Sunday, August 2, 2015

#035: Feudalism

"A man is none the less a slave because he is allowed to choose a new master once in a term of years. Neither are a people any the less slaves because permitted periodically to choose new masters. What makes them slaves is the fact that they now are, and are always hereafter to be, in the hands of men whose power over them is, and always is to be, absolute and irresponsible." - Lysander Spooner

Whenever I hear some statist claim that libertarianism will lead to feudalism, it’s a good indicator that they have little to no understanding of basic political theory, or history, or economics. This isn’t the least bit surprising as many statists also insist that Somalia and Honduras are “libertarian”, China is “communist”, and Scandinavia is “socialist.”

Statists claim that, if free-market capitalism were truly practiced, and the market was entirely free of government intervention, that all wealth would be unfairly distributed to a select few oligarchs and thus lead to an era of “neo-feudalism”—because rolling back a heavily-centralized government which economically props up a select few oligarchs will ultimately create a heavily-centralized government which economically props up a select few oligarchs. Makes sense!

Seriously, the only time the words “feudalism” and “capitalism” even belong in the same sentence together is if they are in the following sentence: “Feudalism inevitably dissolved and made way for capitalism through the economic system of mercantilism, which helped divert wealth and resources from the monarchs to the merchant (working) class through voluntary trade and labor, inevitably leading to a boom of economic prosperity among the lower classes.”

As Ludwig Von Mises explained in his essay, “The Rise of Capitalism”, prior to capitalism, all wealth was accumulated by the monarchy, whom controlled the means of production and forced the serfs under them to meet their economic needs. This all changed under capitalism, which helped reverse the roles of the classes as production shifted from the demands of the wealthy elite to the lowly consumer:
“Capitalism is not simply mass production, but mass production to satisfy the needs of the masses. The arts and crafts of the good old days had catered almost exclusively to the wants of the well-to-do. But the factories produced cheap goods for the many. All the early factories turned out was designed to serve the masses, the same strata that worked in the factories. They served them either by supplying them directly or indirectly by exporting and thus providing for them foreign food and raw materials. This principle of marketing was the signature of early capitalism as it is of present-day capitalism.

The employees themselves are the customers consuming the much greater part of all goods produced. They are the sovereign customers who are "always right." Their buying or abstention from buying determines what has to be produced, in what quantity, and of what quality. In buying what suits them best they make some enterprises profit and expand and make other enterprises lose money and shrink. Thereby they are continually shifting control of the factors of production into the hands of those businessmen who are most successful in filling their wants.”
Or as Walter Williams poignantly summarizes in his column, “Capitalism and the Common Man”:
“Capitalism is relatively new in human history. Before the rise of capitalism, the way people amassed great wealth was by looting, plundering, and enslaving their fellow man. Capitalism made it possible to become wealthy by serving one’s fellow man. Capitalists seek to discover what people want and then produce and market it as efficiently as possible.”
This isn’t merely the postulating of two “wacky” Austrian economists. History has proven, time and again, that capitalism, rather than leaving the powerless “without any means of escape”, as Pope Francis claimed, instead provides such a means of escape from crushing poverty and oppression:

As this chart shows, global poverty has been on a rapid decline over the past century, especially within the past 30 years under the "neoliberalism" and globalization spawned by Reagan and Thatcher.

The Economist elaborates:
“In 1990, 43% of the population of developing countries lived in extreme poverty (then defined as subsisting on $1 a day); the absolute number was 1.9 billion people. By 2000 the proportion was down to a third. By 2010 it was 21% (or 1.2 billion; the poverty line was then $1.25, the average of the 15 poorest countries’ own poverty lines in 2005 prices, adjusted for differences in purchasing power). The global poverty rate had been cut in half in 20 years.

The country that cut poverty the most was China, which in 1980 had the largest number of poor people anywhere. China saw a huge increase in income inequality—but even more growth. Between 1981 and 2010 it lifted a stunning 680m people out poverty—more than the entire current population of Latin America. This cut its poverty rate from 84% in 1980 to about 10% now. China alone accounts for around three quarters of the world’s total decline in extreme poverty over the past 30 years.”
With all this in mind, it should come as no surprise that economic freedom correlates heavily with high living standards, as countries with the most economic freedom also have the lowest corruption and highest living standards.

But, of course, it's easier to ignore the facts and claim that free market capitalism (and, by extension, libertarianism) creates feudalism.