A Reply to Common [Catholic] Objections Against the Free Market. 2

8:26 PM Marcellino DAmbrosio 1 Comments


    Objection #2
     Without the state helping to redistribute resources, a wealthy class will hold on to the means of production and will keep the poor from being able to climb out of poverty.
    "A society in which the ownership of the means of production is confined to a body of free citizens, not large enough to make up properly a general character of that society, while the rest are dispossessed of the means of production, and are therefore proletarian, we call Capitalist. Note the several points of such a state of affairs. You have private ownership ; but it is not private ownership distributed in many hands and thus familiar as an institution to society as a whole. Again, you have the great majority dispossessed but at the same time citizens, that is, men politically free to act, though economically impotent... It is a necessary inference that there will be under Capitalism a conscious, direct, and planned exploitation of the majority, the free citizens who do not own by the minority who are owners.” (The Servile State by Hillare Belloc)
        Hillare Belloc is basically saying that in a capitalist society, without state intervention, class disparity cannot be solved. The wealthy will hold on to the means of production, and the poor will remain “economically impotent.” GK Chesterton and many other Catholic thinkers have argued this and advocated for the means of production to be distributed more evenly around the economy. Belloc, Chesterton, and all others who think this way are incorrect in their assumption that the rich will always hold capital tight. Yes, wealthy people will seek to do this at times. However, this sort of class warfare sort of argument only works if the means of production are limited. Underlying Belloc's argument is a flawed concept of wealth that smacks of Mercantilism. Capital is as limited as there are problems in the world to be solved – that is to say wealth is unlimited. As long as people want a better life style and have desires for comforts, new experiences, and more effective methods of producing, there will always be more money to be made.
The only real way to limit the hands that wealth belongs to is by state intervention. In the free market, for instance, if a bank makes mal-investments and goes bottom up, it's assets are sold at low prices, and competitors can enter the market more easily. Those that don't have the buying power they would normally need to enter into the competition, now are more able to. However, when there is a state in place that has the power to intervene, those banks/companies that failed to utilize their resources effectively go to that state begging and pleading saying “we are too big to fail!” And then the state uses the money it stole from us via taxation to buoy up these firms. In the free market, no such safety mechanism for the rich would exist. A rich man can fail just as easily and just as spectacularly as a poor man. Only the state provides a method for limiting the distribution of resources. This is what happened in 2008, when republicans and democrats both voted to bail out the banks and car companies. All of those resources should have been sold off to new competing firms (good for poor people) for a fraction of the price.
        The rich, however, are not the only ones who use the state to discourage innovation and limit wealth. The poor of America have learned that they can use the state to punish the success of some by taxing the rich more and by suing those with resources. By definition the state does not support itself. It only relies on what it takes from others. Anyone, then, can lobby the state to steal from one group and give to another. That is what a state does. So when literally everything is an opportunity to sue, the people of a nation live in absolute fear of one another. We get used to it here, but just think of how much the fear of a lawsuit has on American life. The fact that a McDonalds as to put “careful, cup may be hot,” on their cups is a prime example of the poor doing the opposite of what Belloc argues will happen in a free market. The gun of the state is the weapon by which man steals his brother's assets. As Murrey Rothbard puts it, when one uses the state to steal from producers, that act subtracts from production instead of adding to it. “The "political means" siphons production off to a parasitic and destructive individual or group; and this siphoning not only subtracts from the number producing, but also lowers the producer's incentive to produce beyond his own subsistence. In the long run, the robber destroys his own subsistence by dwindling or eliminating the source of his own supply. But not only that; even in the short run, the predator is acting contrary to his own true nature as a man.” As I have already shown in the above paragraph, the free market is perfectly capable of regulating itself. Bad ethics is bad business and is never actually sustainable. Without help from the state, such businessmen as those who caused this past recession always fail, and their resources are divided amongst the less affluent, competitive man. What then does the state do? Only turn man against himself by providing an easy means of piracy.
         So how does the standard of living rise, then, if not by the force of a gun? It rises when Dave the Peasant decides that he is going to save his resources and pool them together, to say, buy a plow and a pair of oxen. When he does this, he no longer needs to dig with a hoe. He gets more work done with the plow than he ever could have with a hoe. Dave's standard of living has just been raised. He now produces way more food, and maybe another man in the community, lets call him Jeff, no longer needs to farm in order for every one to get fed. Jeff figures that the other farmers need plows and that he is just the man to build them. He now builds plows, which makes plows easier to get. Now other farmers can afford them.         You see, a lot more work can get done by a man with a forklift than a man with a horse cart. Of course you had to work 13+ hours a day back in the industrial revolution, everything was still being done by hand! It wasn't government restrictions that changed the situation, it was the desires of generations of men to provide a better life for their families. It takes time for the standard of living in a community to rise up, but there are no shortcuts. It is supreme ingratitude to steal the thanks from these men women and children, from whom we've inherited the standard of living which we now enjoy, and give it to self important politicians. Economic calculation is always open for the poor man. we ought not penalize him for succeeding. Every state law and regulatory burden is an obstacle to the poor man's emancipation. No, Belloc, and the Church, misunderstands economics when they claim that resources will always be distributed only to the rich in a free market system.
        Moreover, it is not possible to force employers to pay employees higher wages by government inflation. Such measures are unsustainable. If you owned a factory in 1920 and the state came and said to you, you must provide your employees an air conditioned working environment, you would have shut down. Well, now this is something that we all take for granted. If the government stopped telling companies to air condition their work places, would all companies immediately stop air conditioning their buildings to save money? No, of course not. Why? Because they are competing for employees. If one company has air conditioning, and another does not, which job is more preferable? A company that does not have an air conditioned work place must pay employees more in order to work there. A man might decide that he wants higher wages more than he wants air conditioning, and that is his business. Far be it from us to tell that man that he must take lower wages and force his employer to air condition.
       No, free association and free exchange of resources is the answer to poverty, not the cause of it. 

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