This Day in History: Pope Pius XI issued the Divini Redemptoris, an anti-communist encyclical on this day in 1937. The encyclical describes communism as "a system full of errors and sophisms" that "subverts the social order, because it means the destruction of its foundations."
Pius XI goes on to contrast Communism with the civitas humana (ideal human civilization), which is marked by love, respect for human dignity, economic justice, and the rights of workers. He faults industrialists and employers who do not adequately support their workers for creating a climate of discontent in which people are tempted to embrace Communism. This reminds me of Willi Schlamm's refrain: “The problem with capitalism is capitalists. The problem with socialism is socialism.”
Pius XI once remarked, "No one can be at the same time a good Catholic and a true socialist."
His work expressed concern with Communism developing in the Soviet Union, Spain, and Mexico, and it condemned the Western press for its apparent "conspiracy of silence" in failing to cover such events in those countries. People forget that Mexico was one of the first Communist countries.
Times change and now the present pope is often labelled a Socialist.
This Day in History: Eli Whitney was granted a patent for the cotton gin on this day in 1794. A cotton gin – meaning "cotton engine" – is a machine that quickly and easily separates cotton fibers from their seeds, enabling much greater productivity than manual cotton separation.
The book "Against Intellectual Monopoly" by Michele Boldrin and David K. Levine has an interesting story about the cotton gin and Eli Whitney: "the cotton gin was enormously valuable in the South of the United States, where it made Southern cotton a profitable crop for the first time...Eli Whitney also had a business partner, Phineas Miller, and the two opted for a monopolistic pricing scheme...They would install their machines throughout Georgia and the South and charge farmers a fee to do the ginning for them. Their charge was two-fifths of the profit, paid to them in cotton. Not surprisingly, farmers did not like this pricing scheme very much and started to 'pirate' the machine. Whitney and Miller spent a lot of time and money trying to enforce their patent on the cotton gin, but with little success. Between 1794 and 1807, they went around the South bringing to court everyone in sight, yet received little compensation for their strenuous efforts. In the meanwhile, and thanks also to all that 'pirating', the Southern cotton-growing and cotton-ginning sector grew at a healthy pace."
This Day in History: German politician and journalist Eugen Richter died on this day in 1906. Richter was a fervent anti-Socialist, and his 1891 novel "Pictures of the Socialistic Future" was the 19th century equivalent of George Orwell's 1984. In "Pictures of the Socialistic Future" he predicts what would happen if socialism was put into practice. He showed that government ownership of the means of production and central planning of the economy would lead to shortages, and he drew attention to the problem of incentives in the absence of profits. He also anticipated the Berlin Wall where he showed that it would be necessary to kill people to prevent them from leaving. His work has been described as "prophetic" of what socialism would mean.
"What inspired Richter to make these grim—yet uncannily accurate—predictions about the 'socialistic future'? The most plausible hypothesis is that Richter personally knew the leading socialists from the German Reichstag, and saw them for what they were. I submit that he repeatedly peppered the socialists with unpleasant hypotheticals, from 'Under socialism, who will take out the garbage?' to 'What will you do if skilled workers flee the country?' When socialist politicians responded with hysteria and evasion, Richter drew the natural inference: 'If this is how these ‘idealists’ deal with critical questions before they have power, just imagine how they’ll deal with critical actions after they have power!'" Bryan Kaplan
This Day in History: Economist Murray Rothbard was born on this day in 1926. Wikipedia describes him as a heterodox economist of the Austrian School. Heterodox economics is any economic thought or theory that contrasts with orthodox schools of economic thought. However, the mainstream (orthodox) economic thought presently advocates for endless money printing (stimulus), so we may need some heterodox thinking in this field.
Rothbard had no regard for Government, and he argued that all services provided by the "monopoly system of the corporate state" could be provided more efficiently by the private sector and wrote that the state is "the organization of robbery systematized and writ large". He called fractional-reserve banking a form of fraud and opposed central banking. He categorically opposed all military, political, and economic interventionism in the affairs of other nations. Rothbard expanded on his view of Government, especially in his "For a New Liberty" (1973), "Anatomy of the State" (1974), and "The Ethics of Liberty" (1982). Rothbard showed how “the State is nothing more nor less than a bandit gang writ large…”
Though he authored many books, Rothbard considered Ayn Rand's Atlas Shrugged "an infinite treasure house" and "not merely the greatest novel ever written, [but] one of the very greatest books ever written, fiction or nonfiction". It should be noted that he did not often get along with Rand.
Here are some quotes from Murray Rothbard:
“The State says that citizens may not take from another by force and against his will that which belongs to another. And yet the State…does just that.”
“The State is an inherently illegitimate institution of organized aggression, of organized and regularized crime against the persons and properties of its subjects… a profoundly antisocial institution which lives parasitically off of the productive activities of private citizens.”
“Since the State necessarily lives by the compulsory confiscation of private capital, and since its expansion necessarily involves ever-greater incursions on private individuals and private enterprise, we must assert that the state is profoundly and inherently anti-capitalist.”
“We must, therefore, emphasize that ‘we’ are not the government; the government is not ‘us.’ The government does not in any accurate sense ‘represent’ the majority of the people.”
“The State uses its coerced revenue, not merely to monopolize and provide genuine services inefficiently to the public, but also to build up its own power at the expense of its exploited and harassed subjects.”
“The State is a coercive criminal organization that subsists by a regularized large-scale system of taxation-theft.”
“The wry coupling of the twin certainties in the popular motto ‘death and taxes’ demonstrates that the public has resigned itself to the existence of the State as an evil but inescapable force of nature to which there is no alternative.”
“There is no reason to assume that a compulsory monopoly of violence, once acquired…by any State rulers, will remain ‘limited’ to protection of person and property. Certainly, historically no government has long remained ‘limited’ in this way.”
“Government was constructed neither for ability nor for the exercise of loving care; government was built for the use of force and for necessarily demagogic appeals for votes.”
“It is easy to be conspicuously ‘compassionate’ if others are being forced to pay the cost.”
“If mankind is diverse and individuated, then how can anyone propose equality as an ideal?...But what justification can equality find in the nature of man? If each individual is unique, how else can he be made ‘equal’ to others than by destroying most of what is human in him and reducing human society to the mindless uniformity of the ant heap?”
I often wonder what the great libertarian minds of the past would think of today's tech giants and their repressive actions?
This Day in History: Economist Thomas Malthus was born on this day in 1766. He is famous for his book An Essay on the Principle of Population where he argued that human population growth would outpace food production, which would lead to societal ruin. However, Malthus was wrong. He failed to anticipate the Industrial Revolution that came after his book and people were able to produce more despite rising populations. Yet, people still cling to this Malthusian way of thinking. Paul Ehrlich in 1968 published The Population Bomb which sold millions of copies. In it he warned: “The battle to feed all of humanity is over. In the 1970s the world will undergo famines — hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate. . . .”
"The predicted famines did not occur in the 1970s or the 1980s. What did occur was a surplus of food. The apocalyptic critics in 1965 should have paid more attention to the statistics of food production. After 1950, worldwide grain production increased steadily. From 1950 through 1975, this increase was in the range of 25% to 40% per capita. In the less developed countries (excluding Communist China), the increase was in the 13% range. Between 1950 and 1980, the world’s supply of arable land grew by more than 20%, and it grew even faster in the less developed countries. From 1967 to 1977, the world’s irrigated acreage grew by more than 25%. The price of seed, fertilizer, pesticides, and farm equipment also dropped in this period, in some cases by as much as half. In the 1980’s, grain farmers all over the world suffered economic losses as a result of overproduction. While these trends may not be permanent, they did create a tremendous public relations problem for the heralded famine-predictors of the counter-culture era (1965-70)."~Gary North=
Where there was famine, it was largely due to government interference. "Zimbabwe was agriculturally rich but, with government interference, was reduced to the brink of mass starvation. Any country faced with massive government interference can be brought to starvation. Blaming poverty on overpopulation not only lets governments off the hook but also encourages the enactment of harmful, inhumane policies."~Walter Williams
This Day in History: Austrian political economist Joseph Schumpeter was born on this day in 1883. Schumpeter was one of the most influential economists of the early 20th century, and popularized the idea of "creative destruction."
According to Christopher Freeman, a scholar who devoted much time researching Schumpeter's work: "the central point of his whole life work [is]: that capitalism can only be understood as an evolutionary process of continuous innovation and 'creative destruction'".
According to Schumpeter: "Capitalism ... is by nature a form or method of economic change and not only never is but never can be stationary. ... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates... The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in... Capitalism requires] the perennial gale of Creative Destruction."
Take for instance the Walmart Effect and now the Amazon Effect. Both companies revolutionized and changed the way people shopped, and they destroyed a lot of businesses along the way. Hence, Creative Destruction.
Schumpeter also predicted that Capitalism would weaken and collapse by devolving into Corporatism and to values hostile to capitalism, especially among intellectuals (intellectuals tend to have a negative outlook of capitalism).
This Day in History: English writer Charles Dickens was born on this day in 1812. He created some of the world's best-known fictional characters and is regarded by many as the greatest novelist of the Victorian era. His works enjoyed unprecedented popularity during his lifetime and, by the 20th century, critics and scholars had recognized him as a literary genius. His novels and short stories are still widely read today. His stories had a big impact, and the illiterate poor would pay for his stories, opening up literature to a whole new class of people. I recently read Great Expectations and his writing still holds up. He also gave us: Oliver Twist, A Tale of Two Cities, The Old Curiosity Shop, David Copperfield, Bleak House, Hard Times, The Signal-Man and much more.
Charles Dickens had a disdain for law and lawyers, and this worked his way into some of his writings (Mr. Tulkinghorne and Uriah Heep). In A Tale of Two Cities Dickens wrote that taxes started the French Revolution. Ironically, France still has high taxes.
Dickens wrote in 1861 that American presidents no longer had the qualities of the Founding Fathers, “The system, for some reason, does not choose great men but brings to the top unknowns who have little really going for them and little really quality of greatness.”
Dickens complained of a lack of copyright protections in America, though he was actually paid royalties by three American publishers and he earned more royalties from the sale of books in the US, where he had no copyright protection, than in England, where he did.
His Bleak House had an early ode to Public Choice theory (where self-interest is the primary driving force behind all human actions). "The one great principle of the English law is, to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme, and not the monstrous maze the laity are apt to think it. Let them but once clearly perceive that its grand principle is to make business for itself at their expense, and surely they will cease to grumble."
Many like to portray Dickens as a Socialist, but he was a wildly successful capitalist and entrepreneur, a driving force behind the great nineteenth-century innovation of the serialized, commercial novel.
