The Loathing of Commercial Capitalism Has Ancient Roots

The Loathing of Commercial Capitalism Has Ancient Roots

On a couple of previous occasions, I have written about the failures of socialism and about socialism’s continued appeal. In those columns, I pointed to research that suggests that at least some socialist instincts, including zero-sum thinking and egalitarian sharing, might be inherent to the design of the human brain. A number of people emailed me to express their skepticism about the “innate” nature of socialism. Isn’t socialism, they said, a relatively new phenomenon that arose, in large part, as a response to the perceived “abuses” of capitalism?

Idealized societies that various thinkers have imagined throughout the ages tended to share the prejudices of the ancients. As a consolidated, if not necessarily coherent, criticism of capitalism, socialism is certainly new. But, so is capitalism, as we understand it. Prior to the Industrial Revolution, few people talked about either. However, as I will show below, flashes of socialist and anti-capitalist thinking can be discerned all the way back in antiquity, thus pointing to the deep-seated nature of intuitive responses to both economic “systems.”

As mentioned, “socialism” and “capitalism” are relatively new, but their basic precepts are not. In so far as capitalism is only the latest iteration of an economic set up based on commerce, private property and profit making, there have always been those who found those three unpalatable.

The Ancient World
Consider the following examples.
Hesiod, the Greek poet who lived in 8th century BC, believed that human history could be divided into golden, silver, bronze, heroic and iron ages. The defining characteristics of the golden age, he thought, were common property and peace. The defining characteristics of his contemporary iron age were profit-making and violence.

In Homer’s Odyssey, which was probably written in the 8th century BC, the Greek hero Odysseus is insulted for resembling a captain of a merchant ship with a “greedy eye on freight and profit.” According to 5th century BC Greek historian Herodotus, the Persian emperor Cyrus the Great dismissed his Spartan enemies by saying,

“I have never yet been afraid of any men, who have a set place in the middle of their city, where they come together to cheat each other and forswear themselves. Cyrus intended these words as a reproach against all the Greeks, because of their having market-places where they buy and sell….”
Writing in the 4th century BC, Plato envisaged an ideal society ruled by “guardians,” who had no private property, so as not to “tear the city in pieces by differing about ‘mine’ and ‘not mine.’” He observed that “all the classes engaged in retail and wholesale trade...are disparaged and subjected to contempt and insults.” In the ideal state, Plato averred, only non-citizens should engage in commerce. Conversely, a citizen who becomes a merchant should be punished with imprisonment for “shaming his family.” Even the hyper-rational Aristotle agreed that “exchange [of goods for profit] is justly condemned because it involves … profiting at others’ expense.”

In ancient Rome, wrote Professor D. C. Earl of the University of Leads, “All trade was stigmatized as undignified … the word mercator [merchant] appears as almost a term of abuse.” In the first century BC, Cicero noted that retail trade is sordidus [vile] because retailers “would not make any profit unless they lied constantly.” The Roman masses shared this attitude. The comedies of Plautus were directed to a mass audience. In them, notes Earl, Plautus “makes frequent reference to the commercial classes, who are invariably treated with hostility and contempt.”

The Christian Age
The hostility of Roman Catholic theologians to commerce is well known. Consider the Decretum Gratiani, which was the standard compilation of canon law from the time that Gratian published it in the mid-12th century AD until 1917. Accordingly, “Whoever buys something … so that it may be a material for making something else, he is no merchant. But the man who buys it in order to sell it unchanged … is cast out from God’s temple.”

Protestant theologians agreed. According to the economic historian R. H. Tawney, Martin Luther “hated commerce and capitalism.” In Das Kapital, Karl Marx approvingly quotes Luther as saying, “Great wrong and unchristian thievery and robbery are committed all over the world by merchants.” And John Calvin noted that the life of the merchant closely resembles that of a prostitute, for it is “full of tricks and traps and deceits.”

Idealized societies that various thinkers have imagined throughout the ages tended to share the prejudices of the ancients. Sir Thomas More, the Lord Chancellor of Henry VIII of England, coined the word “utopia” in a book of the same name. In More’s Utopia, both money and private property were abolished.

Revulsion against Trade
Over the succeeding centuries, humanity periodically acted on its revulsion toward trade, private property and profit making. Some experiments, such as those of 15th century Bohemian Taborites and 17th century Plymouth Colonists, were inspired by the Christian religion. Others, like Robert Owen’s 19th century experiments in New Harmony, Indiana, and New Lanark, Scotland, were not. In the end, all such experiments failed amid discord and poverty.

This, by necessity truncated, look at the past clearly indicates the ancient roots of human hostility toward some of the most important features of capitalism. To explore this topic further, I have organized a policy forum on “Socialism and Human Nature,” which will take place at the Cato Institute on September 14 at 11am.

The forum will feature three well-known thinkers: Jonathan Haidt, Professor of Ethical Leadership at the New York University; John Tooby, Professor of Anthropology at the University of California–Santa Barbara; and Leda Cosmides, Professor in the Department of Psychological and Brain Sciences, University of California–Santa Barbara. Our panel will further explore the evolutionary origins of these impulses and I will write about our conclusions in a future column.

This piece originally appeared on CapX

Marian L. Tupy

Marian L. Tupy is the editor of HumanProgress.org and a senior policy analyst at the Center for Global Liberty and Prosperity.

This article was originally published on FEE.org. Read the original article.

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Thomas Paine, Champion of Sound Money

Thomas Paine, Champion of Sound Money

Between writing his well-known revolutionary liberal tracts Common Sense (1776) and The Rights of Man(1791), Thomas Paine contributed knowledgeably to a 1785-6 debate over money and banking in Pennsylvania. Paine defended the Bank of North America’s charter and its operations in a number of lengthy letters to Philadelphia newspapers during 1786, followed by a December monograph that summarized his case,Dissertations on Government; The Affairs of the Bank; and Paper Money.[1]
"The natural effect of increasing and continuing to increase paper currencies is that of banishing the real money."Paine argued that to repeal the bank’s charter violated both the rule of law and the maxims of sound economic policy. His writings show that he well understood the benefits of banking. Although proponents of the repeal accused Paine, publicly known to be in dire financial shape, of being paid by the BNA’s proprietors for defending it (one called him "an unprincipled author, who lets his pen out for hire"), Paine vociferously denied the charge, and historians (such as Philip S. Foner, who edited an anthology of Paine’s works), have found no evidence to support the accusation.
Prima facie evidence for Paine’s sincerity is found in his marshalling of serious arguments that were consistent with the classical liberal principles of his earlier writings.

Here’s the backstory: The Continental Congress chartered the Bank of North America, headquartered in Philadelphia and headed by Robert Morris and Thomas Willing in 1781. Considering a Commonwealth of Pennsylvania charter to be a sounder authorization, in 1782 the bank sought and received a charter from the Pennsylvania legislature. After the Revolutionary War’s end in 1783, as historian Janet Wilson noted, farmers in western Pennsylvania with large debts and tax arrears “set up a cry for paper money” to be issued by the Commonwealth.[2] These state-issued notes would not be presently redeemable, but would be receivable for future tax payments.

The clamor for irredeemable paper money, he wrote, derived from "delusion and bubble." The inflationists understandably saw the BNA as a barrier to their plan. If the bank valued the state paper below its par value, while BNA banknotes and checks traded at par in terms of the silver dollars for which they could be immediately redeemed, real demand for the state paper currency would be low. Better for the sake of state paper to eliminate the superior alternative. Hence, with the legislature voting to authorize an issue of state notes in mid-1785, the inflationists demanded repeal of the bank’s charter.

They were further motivated by the bank proprietors’ public opposition to state paper. The legislature debated and then repealed the charter in September 1785. The BNA continued to do business, on a smaller scale, under its 1781 charter from the Continental Congress. (The 1^st US Congress would not meet until March 1789.) Eighteen months after repeal, in March 1787, following a pitched public discussion and the election of pro-bank legislators in fall 1786, the charter was restored.

The clamor for irredeemable paper money, wrote Paine in 1786, derived from “delusion and bubble.”[3] Yes, the irredeemable paper currency issued during the war as a matter of necessity had provided revenue “while it lasted,” but not as a free lunch, but rather by taxing individual money-holders through price inflation and currency depreciation. Since its demise, “gold and silver are become the currency of the country.”[4] Those thinking that state paper will relieve a “shortage” of specie have it backwards: it is precisely the issue of irredeemable paper that drives out gold and silver. On this point Paine argued with impeccable Humean logic:

The pretense for paper money has been, that there was not a sufficiency of gold and silver. This, so far from being a reason for paper emissions, is a reason against them. As gold and silver are not the productions of North America, they are, therefore, articles of importation; and if we set up a paper manufactory of money it amounts, as far as it is able, to prevent the importation of hard money, or to send it out again as fast it comes in; and by following this practice we shall continually banish the specie, till we have none left, and be continually complaining of the grievance instead of remedying the cause. Considering gold and silver as articles of importation, there will in time, unless we prevent it by paper emissions, be as much in the country as the occasions of it require, for the same reasons there are as much of other imported articles.[5]

Critic of Monetary Stimulus
Paine understood that any stimulus from injecting money was only temporary, because issuing more paper money does not create any more wealth. He even offered the binge drinking / hangover analogy that has, in modern times, become commonplace:

Paper money is like dramdrinking, it relieves for a moment by deceitful sensation, but gradually diminishes the natural heat, and leaves the body worse than it found it. Were not this the case, and could money be made of paper at pleasure, every sovereign in Europe would be as rich as he pleased. But the truth is, that it is a bubble and the attempt vanity.[6]

State paper money became not just imprudent but unjust when it was combined with a legal tender law compelling the acceptance of depreciated paper dollars where a contract called for payment in silver or gold dollars:

As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. … [A]ll tender laws are tyrannical and unjust, and calculated to support fraud and oppression.[7]

For a legislator even to propose such a tyranny should be a capital crime [!]:

The laws of a country ought to be the standard of equity, and calculated to impress on the minds of the people the moral as well as the legal obligations of reciprocal justice. But tender laws, of any kind, operate to destroy morality, and to dissolve, by the pretense of law, what ought to be the principle of law to support, reciprocal justice between man and man: and the punishment of a member who should move for such a law ought to be death.[8]

Responding to an anti-BNA petition, which claimed that “the said bank has a direct tendency to banish a great part of the specie from the country, so as to produce a scarcity of money, and to collect into the hands of the stockholders of the said bank, almost the whole of the money which remains amongst us,” [387-8 n] Paine argued that the issue of immediately gold-redeemable banknotes gives a commercial bank like the BNA a strong reason to retain sufficient gold reserves:

Specie may be called the stock in trade of the bank, it is therefore its interest to prevent it from wandering out of the country, and to keep a constant standing supply to be ready for all domestic occasions and demands. … While the bank is the general depository of cash, no great sums can be obtained without getting it from thence, and as it is evidently prejudicial to its interest to advance money to be sent abroad, because in this case the money cannot by circulation return again, the bank, therefore, is interested in preventing what the committee would have it suspected of promoting. It is to prevent the exportation of cash, and to retain it in the country, that the bank has, on several occasions, stopped the discounting notes till the danger had been passed.[9]

Here Paine failed to add that the public’s voluntary substitution of banknotes for specie, although it does not banish any specie that is still wanted, does allow the payment system to conduct a given volume of payments more economically, with less specie. The ability to export the share of specie thus rendered redundant, in exchange for productive machines and material inputs, was a growth-enhancing benefit of banking that Adam Smith had emphasized in The Wealth of Nations published ten years earlier.

In response to the claim that the bank “will collect into the hands of the stockholders” the specie remaining in the country, Paine explained that a bank’s specie reserves are not the net worth owned by its shareholders. Rather the reserves are held to redeem its liabilities, and thus are “the property of every man who holds a bank note, or deposits cash there,” or otherwise has a claim on the bank.
The Bank of North America at the time held the first and as yet only bank charter granted by the legislature of Pennsylvania. Critics damned the BNA as a privileged monopoly. Legislator John Smiley asserted that the charter repeal “secured the natural rights of the people from invasion by monopolies.” This view – later echoed by the Jeffersonians and Jacksonians in their opposition to the First and Second Bank of the United States – is of course paradoxical.

The Cure for Monopoly Power
The cure for monopoly power created by exclusive charter (incorporation) is to grant charters freely, to go from one to a multiplicity of charters. It is not to go from one to zero charters. If more banks were free to enter but simply hadn’t yet, then the BNA was a monopolist only in the benign sense that the entrepreneur who creates a new market (thus expanding and not restricting trade) is the single seller until others arrive. Eventually additional chartered banks did enter the Pennsylvania market: the (First) Bank of the United States (chartered by the US Congress) in 1791, and the Bank of Pennsylvania (state-chartered) in 1793.

In a later work criticizing the Bank of England (which did have an exclusive charter to issue banknotes as a corporation), Paine unfortunately seemed to blur the distinction between banknotes and irredeemable paper money. He made the valid point that banknotes held, unlike gold held, are not net national wealth (because they are liabilities of the issuer). Then he declared:

the rage that overran America, for paper money or paper currency, has reached to England under another name. There it was called continental money, and here it is called bank notes. But it signifies not what name it bears, if the capital is not equal to the redemption. … The natural effect of increasing and continuing to increase paper currencies is that of banishing the real money. The shadow takes place of the substance till the country is left with only shadows in its hands.[10]

To reconcile this passage with his previous writings, we must suppose that Paine is not criticizing banknotes in general, but the Bank of England in particular for holding inadequate reserves relative to its growing note-issue.

But this raises the question: Why would the BOE want to hold inadequate reserves when the BNA (as he had argued) did not? Paine might have explained this (but unfortunately did not) by Parliament’s implicit guarantee that it would not penalize the BOE for a suspension of payments, giving the Bank a moral-hazard incentive to skimp on reserves. When the Bank of England did suspend payments in 1797, forced by a run on the bank prompted by the threat of an invasion by Napoleon’s troops, Parliament did in fact immunize the Bank against note-holder lawsuits. Paine ten years ahead warned that the BOE might suspend in 1796, which was only one year off if we consider it a prediction:

A stoppage of payment at the bank is not a new thing. Smith in his "Wealth of Nations," book ii. chap. 2, says, that in the year 1696, exchequer bills fell forty, fifty and sixty per cent; bank notes twenty per cent; and the bank stopped payment. That which happened in 1696 may happen again in 1796.[11]

To be clear, Paine anticipated trouble from the growing British public debt, not from threat of invasion. But the two were not unrelated.
____________
[1] Most of the quotations from Paine below come from this monograph as reprinted in Philip S. Foner, ed., The Collected Works of Thomas Paine, vol. 2, which is available online here.
[2] Janet Wilson, “The Bank of North America and Pennsylvania Politics: 1781-1787,” The Pennsylvania Magazine of History and Biography 66 (Jan., 1942), pp. 3- 28; available here.
[3] Letter to the Pennsylvania Packet, April 4, 1786; in Collected Works II, p. 419.
[4] Letter to the Abbe Raynal (1782) in Collected Works II, pp. 229, 230.
[5] Dissertations on Government (1786), in Collected Works II, p. 407.
[6] Ibid.
[7] Ibid., pp. 407, 409.
[8] Ibid., p. 408.
[9] Ibid., pp. 391-2.
[10] Paine, “Prospects on the Rubicon” (1787), Collected Works II, pp. 636-7.
[11] Ibid., pp. 663-4.

This piece originally appeared on the Alt-M blog

Larry White

Lawrence H. White is a senior fellow at the Cato Institute, and professor of economics at George Mason University since 2009. An expert on banking and monetary policy, he is the author of The Clash of Economic Ideas (Cambridge University Press, 2012), The Theory of Monetary Institutions (Basil Blackwell, 1999), Free Banking in Britain (2nd ed., Institute of Economic Affairs, 1995), and Competition and Currency (NYU Press, 1989).

This article was originally published on FEE.org. Read the original article.

Early Socialist Communities by John A. Ryan 1913

Socialistic Communities by John A. Ryan (The Catholic Encyclopedia) 1913

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This title comprehends those societies which maintain common ownership of the means of production and distribution, e. g., land, factories, and stores, and also those which further extend the practice of common ownership to consumable goods, e. g., houses and food. While the majority of the groups treated in the present article are, strictly speaking, communistic rather than socialistic, they are frequently designated by the latter term. The most important of them have already been described under Communism. Below a more nearly complete list is given, together with brief notices of those societies that have not been discussed in the former articles. At the time of the Protestant Reformation certain socialistic experiments were made by several heretical sects, including the Anabaptists, the Libertines, and the Familists; but these sects did not convert their beliefs along this line into practice with sufficient thoroughness or for a sufficient length of time to give their attempts any considerable value or interest (see Kautsky, "Communism in Central Europe at the Time of the Reformation", London, 1897).

The Labadists, a religious sect with communistic features, founded a community in Westphalia, in 1672, under the leadership of Jean de la Badie, an apostate priest. A few years later about one hundred members of the sect established a colony in Northern Maryland, but within half a century both communities ceased to exist.

The Ephrata (Pennsylvania) Community was founded in 1732, and contained at one time 300 members, but in 1900 numbered only 17.

The Shakers adopted a socialistic form of organization at Watervliet, New York, in 1776. At their most prosperous period their various societies comprised about 5000 persons; to-day (1911) they do not exceed 1000.

The Harmonists, or Rappists, were established in Pennsylvania in 1805. Their maximum membership was 1000; in 1900 they numbered 9. Connected with this society is the Bethel Community, which was founded (1844) in Missouri by a group which included some seceders from Harmony. In 1855 the Bethel leader, Dr. Keil, organized another community at Aurora, Oregon. The combined membership of the two settlements never exceeded 1000 persons. Bethel dissolved in 1880 and Aurora in 1881.

The Separatists of Zoar (Ohio) were organized as a socialistic community in 1818, and dissolved in 1898. At one time they had 500 members.

The New Harmony Community, the greatest attempt ever made in this form of social organization, was founded in Indiana in 1824 by Robert Owen. Its maximum number of members was 900 and its length of life two years. Eighteen other communities formed by seceders from the New Harmony society were about equally short-lived. Other socialistic settlements that owed their foundation to the teachings of Owen were set up at Yellow Springs, Ohio; Nashoba, Tennessee (composed mostly of negroes); Haverstraw, New York; and Kendal, Oregon. None of them lasted more than two years.

The Hopedale (Massachusetts) Community was organized in 1842 by the Rev. Adin Ballon; it never had more than 175 members, and it came to an end in 1857.

The Brook Farm (Massachusetts) Community was established in 1842 by the Transcendentalist group of scholars and writers. In 1844 it was converted into a Fourierist phalanx; this, however, was dissolved in 1846.

Of the Fourieristic phalanges two had a very brief existence in France, and about thirty were organized in the United States between 1840 and 1850. Their aggregate membership was about 4500, and their longevity varied from a few months to twelve years. Aside from the one at Brook Farm, the most noteworthy were: the North American phalanx, founded in 1843 in New Jersey under the direction of Greeley, Brisbane, Channing, and other gifted men, and dissolved in 1855; the Wisconsin, or Cresco, phalanx, organized in 1844, and dispersed in 1850; and the Sylvania Association of Pennsylvania, which has the distinction of being the earliest Fourieristic experiment in the United States, though it lasted only eighteen months.

The Oneida (New York) Community, the members of which called themselves Perfectionists because they believed that all who followed their way of life could become perfect, became a communistic organization in 1848, and was converted into a jointstock corporation in 1881. Its largest number of members was 300.

The first Icarian community was set up in Texas in 1848, and the last came to an end in 1895 in Iowa. Their most prosperous settlement, at Nauvoo, numbered more than 500 souls.

The Amana Community was organized on socialistic lines in 1843 near Buffalo, New York, but moved to Amana, Iowa, in 1845. It is the one communistic settlement that has increased steadily, though not rapidly, in wealth and numbers. Its members rightly attribute this fact to its religious character and motive. The community embraces about 1800 persons.

A unique community is the Woman's Commonwealth, established about 1875 near Belton, Texas, and transferred to Mount Pleasant, D. C., in 1898. It was organized by women who from motives of religion and conscience had separated themselves from their husbands. As the members number less than thirty and are mostly those who instituted the community more than thirty-five years ago, the experiment cannot last many years longer.

The most important of recently founded communities was the Ruskin Co-operative Colony, organized in 1894 in Tennessee by J. A. Wayland, editor of the socialist paper, "The Coming Nation". While the capital of the community was collectively owned, its products were distributed among the members in the form of wages. Owing to dissensions and withdrawals, the colony was reorganized on a new site in 1896, but it also was soon dissolved. About 250 of the colonists moved to Georgia, and set up another community, but this in a few years ceased to exist.

A number of other communities have been formed within recent years, most of which permit private ownership of consumption-goods and private family life. As none of them has become strong either in numbers or in wealth, and as all of them seem destined to an early death, they will receive only the briefest mention here. Those worthy of any notice are: The Christian Commonwealth of Georgia, organized in 1896, and dissolved in 1900; the Cooperative Brotherhood, of Burley, Washington; the Straight Edge Industrial Settlement, of New York City; the Home Colony in the State of Washington, which has the distinction of being the only anarchist colony; the Mutual Home Association, located in the same state; the Topolambo Colony in Mexico, which lasted but a few months; and the Fairhope (Alabama) Single-Tax Corporation, which has had a fair measure of success, but which is neither socialistic nor communistic in the proper sense.

- Reviewing the history of socialistic experiments, we perceive that only those that were avowedly and strongly religious, adopting a socialistic organization as incidental to their religious purposes, have achieved even temporary and partial success. Practically speaking, only two of these religious communities remain; of these the Shakers are growing steadily weaker, while the Amana Society is almost stationary, and, besides, is obliged to carry on some of its industries with the aid of outside hired labor.

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Celebrate Capital on Labor Day

Celebrate Capital on Labor Day – Reed’s Feed

A weekly roundup of thoughts on the passing scene by FEE president Lawrence W. Reed.

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“If all the cars in the United States were placed end to end,” some wise guy once said, “it would probably be Labor Day weekend.” Only a dozen days to spare before that last fling of the summer, here are some thoughts to help you get intellectually prepared.

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The old, fallacious labor theory of value plagued economic thinking for centuries. Not even Adam Smith got it right. It was the Austrian economists beginning with Carl Menger in 1871 who revealed that value is personal and subjective, not a function of work hours. When deciding on what a thing is worth, each actor in the market place asks himself, “What will it do for me?” not “How much time and muscle power did you spend on it?” In this 2015 article, economist Steven Horwitz explained how a century and a half since Menger, we’re still “haunted” by an age-old error.

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The exploitation of child labor, proclaim the socialists, stands as an especially damning indictment of capitalism and capitalists. Never mind the fact that before capitalism and its Industrial Revolution, most children died before the age of five. Those who survived worked longer and harder in generally more deplorable conditions than would be the case after market-produced technology and abundance rescued them.
Even today, as economist Ben Powell explains in this interview, the much-maligned “sweatshops” of the world are accomplishing more good than the efforts to ban them. For a further historical perspective, see my own essay on child labor in 19th Century Britain. And for a more recent, inspirational story on child labor, check out this piece from Mike Reid about a young Nigerian named Rocky.

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In public high school, I learned from Upton Sinclair’s The Jungle that greedy capitalists not only poisoned their customers with tainted meat but ran roughshod over their workers in the meat packing plants as well, evening grinding a few of them up into sausage. But later, when I was old enough to learn facts instead of propaganda, I discovered that Sinclair cooked it all up.

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For the first time since passage of the federal Taft-Hartley Act in 1947, a majority of the 50 states are governed by “Right-to-Work” (RTW) laws. West Virginia became the 26th RTW state a few months ago. While organized labor paints RTW as a heinous injustice against working people, it doesn’t ban unions. It simply declares that no person can be compelled to join or pay dues to a labor organization as a condition of employment.

Unions must persuade, not coerce, workers to participate, which makes them more accountable and responsible. As the Center for Union Facts explains, “big unions have opposed employee rights, engaged in self-dealing and corruption, and made excessive demands that have killed tens of thousands of jobs and driven major cities into bankruptcy.” Where union representation is compulsory, union leaders charge their membership more for an often-dubious service and pay themselves more for the task.

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Finally, it would behoove all of us to celebrate labor, not compulsory unions, for our standard of living. But that ain’t all. There was a lot of labor in ancient Egypt, building pyramids for the Pharoahs. All those long hours and copious sweat didn’t translate into living standards for the average worker and unions wouldn’t have made much difference. What makes labor so productive today is the application of capital, a point I made in this piece that deserves dusting off again for yet another Labor Day:

Happy Capital Day!

Any good economist will tell you that as complementary factors of production, labor and capital are not only indispensable but hugely dependent upon each other as well.
Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan.
Capital can refer to either the tools of production or the funds that finance them. There may be no place in the world where there’s a shortage of labor but every inch of the planet is short of capital.
There is no worker who couldn’t become more productive and better himself and society in the process if he had a more powerful labor-saving machine or a little more venture funding behind him. It ought to be abundantly clear that the vast improvement in standards of living over the past century is not explained by physical labor (we actually do less of that), but rather to the application of capital.
This is not class warfare. I’m not “taking sides” between labor and capital. I don’t see them as natural antagonists in spite of some people’s attempts to make them so. Don’t think of capital as something possessed and deployed only by bankers, the college-educated, the rich, or the elite. We workers of all income levels are “capital-ists” too—every time we save and invest, buy a share of stock, fix a machine, or start a business.
And yet, we have a “Labor Day” in America but not a “Capital Day.”
Perhaps subconsciously, Americans do understand to some extent that those who invest and deploy capital are important. After all, most people would surely have an easier time naming the “top ten capitalists” in our history than the “top ten workers.” We take pride in the kids in our neighborhoods when they put up a sidewalk lemonade stand. President Obama continues to be roundly excoriated for his demeaning remark, “You didn’t build that; somebody else made that happen.”
That’s not to say there aren’t bad eggs in the capitalist basket. Some use political connections to get special advantages from government. Others cut corners, cheat some customers or pollute a stream. But those are the exception, not the rule, in a society that values character. Workers are not all saints either—who among us doesn’t know of one who stole from his employer, called in sick when he wasn’t, or abused the disability or unemployment compensation rules? Those exceptions shouldn’t diminish the importance of work or the nobility of most workers.
Like most Americans, I’ve traditionally celebrated labor on Labor Day weekend—not organized labor or compulsory labor unions, mind you, but the noble act of physical labor to produce the things we want and need. Nothing at all wrong about that!
But this year on Labor Day weekend, I’ll also be thinking about the remarkable achievements of inventors of labor-saving devices, the risk-taking venture capitalists who put their own money (not your tax money) on the line and the fact that nobody in America has to dig a ditch with a spoon or cut his lawn with a knife. Indeed, what could possibly be wrong about having a “Capital Day” in odd numbered years and a “Labor Day” in the even-numbered ones?
Labor Day and Capital Day. I know of no good reason why we should have just one and not the other.

Lawrence W. Reed

Lawrence W. Reed is President of the Foundation for Economic Education and the author of the forthcoming book, Real Heroes: Inspiring True Stories of Courage, Character and Conviction. Follow on Twitter and Like on Facebook.

This article was originally published on FEE.org. Read the original article.

Great Libertarian Novels That Aren't Atlas Shrugged (Audio)

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Great Libertarian & Minarchist Quotes

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# If you are not outraged you are not paying attention – Unknown

# Socialists like to tout their confiscation and redistribution schemes as noble and caring, but we should ask if theft is ever noble or caring. – Robert Hawes

# The greatest gift of freedom is that it allows us to govern ourselves, and the greatest burden of freedom is that it requires us to govern ourselves. – Robert Hawes

# A great danger that we face in our modern world is to get so caught up in the pursuit of the blessings that freedom has given us that we come to take freedom itself for granted, and thus fail to see to its maintenance. – Robert Hawes

# Everyone is entitled to his own opinion, but not his own facts. – Daniel Patrick Moynihan

# The Constitution was made to guard the people against the dangers of good intentions. – Daniel Webster

# Profit is a signal that valuable services are being rendered to people on a voluntary basis. – Lew Rockwell

# Subsidies create more of whatever is being subsidized. – Lew Rockwell

# 98% of Americans support the use of mass transit by others. – The Onion (satire newspaper)

# You don’t need a degree in political science to know what freedom is. – Andrew Wiegand

# Eternal vigilance is the price of liberty. – Thomas Jefferson

# As our rights fade out, we accept perpetual war for perpetual peace, the two parties fuse into one, and the government becomes more powerful than at any time in our history. – Kevin Maley

# Even the lion has to defend himself against flies. – Anonymous

# The fact is that the average man’s love of liberty is nine-tenths imaginary, exactly like his love of sense, justice and truth. Liberty is not a thing for the great masses of men. It is the exclusive possession of a small and disreputable minority, like knowledge, courage and honor. It takes a special sort of man to understand and enjoy liberty – and he is usually an outlaw in democratic societies. – H.L. Mencken, Baltimore Evening Sun, Feb. 12, 1923

# Expecting the government to fight the deficit is like expecting the Mafia to fight crime. – Anonymous

# Freedom is still the most radical idea of all. – Anonymous

# At the day of judgment we shall not be asked what we have read but what we have done. – Thomas A Kempis

# Have no fear. The next President will promise not to raise taxes. – Anonymous

# Old MacDonald had an agricultural real estate tax abatement. – Anonymous

# Space has no beginning or end and goes on to infinity with no limits! Like taxes, but on a much smaller scale. – Anonymous

# Syntax? Why not, they tax everything else. – Anonymous

# Taxes are not for the benefit of the taxed. – Anonymous

# Taxpayers don’t have to take a civil service exam to work for the government. – Anonymous

# The chief purpose of government it to perpetuate the government. – Anonymous

# The politicians’ three R’s: this is Ours, that is Ours, everything is Ours. – Anonymous

# Things happen the day you decide you’re going to make them happen. – Pam Lontos

# Under capitalism man exploits man; under socialism the reverse is true. – Anonymous

# Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents? – Anonymous

# Publics schools are institutions of coercion. Students are coerced to attend them. Parents are coerced to pay for them. – Gary Reed

# A proliferation of new laws creates a proliferation of new loopholes.

# A thing is not necessarily true because a man dies for it. – Oscar Wilde

# Any system that takes responsibility away from people, dehumanizes them.

# Bad law is more likely to be supplemented than repealed.

# Being right is seldom enough. Even the best ideas must be packaged and sold.

# What the government is good at is collecting taxes, taking away your freedoms and killing people. It’s not good at much else. – Tom Clancy on Kudlow and Cramer 9/2/03

# The majority of Americans get their news and information about what is going on with their government from entities that are licensed by and subject to punishment at the hands of that very government. – Neal Boortz

# What the government gives, it must first take away. – John S. Coleman

# With respect to the words “general welfare,” I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators. – James Madison

# You can no more win a war than you can win an earthquake. – Jeannette Rankin

# I don’t know the key to success, but the key to failure is trying to please everybody. – Bill Cosby

# Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction. – E. F. Schumacher

# We can’t all be heroes because somebody has to sit on the curb and clap as they go by. – Will Rogers

# The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts. – Bertrand Russell

# Well, if crime fighters fight crime and fire fighters fight fire, what do freedom fighters fight? They never mention that part to us, do they? – George Carlin

# The problem with political jokes is they get elected. – Henry Cate VII

# Those who corrupt the public mind are just as evil as those who steal from the public purse. – Adlai E. Stevenson

# No snowflake in an avalanche ever feels responsible. – Stanislaw J. Lec

# A problem well stated is a problem half solved. – C.F. Kettering

# I don’t have any solution, but I certainly admire the problem. – Ashleigh Brilliant

# The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite.” – Thomas Jefferson

# The system of private property is the most important guaranty of freedom, not only for those who own property, but scarcely less for those who do not. – Friedrich A. Hayek, in “The Road to Serfdom”

# The fatal flaw in socialism is twofold: first, the conceit inherent in the desire to plan the lives of others; second, the force necessary to impose that plan on unwilling subjects. This is not a formula for freedom but for tyranny. – Jim Peron in The Ideals of Tyranny

# Remember that the key words in the sentence “I want to help you” is “I want”. – G James

# Liberty is born of self-interest. It effects goodwill to all through its practice, and it generates goodwill in everyone as a consequence. – Richard Rieben

# If voting made a difference, they would make it illegal. – Donal Scannell, at the Conference on World Affairs, Boulder CO, 4/6/04

# In almost all matters, the real question should be: why are we letting government handle this? – Harry Browne

# The root source of wealth is human ingenuity. This has no known bounds, so the amount of wealth in existence can always be increased. That’s why capitalism is called “making money”. – Marc Geddes

# I’d rather live free with some peril than be a protected slave of government. – Dave Duffy

# Democracy is not a system of liberty, but a form of tyranny: the tyranny of the majority. – Robert Garmong

# A hallmark of democracy is pressure-group warfare, as each group seeks to claim the status of a majority and exploit all the rest. – Robert Garmong

# It makes no difference, in principle, if this “collective will” is divined by the edicts of a dictator or by majority vote – so long as the rights of the individual may still be sacrificed. – Robert Garmong

# Individualists unite! – Treveor Sutherland, Hamilton County TN LP Chairman

# The government that we gave limited power to – to protect our rights – has grown into a hideous behemoth that continually increases its power and now enslaves the people, and causes strife throughout the world. – Tom Parker

# Those are my principles. If you don’t like them, I have others. – Groucho Marx

# Many say that since all the signers of the Constitution were Christian, this is a Christian country. However, they were all white males as well. Are we a White Male Country? – “bostnfound”, in a Free State Project forum, 7/04

# Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances. – Thomas Jefferson

# Most people … aren’t just ignorant or stupid: they genuinely prefer government control of their own and their neighbors’ lives. We can hand out flyers for the rest of our lives, publish as many books as we like, make speeches until we’re blue in the face, and most of them aren’t going to change their minds. While they disagree among themselves about the details, authoritarians of one sort or another constitute an overwhelming majority. – Max Orhai, Liberty Magazine, 6/04, page 23

# Benevolence comes from within as a reflection of our personal, individual sense of well-being. To force it, externally – through moral intimidation (altruism), social intimidation (duty), or at the point of a gun (legislation) – debilitates our personal sense of well-being and negates the source of benevolence. – Richard Rieben (4/7/04)

# It is our true policy to steer clear of entangling alliances with any portion of the foreign world. The great rule of conduct for us in regard to foreign nations is, in extending our commercial relations, to have with them as little political connection as possible. – George Washington

# I can now comprehend the fact that there is no possibility of freedom in this Country. It’s too late. Call me a bad American, but I am ashamed and hang my head low when I think of what America has become. … The experiment is over, freedom lost, tyranny won. – Mike Wasdin, 9/7/04

# Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government. – James Madison

# Unlike the world of free-markets, in political government when some individuals win, other individuals lose. – Robert Klassen, 10/3/02

# When a majority rules, a minority is ruled. – Robert Klassen, 10/3/02

# The price of a “free” public education is freedom. – Capitalism.org

# All wars are fought over one premise; my god is better than yours. – Mike Wasdin

# Borrow, spend, tax and … promise, promise, promise is the formula for a long and successful political career. – Hal O’Boyle

# We get to go to the polls every couple of years and choose between two flavors of the same gruel. The inmates get to elect the guards. Then, having exercised our rights as free citizens of a great social democracy, we go back to obeying orders. – Hal O’Boyle

# The government says: You are free to do anything we want. – Anonymous

# The political ballot box stands for – willingness to be ruled by somebody other than yourself. – Alvin Lowi, Jr.

# If voting could change things, it would be illegal. – Unknown

# Intaxication: Euphoria at getting a refund from the IRS, which lasts until you realize it was your money to start with. – Unknown

# The next time some academics tell you how important “diversity” is, ask how many Republicans there are in their sociology department. – Thomas Sowell

# To protect us from terrorists our government treats us like terrorists. Hal O’Boyle

# Government failure is always used as an excuse for government expansion. Government thrives on crisis and incompetence. – Jim Babka of DownsizeDC.org

# Politics is a strife of interests masquerading as a contest of principles. – Ambrose Bierce

# If we all stop voting, will they just go away? – Bumper Sticker

# The price of empire is terrorism. – Greenbacks

# We have been living amidst one of the great revolutions of human history, and we hardly know it: the penetration of the State into every aspect of human life and society. Some people regard this as good and “progressive,” others regard it as tyrannical; but either way, it’s a fact, a transformation as great as, say, the Industrial Revolution. Absolutely nothing is now beyond the scope of State power. – Joseph Sobran

# A limited government is a contradiction in terms. – Robert LeFevre, The Fundamentals of Liberty

# The most destructive thing governments do is divide people against each other, all in competition over the reins of the state. – Anthony Gregory

# The war on “terror” will never be over, it will just change locations. Like the war on drugs, prostitution, pornography, and the many others that will follow, it is a war on humanity. These wars will never be won; the State will just keep creating new boogiemen to frighten us with. The sheep will anxiously anticipate the next fall guy the State offers up as a sacrifice for the war on whatever happens to be next. Be careful, the next pawn could be me or you. – Mike Wasdin

# Vows made in a storm are forgotten in calms. – Old English saying

# If the Tenth Amendment were still taken seriously, most of the federal government’s present activities would not exist. That’s why no one in Washington ever mentions it. – Thomas E. Woods, Jr. in The Policitally Incorrect Guide to American History

# A country that goes out of its way to imprison the innocent has no business preaching democracy to the world. – Paul Craig Roberts

# The problem is that democracy is not freedom. Democracy is simply majoritarianism, which is inherently incompatible with real freedom. Our founding fathers clearly understood this. – Rep. Ron Paul in Democracy Is Not Freedom

# Popular suffrage is in itself no guarantee of freedom. People can vote themselves into slavery. – Frank Chodorov

# There’s small choice in rotten apples. – William Shakespeare

# How to obtain freedom has been, and is, mankind’s most important quest. – John A Pugsley, intro to “None of the Above”.

# A democracy is rule by the majority; a republic is the rule of law. This is a very critical distinction. – Steven LaTulippe

# Voting is the opiate of the masses. – Steven LaTulippe

# As the state grows, one’s sense of self-ownership is destroyed, liberty is traded for “security,” the human spirit diminishes, and the citizenry increasingly thinks and behaves like dependent children. – Eric Englund in Income Taxes, Obesity, and Other Maladies of Nanny Statism

# To shackle future generations, with such monstrous debt and liabilities [$50 trillion+ of unfunded federal liabilities], is tantamount to selling them into tax slavery. – Eric Englund in Income Taxes, Obesity, and Other Maladies of Nanny Statism 2/28/05.

# We cannot restore traditional American freedom unless we limit the government’s power to tax. No tinkering with this, that, or the other law will stop the trend toward socialism. We must repeal the Sixteenth Amendment. – Frank Chodorov in The Income Tax: Root of all Evil

# Government is force, and politics is the process of deciding who gets to use it on whom. This is not the best way to solve problems. – Richard Grant, The Incredible Bread Machine, 1999

# The good governor should have a broken leg and keep at home. – Cervantes

# A man is none the less a slave because he is allowed to choose a new master once in a term of years. – Lysander Spooner

# People do not walk barefoot because there are no government shoe factories. – Anonymous

# What difference is it to me if a decision is forced upon me by a dictator or by half of my neighbors? Either way my right to free, peaceful action has been nullified. – Stephen H. Foerster

# An anarchist is anyone who believes in less government than you do. – Robert LeFevre

# You don’t need a treaty to have free trade. – Murray Rothbard

# Public schools are government-established, politician- and bureaucrat-controlled, fully politicized, taxpayer-supported, authoritarian socialist institutions. In fact, the public-school system is one of the purest examples of socialism existing in America. – Thomas L. Johnson

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Robert Owen: The Woolly-Minded Cotton Spinner

Robert Owen: The Woolly-Minded Cotton Spinner

_{Mr. Barger is a corporate public relations executive and writer in Toledo, Ohio.}

_{The nearby Wabash river must have seemed symbolically reassuring to Robert Owen on the day he arrived in Harmony, Indiana in late 1824 to launch the millennium.}

_{It had been on another river, the Clyde in Scotland, that Owen became rich and famous as the director of the New Lanark cotton spinning mills. Here at Harmony, on the Wabash, he was about to establish a community that would become a beacon for all mankind. For too long, in Owen’s view, the world had been in bondage to the sins of individualism and self-interest. He had a better way, a way of cooperation and sharing. New Harmony, the name he gave the village after purchasing it early in 1825, would direct the world to this new way by its successful example.}

_{But as students of American history know, Owen’s millennium never came. New Harmony was a colossal failure that consumed at least four-fifths of his fortune and destroyed his reputation as an astute businessman. Far from proving that individualism and self-interest could be eradicated, New Harmony revealed perverse and virulent forms of both traits. Hailed as a new beginning in cooperation, the community of 900 persons on the Wabash was characterized by bickering and dissension almost from the start. Established as a new social order that would bring economic security, the village quickly fell behind in crop production and ordinary maintenance tasks were neglected. Proclaimed as the model for a system that would usher in a new era, Owen’s village was copied only briefly by other communistic societies in America and was then abandoned. As a venture that was supposed to spark the millennium, New Harmony was a total failure.}

_{Oddly enough, however, the New Harmony debacle may have been the high point of Robert Owen’s life, because it won him a place in American history and created a heightened interest in "Owenism," the brand of socialism he espoused. Unfortunately, neither Robert Owen nor his followers learned the lessons that New Harmony could have taught them, and much of the "democratic socialism" that is now practiced in the Western world reflects the same fuzzy thinking that destroyed Owen’s model community. We are still paying for Owen’s folly and for the failure to understand the contradictions of Owenism.}

_{Why did the New Harmony venture fail? It certainly had everything going for it. The community was actually a going concern with good buildings, cultivated lands and orchards, and afair amount of livestock when Owen purchased it from a German religious sect called the Rappites. It could have had good leadership, because Owen was wealthy and had proved himself a capable manager. The New Harmony movement also had wide support in the new American nation, and Owen had even been given an audience with President-elect John Quincy Adams and the Secretary of the Treasury when he arrived in Washington. There was a kindly tolerance of new ideas, and if New Harmony had been a sound and workable system, the United States had both the political freedom and the available land for thousands of such communal enterprises. Then or now, nothing in the fundamental American idea was opposed to the socialistic communities of the early 19th century, since they were voluntary arrangements and used peaceful means. So why didn’t New Harmony become – as Owen hoped it would – the seed colony of a new social order for the country and the world?}

_{How Allocate Resources?}

_{The seed colony didn’t reproduce because the problems that undermined New Harmony are essentially the same problems that bedevil every social democratic country in the world, including the present-day United States. Using strictly voluntary, peaceful means, how do you obtain human cooperation and allocate resources in a socialistic society ? How do you convince the most productive workers that they should keep on producing when everybody, including the idler and the incompetent, is rewarded equally? How do you decide what is to be produced? Or who is to have what job? Who should do the saving to provide investment funds? How can you exchange goods and services in a fair and equitable manner? These are tough, common-sense questions, and they weren’t answered satisfactorily at New Harmony. So far, the democratic socialists haven’t really answered them either. Socialists are either forced to yield to the requirements of the marketplace, because of their love of freedom, or to move towards the totalitarianism of the Marxist-Leninist camp, because of their blind love of socialism. Both actions are a tacit admission that democratic socialism doesn’t work.}

_{In Owen’s case, he made no compromises with reality, since he was basically rigid in his outlook and was not capable of altering most of his views. Early in his adult life, he had developed a distaste for individualism and competition, although he was in many ways a gifted individual who could easily compete with others. He wasalso a man of deep humanitarian instincts, and he would have abhorred the brutal socialism of modern Russia and China. Beyond that, however, he was dogmatic and single-minded. Macaulay regarded him as a "gentle bore" and he was said not to have thought differently of a book for having read it. In other words, Owen was in- some ways insensitive to the realities of human nature and did not learn a great deal either from study or from experience. Yet he was an outstanding person of great ability, a high achiever in what would later be the Horatio Alger, Jr. tradition.}

_{A Successful Businessman}

_{Owen was born in Newton, Wales on May 14, 1771, and grew up under circumstances that seem severe by modern standards but were important in shaping his philosophy and life’s goals. Unlike some advocates of social change -Karl Marx, for example – Owen was a happy and successful man who had no personal reasons to resent the economic system of his day. Although he began his working career as an apprentice at age 10 without pay for the first year, his abilities were such that he had become a manager of a cotton mill at age 18 and within two years was able to demand and obtain a responsible position at the then handsome salary of 300 pounds yearly. He soon became well known in the British cotton spinning industry, and in 1799 he purchased an interest in a group of mills at New Lanark, Scotland. He became world famous as a result of the success of his enlightened policies in running the New Lanark mills.}

_{Owen was born at the right time and landed in the right place for the kind of business success he was to enjoy. The mechanization of the cotton spinning arts was in full swing in the late 18th century, and was presenting excellent commercial opportunities for large profits and rapid growth. It was also an ideal opportunity for a person such as Owen who had considerable management skills but, at the outset, little capital.}

_{Owen’s adult life can be divided into several periods of interest and activity. During his first 13 years at New Lanark, he was occupied with the problems of running the mills and bringing about improvements in the educational system and working conditions for the people employed in the mill. As he became wealthier and acquired national prominence, he began to speak out on social conditions and was soon producing the first of many essays outlining the program that eventually became known as Owenism. He was associated with the New Lanark mills until 1828, but long before that the promulgation of his social program had become his chief interest.}

_{With the closing of the long Napoleonic wars in 1815 and a sudden dropoff in demand, England went through a depression. Alarmed because of widespread unemployment, a committee of nobles and other leaders sought advice from manufacturers on ways of dealing with the problem. Owen proposed the development of Villages of Cooperation – the self-sustaining community idea that became the blueprint for New Harmony.}

_{New Harmony}

_{Owen thought that an ideal community such as a Village of Cooperation would bring out the best in people and put an end to competitiveness and other traits which he saw as social evils. He decided to prove this when he purchased the Harmonie (Harmony) settlement in 1825 from the Rappites. He renamed the community New Harmony and issued an open invitation to persons who might choose to affiliate with the settlement. But the venture was characterized by friction and indecision from the start, and by 1828 Owen withdrew most of his support, though retaining title to the property. His financial losses were so great that Mrs. Owen, who had not accompanied her husband to America, was forced to move out of their large mansion into smaller quarters.}

_{Owen unsuccessfully attempted to persuade the Mexican government to sponsor a community similar to New Harmony. He then returned to England and spent the rest of his life advocating social reforms. He was associated with another community venture in England, but like New Harmony, it was also shortlived. He experimented with a Labour Exchange, a sort of tradesmen’s cooperative to which individuals would bring articles in exchange for notes in lieu of currency. The exchange soon failed. Owen also led a massive union movement in England in the 1830s, but this collapsed within a few months. For the remainder of his life, Owen continued to publicize his social theories. But he had lost most of his influence by 1834. He spent his last five remaining years as a devotee of spiritualism, and believed himself to be in contact with famous persons who had passed on. At age 86, he wrote his autobiography, a book that is surprisingly lucid and carries important sections outlining the basic tenets of Owenism. He died at 87.}

_{Robert Heilbroner described Owen as "a strange mixture of practicality and naiveté, achievement and fiasco, common sense and madness." We are not accustomed to such "strange mixtures" most of the time. Actually, however, Owen’s behavior was contradictory only to those who lacked his view of matters, which he was to call "a new view of society." He always knew what he was doing and had supreme confidence in himself. He perceived a certain kind of role for himself and lived up to it.}

_{Guiding Principles}

_{Throughout his adult life, Owen was guided by three obsessive beliefs about himself and mankind which were to influence almost everything he did. Many of Ow-en’s actions will appear stupid and contradictory to the person who does not understand Owen’s motivations and attitudes. In fact, however, Owen was an unusually consistent person. He almost always behaved in accordance with his fundamental beliefs. It was his consistency, in fact, that may have led to his downfall on some occasions.}

_{What were the three guiding elements in Owen’s life? First of all, he was committed to a form of humanitarianism, and was certainly humane in his desire to seek a better life for all and to put an end to wretched social conditions and human suffering. He loved people, although in a way that some persons may have felt demeaning and patronizing. He was kindly and gentle, and it is virtually impossible to find an instance in which Owen exhibited spite, vindictiveness, jealousy, or greed. He had a friendly manner that others found attractive. His writing also had a warm, friendly tone, and his criticisms were usually carefully phrased when they involved specific persons.}

_{The second guiding force in Owen’s life was messianism and a belief in the eventuality of an earthly millennium. Yet he was openly anti-religious. He saw himself in a messianic role with a personal responsibility for causing the millennium (i.e., a New Moral Order) to come to pass. Had Owen been merely a humanitarian without a messianic mission, he probably would have ended his days as the genial director of the New Lanark mills. But he was not content with relative progress. He was able to prove at New Lanark that considerate treatment of employees and a general interest in improving employees’ well-being is also compatible with good business. But such improvements were too slow for the transformation that he believed was needed. He wanted to take dramatic and effective action that would quickly transform the world and bring about the glorious millennium. It was this messianic mission – and belief in millennialism – that took him from New Lanark to New Harmony.’}

_{Determined by Environment}

_{The third guiding belief in Owen’s life was determinism. He was unqualifiedly deterministic, and seems to have been almost completely committed to the belief that individuals are shaped by their conditions and their environment. He gave some weight to heredity, but devoted most of his attention to conditions. He was openly critical of individualism and seemed to be unwilling to admit that certain persons were capable of rising above the conditions imposed on them by society (even though he had !). Owen was dogmatic in stating his belief in the proposition that individuals are shaped by their environment.}

_{In the first essay in A New View of Society, Owen stated a fundamental principle which expressed his determinism and also became the rationale for many of his plans. This principle was restated frequently in Owen’s writings and has been considered typically Owen by his biographers. The principle is:}

_{Any general character, from the best to the worst, from the most ignorant to the most enlightened, may be given to any community, even to the world at large, by the application of proper means; which means are to a great extent at the command and under the control of those who have influence in the affairs of men.²}

_{Owen’s determinism, like his messianism, also helped take him out of New Lanark and into a wider world of social action. Had he not been basically determinist in his outlook, he might have been able to see some of the pitfalls in his plans for Villages of Cooperation. As a practical businessman, Owen knew that successful ventures require certain character traits and skills in management personnel and workers. If he had applied this same understanding to his proposals for ideal communities, he would have admitted more freely that the communal ventures would require similar individual traits in order to succeed. Although Owen steadily lost power and influence in the socialist movement after 1834, he continued to travel and to lecture whenever he could find an audience. New stars were appearing in the socialist constellation, among them Karl Marx and Friedrich Engels. Both paid homage to Owen as a man and a pioneer socialist, but neither thought much of his utopian socialism and they thoroughly refuted his major tenets. The struggling labor movement also honored Owen in the breach. Owen approved of general strikes, but wanted them carried out in a spirit of universal charity and philanthropy – an idea that never has caught on with any major labor union.}

_{Religion Rejected}

_{Owen also made a colossal mistake when he turned his back on organized religion and even attacked the church in an 1817 speech. This position cost him valuable allies, of course, but it also blinded him to the important role of religion in shaping society. It was indeed ironic that a religious sect, the Rappites, had established Harmony and operated it as a successful and prosperous community ; but things quickly fell apart under Owen. Owen wanted the kind of sharing and serving that groups such as the Rappites practiced, but he rejected the religious beliefs that held them together. As C. A. Burt, a resident of the famous Oneida Community, said with reference to New Harmony’s failure: "There are only two ways of governing such an institution as a Community; it must be done either by law or by grace. Owen got a company together and abolished law, but did not establish grace; and so, necessarily, failed." To this day, socialistic communities survive only when they are held together by religious or nationalistic feelings or are ruthlessly totalitarian.}

_{Misreading the Market}

_{Perhaps Owen’s greatest blunder, however, was in failing to understand the marketplace in which he had first accumulated his wealth and acquired prestige. Despite his success as a businessman, there is no evidence that Owen ever attributed his good fortune to the relative freedom of the marketplace in Britain or saw much social good in the mechanization of the cotton spinning industry. He did not seem to be interested in the kind of progress that occurs by increasing the productivity of the individual worker through the use of labor-saving machines. During Owen’s lifetime, for example,his own cotton spinning industry had made low-priced clothing and fabrics available to the masses. The impact of the cotton-spinning industry was so extensive that J. A. Schumpeter asserted that English industrial history can (1787-1842) "be almost resolved into the history of a single industry."}³

^{The rapidly improving productivity of the cotton spinning industry exemplified Adam Smith’s argument that "the great multiplication of the productions of all the different arts, in consequence of the division of labour, . . . occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people."4 It did not seem to occur to Owen that he and his fellow manufacturers, albeit for profit-seeking purposes, had performed a great social service in building an industry that gave the majority of the people access to better clothing at lower prices. To Owen, cotton spinning machines had enslaved the worker and left him poorer than before. Adam Smith, studying the same industry, would have concluded that the steady improvements in machinery would tend to benefit almost everybody and that the British standard of living could be expected to rise with every increase in industrialization. Owen was unduly pessimistic about the future of mechanized industry, despite the fact that he had a major role in early stages of the industrial revolution.}

^{Utopian Socialism Replaced by Bolshevism}

By the time Robert Owen died in 1858, his utopian socialism had been largely displaced by the fiery doctrines that eventually became modern Bolshevism. But democratic socialists still claim him as their true ancestor. Clement Atlee, the British Labour Party leader who engineered a great upset victory at the polls in 1945, was quick to point out that "socialist theory was developed by Robert Owen in Britain long before Karl Marx." Perhaps this comment reflects the hope that Owen’s humanitarianism will triumph over the harshness of Marx and the totalitarianism of Lenin and Stalin.

^{The unfortunate verdict of unfolding events does not sustain this hope. The Owenism that failedat New Harmony did not die there; it has become the underlying philosophy of today’s British and American governments. If there are redeeming qualities in all this, it’s that many democratic socialists share Owen’s decency and humanitarianism. But they also share the woolly-mindedness and impracticality that sank his New Harmony enterprise and led to weakness and failure in Owen’s other ventures. If it’s the spirit of Robert Owen that pervades modern society, some of us might want to echo the words of an editorialist of Owen’s time:}

^{Robert Owen, a benevolent cotton-spinner . . . conceives that all human beings are so many plants which have been out of the earth for a few thousand years, and require to be reset. He accordingly determines to dibble them in squares after a new fashion.}

^{Everybody, I believe, is convinced of Mr. Owen’s benevolence and that he proposes to do us much good. I ask him to let us alone, lest he do us much mischief.}

^{Robert Owen – humanitarian, messiah, and determinist – didn’t want to let anybody alone. Today, we live with the mischief of his faulty philosophy. VV}

_{1 Frank Podmore, an Owen biographer, wrote, "When (Owen) published his New View of Society, he looked for the regeneration of the world to begin on the morrow: throughout his long life that high vision, ever receding as he advanced, was still before his eyes; and he died at the age of eighty-seven happy in the belief that the millennium was even then knocking at the door." Podmore, Frank, Robert Owen, Augustus M. Kelley, Publishers, New York, 1968 (a reprint of the 1906 hook), page 124.}

_{2 Robert Owen, A New View of Society, first published 1813/14, Penguin Books, Baltimore, 1969, page 101}

^{3 J. A. Schumpeter, Business Cycles, vol. 1 (1939), page 271 (referred to in Phyllis Deane’s The First Industrial Revolution, Cambridge University Press, England, 1965, page 84.)}

^{4 Adam Smith, The Wealth of Nations, Gateway Edition, Henry Regnery Company, Chicago, printed in 1953, page 19.}

 

Melvin D. Barger

Melvin D. Barger is a retired corporate public relations representative and writer who lives in Toledo, Ohio. He has been a contributor to The Freeman since 1961.

This article was originally published on FEE.org. Read the original article.