Dear Friends,
It seems to me that for a market system to function properly the people must be honest. As the people that make up a society become less honest, for whatever reason, the market becomes less and less efficient until it’s correct function is totally destroyed.
In this article we mean honesty in the sense of; honesty in action, honesty in speech and honesty in thought.
Most people think there is one path that can be taken to create the necessary conditions for an honest society when in fact there are three;
The first is the path the human race has taken the most, the easiest and worn with wheel ruts, it is to use draconian law to control the avarice of the people. The aristocracy is given free reign to their avarice. The few exceptions are notable in that they resulted in historically significant advancements in human understanding.
The second means to keep the citizenry honest is to hold the aristocracy to a high level of honesty. This is the means proscribed by Confucius. This is the means, that comports with reality the best, in that people, naturally follow the Elite. The people value what the Elite value and disdain what the Elite disdain. In societies where the Elite value luxury the people will value luxury. In societies where the Elite value hard work the people will value hard work.
The sage kings of ancient China are said to have put aside their own selfishness even to the point of selecting the next king by merit instead of blood. The Spartan civilization, under the laws of Lycurgus, is another example. The Spartan citizens were, by law, forbidden from luxury, coined money in iron, could not do manual labor and had to constantly train for war. While the laws of Lycurgus warped and distorted humanity they did show the advantages of forcing the Elite in a society to eschew luxury and vice. The Spartan by law… the Sage Kings by being sages.
Moreover people try to act as the Elite as best they can. When the Elite are corrupt the people will follow them into Hades. Where the Elite are virtuous the people will be virtuous. It follows then that to hold the Elite honest holds the people honest.
The third way is chaos. Hold no one to no standard. As a means, this is the worst, and would not result in an honest Elite or an honest citizenry, inevitably resulting in the lowering of everyone’s standard of living.
Just as water flows downhill and smoke rises in still air a dishonest society requires ever expanding law and punishments. Providing clear evidence that the Elite are corrupt in that society. Just as water proves a grade and smoke proves fire. In societies that are increasingly honest there is less need for onerous law and punishments. Liberty in society requires an honest people to enjoy it.
In a society where there is liberty but not honesty, the people will quickly call for more and more law, to protect them selves and their property from the dishonest society they live in. You cannot live in a cesspool however without smelling like it. People who lived in a less and less honorable society are incentivised to become less honest themselves. Even the Jen Man who lives the Golden Mean will necessarily lower his level of honesty as that of society lowers. Like a boat with the tide.
The ideal example is the Weimar Republic in Germany during the interwar period. The Elite tried to protect their vassal businesses with legislation. Protectionism was the ethos of the 1930s and the Weimar Republic was a big believer. They also wanted to minimize the negative impact their policies had on society so they passed ever more socialistic laws. Laws that undermined the very business they sought to protect. So government and society corroded. The Government decided that all they needed was more money and they could subsidize favored business, and support the people put out of work, from the self serving policies of the politicians. The result was an economic collapse and a backlash against liberty. The people came to the conclusion that it was liberty that was causing such a mess of the economy. They thought that if only the government could have more power the Elite could do what was necessary to get the economy moving again. This pernicious notion coupled with extreme nationalism created the NAZI party.
Corrupt Elite enact corrupt policies which create more need of law, allowing the self serving Elite to pass more corrupt law. The loop is only broken when the Elite are forced to be honest. They won’t do it by themselves. The Elite must be forced to it. Else liberty will be something our grand children read about in history books…
