Thursday, October 20, 2005

Propertarianism III: Revisiting the Estates General

I must constantly make clear that these are not lefty-rants I am offering. If you think that, then you are seeking comfort in reassuring delusions. You are not actually reading or exploring, and you are not trying to see things from a fresh angle. (As if this "you" applies to any of the modernists who haunt this place! ;-)

In fact, I'm a big promoter of market-based solutions to problems. Like many of my honest-modernist conservative friends, I deeply believe that expanding a sense of market involvement among the world's poor will help us all. My paper on accountability arenas focuses specifically on the vital importance of Liberal Competition, not only markets but also science, democracy and courts, which enhance progress through reciprocal accountability. ("Liberal" in this case is in the classic and truer usage, going back 200 years.)

But that's the point. Mystical Propertarianism is not about markets. Nor is it about achieving practical aims; like reducing deficits, propelling research, spurring the economy, stimulating investment, or any of the other surface rationalizations.

No, Propertarianism is a romantic-dogma, a faith-based cult that pushes an agenda of cheating markets in order to re-establish the traditional aristocratic social order.

And make no mistake, you cannot avoid the historic fact. I will reiterate it till you yell uncle! Across 4,000 years, vastly more markets were destroyed by aristocratic cheaters than were ever destroyed by socialists.


May I re-state this in a clear historical illustration?

Let's go back in time to the origins of the insipid and horrifically stupid left-right-political-axis which is currently hobbling all subtlety in 21st Century social thinking. At least back when it started, left-vs-right bore some marginal relevance... to the French Assembly in 1789, right after it was formed out of the older Estates General.

What were the Estates General?

In 1789, facing bankruptcy, Louis XVI called the Estates General in a desperate hope of raising money. The Estates General had three chambers, one for each of society's three "estates" or status groups. The nobility, the churchmen (including vastly wealthy monastic orders), and the commoners. Of these three, only commoners paid taxes - lots of them - even though the aristocracy and monasteries held nearly all the land and money.

Louis had already erected walls around French cities to collect levies and tariffs on goods entering and leaving... a restraint of trade that we now know to have been impoverishing madness. Every other attempt to squeeze the farmers and tradesmen and workers proved just as counterproductive... as British mercantilism had only spurred the American colonies to revolt.

Now, in desperation, Louis turned to the gentry and bishops and monks, asking them to vote an end to their tax exempt status.

A few saw what was happening and were willing. Most dug in their heels, calling it "Our money"... or "our ancient privilege"... or "God's money"... The few who weren't blind walked across a tennis court and joined the Commons in forming the new Assembly. But it was too little, too late, to stanch the anger - and the rage.

I could cite a myriad other examples - from Czarist Russia to the Old South - from Babylon to Charles I - but the pattern is simply too common, too banal, too predictable... and yet too-commonly ignored.

It is human nature for dogmatists and aristocrats to join forces, finding lovely phrases and justifications for taking over the machinery of the state and then using it (and the distraction of war) to enforce a pyramidal hierarchy of privilege. Suppressing true markets and finding excuses to quash competition from the lower orders. Taxing everybody but themselves. Granting themselves contracts and/or even gifts from the state treasury. Justifying secrecy and closed courts and cronyism and evasion of every kind of accountability.

It is - alas - boring old human nature. Church and nobles and the State - wedded against the people who make and build and think and grow and toil. Remember, this is me talking, not some socialist. So you cannot dismiss this as a socialist rant. You know it is what nearly always happened. And you know it's happening now.

In fact, the only surprising thing is that - for a few hundred years - we seemed to evade this repetitious pattern... of aristocrats combining with clergy to take over government and use it for their own ends. Destroying markets because true markets engender upward mobility. Wrapping themselves in the flag. Evading accountability. Thinking themselves smart, while their every move is too staggeringly stupid to believe.

===Continue to Part IV

or return to Part 1 of this series

See also: Class War and the Lessons of History


Ben Tilly said...

Have you read Wealth and Democracy by Kevin Phillips? It touches on somewhat similar themes, but with a wealth of facts and figures to back it up. Furthermore Kevin Phillips has a good track record of seeing political trends before anyone else does.

A couple of points from his book are of particular interest.

First of all, you might be interested to note that the USA has not entirely avoided the trap that you're talking about. A century ago, during The First Gilded Age (we are now in the second), a thin veneer of wealth managed to get immense political power. That problem corrected itself, but not before quite a bit of pain.

Secondly I find it interesting that every Great Power in the last 400 years (Spain, Holland and England in that order) had a clear trajectory from their peak. They hit a clear peak of economic euphoria, society stratefied economically, the country focused on the paper economy (financial manipulations) over the real one (making stuff), technical knowledge was exported wholesale to up and coming countries, the country got involved in foreign military adventurism that turned out badly, and about 15 years after the peak, the house of cards collapsed. (In Spain and Holland this collapse coincided with civil war, in England there is some evidence that a civil war was starting but got pre-empted by WW I.)

If we place the US peak at 2001, the pattern so far fits perfectly. The only thing missing is that 15 years haven't passed so we don't know whether he's right about when the house of cards finally collapses. But I have to say that when he was writing in 2001, his predictions had to be more audacious than they were when I read them a year later. And the idea that the USA could head towards civil war seems more likely to me now than it did then. (I'd still say the odds are against it, but I'm not as confident about that as I was.)

All of which suggests that you're right about the magnitude of the economic danger that we face from our current elites. And further this suggests that telling people about it is useless - the people who are in a position to do something about have too much invested in the success of the system to be willing to understand that what they are doing won't work.

reason said...

Ben Tilly - very interesting but why do you think that the peak was 2001? It was a recession year just after the collapse in 1999 of the Internet bubble. Surely 1999 would be a better year to choose.
I also see plenty of signs that the house of cards will collapse soon - there is no way it can hang out to 2016. Maybe the world just moves faster these days.

Ben Tilly said...

2001 was a brain fart. My brain associates the collapse with Bush coming to power. Of course Bush didn't cause it. But he did arrive at the same time as the meltdown.

As shows, despite collapsing in the UK somewhat earlier, the first listed dot com to collapse in the USA was in November, 2000. Then 2001 was a grim month.

Most of them collapsed because there was no way that they would fly. Some had a potential plan and made a business mistake. For instance eToys ran into trouble because they overestimated their year to year growth and built up way too much warehousing inventory for Christmas 2000, then didn't sell enough to cover their bonds. Ironically they were profitable when they ran out of money. It is just that they needed immediate cash and didn't have liquid assets.

Some of the survivers had close calls as well. For instance, like eToys, had bond issues that they needed to pay. Unlike eToys, though, Amazon managed to successfully issue new bonds to cover the old ones and stayed afloat.

Anonymous said...

“in England there is some evidence that a civil war was starting but got pre-empted by WW I.”

I agree and would add that there is Even more evidence that Brittan, Russia and France deliberately started WWI by means of the secret alliance, but underestimated the ability of the German army. Then Brittan compounded their mistake by trying to make friends with Hitler in order to fight communism.

I think Ben that you are too quick to give up about sounding a warning. Brittan had a similar experience in the 1650's but learned from the experience, recovered and became even more powerful as a result of 30 years of changes made after Cromwell died. Also the elites are dependant on the complicity of the masses. If the majority loses faith in the system, change can come about rapidly, either violently [ie The french revolution] or non violently [ie: Removing Marcos, Milsovich, etc]