Property is Civilisation

Fred Bauer writes (24 May) in the Blog, New Majority.com (‘Building a conservatism that can win again’) HERE:

“Republican Equality

Theories of the free market have long concerned themselves with the role of inequality. In The Wealth of Nations, Adam Smith famously argues that the development of advanced modes of production and commerce undermined the stark inequalities of the feudal world. The thirst of the rich for luxuries such as diamond buckles led to a breakdown of the system of feudal-agricultural dependence, in which wealthy landholders held not merely economic but also political domination of those below them.

Smith's argument has two salient implications for the current political right/classical liberals/conservatives: (1) certain forms of radical economic inequality can result in significant political inequalities (witness the petty tyrannies of medieval nobles), and (2) the functioning of the free market can serve as a way of mitigating these inequalities, of leading to a turnover of wealth, of making differences in levels of income less poisonous for civil liberties. The free market and inequality thus have a quarrelsome relationship: the market helps create inequalities, but it also undercuts the financial inequality of any given moment, allowing the rich to fall and the poor to rise. Inequality in results is a key characteristic of a market economy, and the very operations of a free exchange can prevent these inequalities from hardening into radical caste differences.

However -- and this is a crucial "however" -- the market itself, particularly in the wake of modern industrialization and certain forms of government intervention, can result in inequalities so vast that they begin to undermine a faith in free markets. And the growth of these radical inequalities can lead to a creeping sense of the hardening of financial differences. If one of the promises of the free market as a vehicle for an authentically liberal-democratic politics is in its ability to allow for social and economic mobility, increasing doubts about the existence of these mobilities also increases doubts about the efficacy of the market and its contribution to political equality. Radical inequalities and a sense of economic stagnation can in turn lead to a widespread rejection of the instruments of the free market and, more broadly, the free society.

The early twentieth century, that high tide of income inequality (the top .1% took home about 10 % of the national income in 1916), was also the high-water mark of the Socialist Party of America; Eugene V. Debs won 6% of the national vote in the fractious election of 1912.

Granted, the rise and fall of the SPA cannot be reduced to that single statistic, but wide income disparities perhaps set some of the conditions for this rise.
Aside from questions about social and economic ideals, this hard practical fact endures: in the modern welfare state, if a great majority believes that it can no longer economically advance, it has the political power to legislate the confiscation via taxation of the wealth of the rich. Now, this confiscation may not succeed in reducing inequality -- the grotesque inequalities of so many "workers' paradises" are built upon the failure of this confiscation to equalize -- but it can still be attempted. In addition to ethical objections about such a policy, a kind of economic hope as well as an economic fear serve to restrain this confiscatory enterprise.

The fear is that such governmental power could be turned against the members of a temporary majority; the hope is that the poor could, too, become rich, so they would want to be able to enjoy their wealth. But at a certain point, the fear of the misuse of power can recede before other, more immediate fears (such as starvation or death of exposure). Social mobility, on the other hand, feeds this hope. If one of the free market's benefits is social mobility, this mobility itself helps increase public support for the free market and protects it from overweening government.

The free market and government regulation are, then, both double-edged entities for issues of inequality. The free market can create radical inequalities through allowing a select coterie to dominate and entrench itself as an economic elite, but it can also unsettle entrenched elites and provide the hope of mobility through an open exchange; governmental regulations can prevent monopolies from forming and ensure limitations on the power of the extremely wealthy, but these very regulations can be tools for the hyper-rich to shut down the market and prevent competition.

Comment
When conservative-minded writers put their minds to work they often produce well thought out ideas. If only they translated into practical politics, but that’s another story.

Adam Smith’s writings on the decline of feudal-property relations in Britain shows an outstanding grasp of history and a deft hand at work, explaining the complex inter-actions between the ruling feudal lords and the newer, lower-order and despised trading merchants. Smith confined his remarks to silver buckle buying by some of the Lords (he lived in a man’s world), but we can be sure that much of the trinkets, brooches, rings, rare perfumes, silks and such like were destined for the Lords’ women.

Smith’s point was that the merchant traders brought luxury goods for the Lords to buy, who were increasingly tempted dispose of the main sources of their political power – their armed retainers – which troubled the leading Lord, the King, and those would-be Kings who eyed their throne, and oppressed the landed workers (hardly, incidentally, a ‘petty tyranny’; it served ‘petty’ ends, no doubt, but was brutal to its victims).

This was a long process, but the end result was an enfeebled aristocracy and a more vibrant merchant core, able to extract concessions from the king in parliament which gave them, eventually, an effective veto over the sovereign’s spending, legitimised by the outcome of a civil war. These Liberties constituted the constitutional monarchy that was 18th-century Britain.

Markets only continue what the consequences of the origination of property did way back in pre-history: create wealth (the 'annual output of the necessaries, conveniences, and amusements of life' and, inevitably, inequality. The great agricultural societies, growing from a long history of hunter-gatherer subsistence economies from 11,000 years ago in a small segment of the earth’s surface, were noticeable by their inequality, which extended way beyond economic inequality to political and religious inequality. Tribal property in territory preceded family and private property.

The great empires of Egypt, Babylon, India and China, were dominated by ruling elites that managed the hydraulic mysteries and seasonal timings of everything about everyday life for the vast majority of their peoples. The stone detritus of these former stone-built civilisations are spread across the Eurasian continents, north Africa, and in parts of central and south America.

Their predecessor stone-age tool detritus is spread all round the world, into modern times too, which was the subsistence mode of every human society that did not grow into shepherding and farming. Those, few, modern, aimlessly discontented, people who have notions of going back to what they call, the ‘simpler’ life of pre-history, seem to have no idea what that would involve, including the mass extermination of about 6 billion people.

For tens of millennia, the inequality of the world’s population remained constant, with a small elite monopolising the power, and almost everybody else living on subsistence and almost static per capita levels. That is until, again in parts of Europe, commercial society from the 14th century began, slowly, to revive after a thousand years of stagnation, Black Death, endless wars, and social strife, since roughly it was after the fall of the Western Roman empire.

And within four centuries, in Britain, economics, technological and social change, and the unprecedented steady, cinpound interest of the albeit minute rise in per capita incomes finally broke through the petty cycles of the 'Malthusian Trap', ironically almost coterminous with its identification by Thomas Malthus.

These events created social inequalities of a new kind – that between societies that developed institutions capable of ensuring the necessary conditions for continuous, though small, growth rates and those societies – the majority – not capable for various reasons of breaking out of their subsistence economies. The unequal poor in the commercial societies were incomparably better off than those in the unequal traditional societies, claimed Smith in Wealth Of Nations.

It is that comparative inequality that is the distinction brought about by the social evolution of early commercial societies into what became known as capitalism from the mid-19th century. It is a phenomenon that the Left do not acknowledge and the conservatives do not yet accept. There is nothing ordained about the existing arrangements of Big State capitalism or Big Welfare States that will ensure their continuation in their present forms.

The task of the philosopher, said Adam Smith, is to observe and seek to understand; it is not to do anything to intervene with panaceas and social engineering. Philosophers must be wary of becoming 'men (and women) of system' (TMS VI.II.2.17-18: 233-4)