, but as part of voluntary, private, and personal intitiative. What he wants to emphasize is "the thing which is overlooked and the error which is made in all these charitable efforts" (ibid.). And what is that? It is the notion "that if you help the inefficient and vicious you may gain something for society or you may not, but that you lose nothing" (ibid.) Sumners considers it a big mistake due to his view of capital. In his mind, a capital that is used to support the poor and weak is actually "diverted from some other employment, and that means from somebody else" (ibid.). Sumner argues, "Capital is force" and when it goes to one direction, it cannot go to another. In concrete terms, "If you give a loaf to a pauper you cannot give the same loaf to a laborer" (p. 476). Here we can see how the Forgotten man has been ignored for this is the "other man who would have got" that capital if not for that "charitable sentiment which bestowed it on a worthless member of society" (ibid.). See how Sumner further explains this blindness: 
"The philanthropists and humanitarians have their minds all full of the wretched and miserable whose case appeals to compassion, attacks the sympathies, takes possession of the imagination, and excites the emotions. They push on towards the quickest and easiest remedies and they forget the real victim" (p. 476).
This blindness is supported by "hundreds of articles," "sermons and speeches" that glorify the weak and poor. Society is consistently bombarded with messages as if the weakness of the weak and the poverty of the poor is the fault of the stronger members of society. Those who are personally responsible are burdened to care for those who failed to fulfill their duties. It is mistakenly assumed that it is the rich who are paying for the expenses of the poor. In fact, it is the productive sector of society who is penalized for the expenses of the unproductive. 

Second, the Forgotten Man is ignored whenever you hear and read of any public programs and policies that aim to improve the condition of the working class. This is because "nearly all the schemes for 'improving the condition of the working man involve an elevation of some working men at the expense of other working men" (p. 478).

Third, the Forgotten Man shoulders the financial burden without being noticed by the public whenever taxes are used "to support policemen and sheriffs and judicial officers, to protect people . . . against the results of their own folly, vice, and recklessness" (p. 479). "All the public expenditure to prevent vice has the same effect" (p. 480) says Sumner simply because common sense tells us that the government "cannot collect taxes from people who produce nothing and save nothing" (p. 479), but only from "those who have produced and saved" (ibid.). It is "the industrious workman going home from a hard day's work, whom you pass without noticing" that pays the public officers (p. 480). He is the Forgotten Man.

What is more grievous in using taxes to protect people from the consequences of their vices is that the "natural cure" is prevented to do its work "by the ruin and dissolution of their victims" (ibid.), but the penalty is not really removed. Instead, it "turned into police and court expenses" paid by the Forgotten Man.

Fourth, the Forgotten Man suffers when people favor state regulation thinking that they are serving the country. This holds true in "regulating the relations of employer and employee, or the sanitary regulations of dwellings, or the construction of factories, or the way to behave on Sunday, or what people ought not to eat or drink or smoke" (p. 481). Not many people are aware, says Sumner that "The whole system of government inspectors is corrupting to free institutions" (p. 482) and is "relieving negligent people of the consequences of their negligence and so leaving them to continue negligent without correction" (ibid.). And the big question is, who is the victim in imlementing this state regulation? The victim, says Sumner is the Forgotten Man who pays for the inspectors. 

Fifth, the Forgotten Man is penalized whenever you hear "arguments to prove that criminals have claims and rights against society" (p. 483). There are people in authority who believe that the badness of criminals is not their own fault, but the society. It is argued that criminals do not need punishment, but reform. To implement this, an expensive program for the reformation of criminals must be established. The fallacy here, says Sumner, is that society is a mixture of bad men and good men. Since the badness of bad men is not their own fault, it therefore follows that it is the fault of the good men. 

Sumner rejects the foregoing idea. He gives us an elaborate explanation of his view of a criminal:
"A criminal is a man who, instead of working with and for society, turns his efforts against the common welfare in some way or other. He disturbs order, violates harmony, invades the security and happiness of others, wastes and destroys capital. If he is put to death, it is on the ground that he has forfeited all right to existence in society by the magnitude of his offenses against its welfare. If he is imprisoned, it is simply a judgment of society upon him that he is so mischievous to the society that he must be segregated from it. His punishment is a warning to him to reform himself just exactly like the penalties inflicted by God and nature on vice. A man who has committed crime is, therefore, a burden on society and an injury to it. He is a destructive and not a productive force and everybody is worse off for his existence than if he did not exist" (p. 484). 
If Sumner's idea is accurate, where then did the criminal get the "right to be taught or reformed at the public expense?" (ibid.). And again, who is it that pays for his reformation? Sumner answers: 
"All that the state does for the criminal, beyond forcing him to earn his living, is done at the expense of the industrious member of society who never costs the state anything for correction and discipline. If a man who has gone astray can be reclaimed in any way, no one would hinder such a work, but people whose minds are full of sympathy and interest for criminals and who desire to adopt some systematic plans of reformatory efforts are only, once more, trampling on the Forgotten Man" (p. 485). 
Sixth, whenever government bureaucracy fills up public office not on the basis of qualification, you will encounter the Forgotten Man. Sumner explains the nature of this process: 
"If there is a public office to be filled, of course a great number of persons come forward as candidates for it. Many of these persons are urged as candidates on the ground that they are badly off, or that they cannot support themselves, or that they want to earn a living while educating themselves, or that they have female relatives dependent on them, or for some other reason of a similar kind. In other cases, candidates are presented and urged on the ground of their kinship to. somebody, or on account of service, it may be meritorious service, in some other line than that of the duty to be performed. Men are proposed for clerkships on the ground of service in the army twenty years ago, or for custom house inspectors on the ground of public services in the organization of political parties. If public positions are granted on these grounds of sentiment or favoritism, the abuse is to be condemned on the ground of the harm done to the public interest. . ." (ibid.). 
In granting favor to the unqualified, the Forgotten Man is ignored. Sumner describes him as "somebody who has nothing but merit on his side, somebody who has no powerful friends, no political influence, some quiet, unobtrusive individual who has known no other way to secure the chances of life than simply to deserve them" (ibid.).

Seventh, trade-unions harm the Forgotten Man through their effort to increase the salary of their beneficiaries. Sumner explains that salary increase for the "insiders" can only be accomplished "by drawing more capital into the trade, or by lessening the supply of labor in it" (p. 486). If the latter action is taken, other potential workers are prevented from entering into trade. The gain therefore of existing workers "is won at the expense of those persons in the same class in life who want to get into the trade but are forbidden" (ibid.).

In public discourse, what is usually higlighted is the benefits acquired by those who received the increase. Everyone accepts this news favorably, and nobody pays attention to the impact of the action of trade-unions on the part of those who are excluded. And who are these excluded people "who are always forgotten in all the discussions?" (p. 487). Again, "they are the Forgotten Men," men who are young and "who want to earn their living," men who are qualified, and would add value to society, "but they are arbitrarily excluded" and "pushed down into the class of unskilled laborers" (ibid.). These are the men who paid the increase of the insiders. 

Finally, jobbery hurts the Forgotten Man. Sumner defines "jobbery" as "the constantly apparent effort to win wealth, not by honest and independent production, but by some sort of a scheme for extorting other people's product from them" (ibid.). ( defines the term as "the practice of using a public office or position of trust for one's own gain or advantage"). Sumner then explains that most laws are actually used to accomplish this aim, and then he enumerates examples of jobbery: public buildings in most cases, internal improvements, protective tariffs, and more. 

Public buildings become jobbery when they "are not needed at all or are costly far beyond what is useful or even decently luxurious" (p. 488). Internal imporvements are also jobbery if "they are carried out, not because they are needed in themselves, but because they will serve the turn of some private interest" (ibid.). Protective tariff is the biggest jobbery of all and Sumner describes this as a "device" of plundering and being plundered (p. 489). Sumner mentions other examples:
"The silver miners, finding that their product is losing value in the market, get the government to go into the market as a great buyer in the hope of sustaining the price. The national government is called upon to buy or hire unsalable ships; to dig canals which will not pay; to educate illiterates in the states which have not done their duty at the expense of the states which have done their duty as to education; to buy up telegraphs which no longer pay; and to provide the capital for enterprises of which private individuals are to win the profits" (pp. 488-489). 
"On every hand you find this jobbery. The government is to give every man a pension, and every man an office, and every man a tax to raise the price of his product, and to clean out every man's creek for him, and to buy all his unsalable property, and to provide him with plenty of currency to pay his debts, and to educate his children, and to give him the use of a library and a park and a museum and a gallery of pictures. On every side the doors of waste and extravagance stand open; and spend, squander, plunder, and grab are the watchwords. We grumble some about it and talk about the greed of corporations and the power of capital and the wickedness of stock gambling. Yet we elect the legislators who do all this work. . . We groan about monopolies and talk about more laws to prevent the wrongs done by chartered corporations. Who made the charters? Our representatives. Who elected such representatives? We did" (p. 490). 
Sumner further describes jobbery as "economic loss," "spoils," "part of the pillage," "waste," "plunder," and "a chance to extort" (pp. 489, 491). Now returning to our repeated question, who is he that pays for all this plunder? Since everyone involves in jobbery produces nothing, but robs somebody's labor, the one who pays for all this theft is the Forgotten Man. 

The Identity of the Forgotten Man

Reaching this part of the article, I think you have now at least some idea about the identity of this Forgotten Man. Sumner describes him all throughout his lecture. In this section, I just want to collate all those scattered descriptions of the Forgotten Man:
"Now who is the Forgotten Man? He is the simple, honest laborer, ready to earn his living by productive work. We pass him by because he is independent, self-supporting, and asks no favors. He does not appeal to the emotions or excite the sentiments. He only wants to make a contract and fulfill it, with respect on both sides and favor on neither side. He must get his living out of the capital of the country. The larger the capital is, the better living he can get. Every particle of capital which is wasted on the vicious, the idle, and the shiftless is so much taken from the capital available to reward the independent and productive laborer. But we stand with our backs to the independent and productive laborer all the time. We do not remember him because he makes no clamor. . ." (p. 476). 
"The Forgotten Man is delving away in patient industry, supporting his family, paying his taxes, casting his vote, supporting the church and the school, reading his newspaper, and cheering for the politician of his admiration, but he is the only one for whom there is no provision in the great scramble and the big divide" (p. 491).
"Such is the Forgotten Man. He works, he votes, generally he prays - but he always pays - yes, above all, he pays. He does not want an office; his name never gets into the newspaper except when he gets married or dies. He keep production going on. He contributes to the strength of parties. He is flattered before election. He is strongly patriotic. He is wanted, whenever, in his little circle, there is work to be done or counsel to be given. He may grumble some occasionally to his wife and family, but he does not frequent the grocery or talk politics at the tavern. Consequently, he is forgotten. He is a commonplace man" (ibid.). 
"He is not in any way a hero (like a popular orator); or a problem (like tramps and outcasts); nor notorious (like criminals); nor an object of sentiment (like the poor and weak); nor a burden (like paupers and loafers); nor an object out of which social capital may be made (like the beneficiaries of church and state charities); nor an object for charitable aid and protection (like animals treated with cruelty); nor the object of a job (like the ignorant and illiterate); nor one over whom sentimental economists and statesmen can parade their fine sentiments (like inefficient workmen and shiftless artisans). Therefore, he is forgotten. All the burdens fall on him" (pp. 491-492). 
"It is plain enough that the Forgotten Man and the Forgotten Woman are the very life and substance of society" (p. 492). 
"They are always forgotten by sentimentalists, philanthropists, reformers, enthusiasts, and every description of speculator in sociology, political economy, or political science" (p. 493). 
Relieving the Burden of the Forgotten Man

Now that we know the identity of the Forgotten Man and that he is the "productive force" in society that many are wasting, what is supposed to be done to ease his burden? How can we stop wasting his force? Bear in mind that if we are successful in doing this, it is the whole society that will benefit. Reading the concluding section of the lecture, I stumble with two suggestions to help relieve the burden of the Forgotten Man. 

First, learn to see him whenever you hear and read about social reform to alleviate the condition of the poor. You must be cautious in listening to the speeches of politicians, philanthropists, and humanitarians. You must teach your mind to look into the source of fund for such artificial programs. The moment you see that, you will also discover that the Forgotten Man is in danger to suffer new attack. However, if you try to defend him, be ready to be accused as an enemy of the poor. 

The second suggestion is more related to those who have influence or power to make laws. Sumner explains this proposal:
"If you do anything for the Forgotten Man, you must secure him his earnings and savings, that is, you legislate for the security of capital and for its free employment; you must oppose paper money, wildcat banking and usury laws and you must maintain the inviolability of contracts" (p. 494). 
Again, in doing this, "you must be prepared to be told that you favor the capitalist class, the enemy of the poor man" (ibid.). I think, it is very rare to find these days even for a single lawmaker who is willing to risk his political career to relieve the burden of the Forgotten Man.

Source: Sumner, W. G. 1919. Keller, A. G. ed. The Forgotten Man and Other Essays. New Haven: Yale Univeristy Press & London: Oxford University Press. 

Tuesday, May 13, 2014

The Death Of Political Capitalism

I stumbled with a paragraph from Max Weber quoted by Gary North in Volume 5 Appendix D of the latter's economic commentary on Exodus:

The closest connection between ethical religion and rational economic development—particularly capitalism—was effected by all the forms of ascetic Protestantism and sectarianism in both Western and Eastern Europe, viz., Zwinglians, Calvinists, Baptists, Mennonites, Quakers, Methodists, and Pietists (both of the Reformed and, to a lesser degree, Lutheran varieties). . . . Indeed, generally speaking, the inclination to join an ethical, rationed, congregational religion becomes more strongly marked the farther away one gets from those strata which have been the carriers of the type of capitalism which is primarily political in orientation. Since the time of Hammurabi political capitalism has existed wherever there has been tax farming, the profitable provisions of the state’s political needs, war, piracy, largescale usury, and colonization. The tendency toward affiliation with an ethical, rational, congregational religion is more apt to be found the closer one gets to those strata which have been the carriers of the modern rational enterprise, I.e., strata with middle-class economic characteristics. . . .

Before giving my comment, I would like to add two additional paragraphs from North himself: 

Men’s universal understanding of the civil law reduces the arbitrary decisions of the authorities, and this in turn reduces a major area of uncertainty. This reduction in bureaucratic arbitrariness reduces production costs. 

Yet it is not simply the universality of the legal system that is important. Specific aspects of the legal system, such as the honoring of private contracts, the respect for private property, the nondiscriminatory nature of the tax system, and the restriction of the civil government to the preservation of order, primarily by preserving public peace and preventing private fraud and coercion, have made it possible for capitalism to flourish. 


In the above paragraphs, we notice three things: 

First, according to North, Weber distinguished between "political capitalism" and "modern rational enterprise," which the former describes as "market capitalism" elsewhere. 

Second, we also notice based on Weber's statement that the more religious the people became, the lesser was their inclination to political capitalism and the greater was their tendency to embrace market capitalism. In today's debate, libertarians commonly understand political capitalism as related to statism in the forms of interventionism or crony-capitalism. So following Weber's line of thought, we could say that the greater the commitment of the people to faith communities, the less statist they become and the more they are inclined to free market. 

Third, this insight is from North. Paraphrasing the two paragraphs, we could say that the more people understand the nature of civil law and its "specific aspects," the more the power of bureaucracy is reduced, and the more free market flourished. 


Let us now consider three implications from the above assessment. If the assessment of both Weber and North is correct, it tells a lot about our present situation. Most people these days are increasingly becoming more statist. This is particularly true among large number of intellectuals. They hate free market and they are inclined to favor the expansion of government bureaucracy. Based on the above assessment, this deterioration is just an indication of growing irreligiosity and ignorance of civil law. 

Let us advance this idea further. If both Weber and North are correct, it therefore follows that in the past we have a precedent how to kill political capitalism and advance market capitalism. This was done through religious revival and education of the people in civil law. In order to materialize the first means, what is needed is for the Church to preach the gospel. Moreover, concerning education in civil law, this is best done by recovering the heritage of classical liberalism. Furthermore, for people to appreciate market capitalism, retrieving the Austrian school is the suitable task. 

Finally, we could also say that the humanist and the atheist's argument that religion is a major source of wars and deaths is not at all credible at least as far as Weber is concerned. It is argued that the world will be more peaceful without God and without religion. This is a dangerous proposition for in 20th century alone, it is actually atheistic and humanistic ideas in the forms of socialism and Marxism using the power of the state that committed far greater crimes against humanity. 

Source: North, G. 2012. Authority and Dominion: Economic Commentary on Exodus Volume 5. Dallas: Point Five Press. 

Sunday, May 4, 2014

Tanaka Memorial

Lutang na lutang sa Tanaka Memorial ang pagsasama ng economic motivation, nationalism at imperialism. Sa tingin ko, dalawa sa mahalagang dokyumento para higit na maintidihan ang nasa isip ng Japan noong WW2 ay ang Nine Power Treaty at Meiji Plan. Para sa kanila ang ginawa nila ay implementation lamang ng plano na iniwan ni Emperor Meiji at malaking sagabal dito ang Nine Power Treaty na primarily ay initiated ng US. 

Basically ang Meiji Plan ay manifestation ng collectivist idea sa anyo ng nasyonalismo. Ang masama sa anyong ito ay ang kaisipan na ang makakabuti sa isang bansa ay makakasama naman sa iba, kaya nakakabit din dito ang imperyalistang ambisyon. Popular ang kaisipang ito bago pa ang WW1 at WW2 na siya ring nagtulak kay Hitler at Mussolini para ilunsad ang kanilang imperialistang adhikain sa Europa. Ang hindi lang gaanong "halatadong" imperialismo ay ang version ng Englatera at Estados Unidos sa dahilan na ang kanilang pinangangalandakang ipinaglalaban ay ang demokrasya at kalayaan, pero kung susuriin ng mabuti, collectivism pa rin. 

Para sa Japan, ang NPT ay isang pambansang pagpapatiwakal na hindi nila maaaring sang-ayunan tulad ng pagbawas ng armas at pagkontrol ng mga Briton at Amerikano sa natural resources ng Tsina. Ang polisiya na nais tahakin ng Japan ay ang tiyakin ang kanilang mga "rights" sa Manchuria at Mongolia. Ito raw ay sinasang-ayunan ng iba pang mga "Powers" upang maproteksiyonan ang international trade at investment. Ito rin lang ang tanging paraan para ma-develop ang trade ng Japan, mahadlangan ang industrial development ng Tsina at ang pagpasok ng mga makapangyarihang bansa sa Europa. 

So ang stratehiya ng Japan ay gamitin ang Manchuria at Mongolia bilang sentro gamit ang balatkayong "trade and commerce" upang makontrol ang natural resources ng Tsina. At pag nangyari ito, pwede nang isunod ang India, the Archipelago, Asia Minor, Central Asia, at maging ang Europa. Marami pang mga detalye ang nakasaad sa Tanaka memorial. Napansin ko yong kahalagahan ng paggamit nila sa mga Koreans at mga railroads para sa katuparan ng Meiji Plan. Kung meron mang posible sanang positibong kontribusyon ang mga Hapones sa ekonomiya ng mundo, ito ay ang kanilang monetary policy. Naniniwala sila sa gold standard currency. Ito ay higit na mainam kaysa sa kasalukuyang pandaigdigang monetary policy na fiat currency. Ang nakakapagtaka lang ay ang pagbabago ng posisyon ng Japan na sa kasalukuyan ay ang pinaka-agresibo sa pagsunod sa yapak ng US pagdating sa pag-iimprenta ng fiat currency.