Dear Friends,
It seems to me, there are only two ways to order an economy, by political favor or by free association. Political favor includes, but isn’t limited to, Marxism, communism, socialism, fascism, etc… while free association is also called free markets, capitalism, and free enterprise. The natural system of exchange is free association. A monopoly on violence and the willingness to use it is required to interrupt this natural system. Which is why there are no examples of actual utilitarian societies in the historical record. With the possible exception being the Harrapan civilization. But we know so little about it our assumptions maybe exactly wrong. Can you think of an example that falsifies this idea? Which means, if true, that systems that use political favor, are violent as a requirement.
The Pareto distribution will exist no matter the system chosen. History is pretty clear on this. In utilitarian North Korea, for example, there are the rich and the poor. The poor are literally starving if we believe Yaomi Park. Yet the distribution of wealth follows the Pareto distribution, just as in a capitalist society. The main difference is, the elite use force to take the goods of society, and then distribute those goods by political favor. The most favored getting the most and the least favored, descendants of capitalists… get to live in concentration camps. Socialism, communism and fascism don’t level outcomes, they change who wins. Instead of the producers of goods getting the use of them, the political elite get the use of those goods. Making everyone else slaves to the politically favored.
Systems that use political favor distribute the goods of society by political favor. What I mean by political favor is, the political power an individual has. Normal people have little individual political power, and thus favor, unless massed. Even as judges have a great deal more political power and thus favor. Moreover, politicians by definition have the most political power and so the most political favor. Then there are celebrities. Who wield political favor by popularity. They can get people to mass our little individual favor, into a hammer, then wield it against their political foes. This is a natural state of affairs. There will always be popular people, politicians and elites, though, they need not exploit that political favor to enslave the rest of society. That’s a violation of the Golden Rule.
Systems that use freedom of association distribute the goods of society by merit. If you pick up a stick and whittle it into a flute. Is that flute yours, a thug’s, or a thug state’s? Should you get the use of that flute, or should someone else? What if you sold that flute? Who else has a legitimate claim on that instrument? Only people with the power and malign intent to take it from you. They would use Thrasymachian logic and law, to “justify” taking your property…. by violence if needed. Setting up a negative incentive to create. In a system of free enterprise however, that flute is yours until you sell it. Then the money is yours as well. Setting up a positive incentive to create. Obviously, if the incentive is not to create, little will be made, and if the incentive is to create, much will be made.
The lazy, and those with or likely to gain political favor, prefer political favor as the means to distribute wealth. Even as hard workers, producers and doers prefer free association as the means to distribute the economy’s wealth. History shows, when political favor is used, general poverty results. While free association results in general prosperity. Due to the innate incentives. Both systems distribute wealth in a Pareto distribution. To the politically favored or the meritorious. So, if we want general prosperity then free association is the choice. If however, enriching the politically favored is the goal, the rest of society to be enslaved… then by all means, use political favor to distribute the goods. But remember, it’s not justice that’s being served, it’s avarice… baked by violence.
Sincerely,
John Pepin
