Economic Myths #14 – Share the Wealth

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Clement Attlee is, with little doubt, one of the more notable of Britain’s former Prime Ministers. Apart from the long lasting effects of his legacy he was, in 2004, voted the “Greatest British Prime Minister of the Twentieth Century” in a poll of 139 academics. Needless to say, with such a high ranking in academic circles, almost every “accomplishment” of the post-war government that he led (with the possible exception of decolonisation) is likely to be an anathema to libertarians. Not only did he nationalise key industries such as the railways, canals, road haulage, coal mining, gas, electricity, telephones and steel manufacturing, he practically created the “cradle-to-grave” welfare state, the jewel in the crown of which was the now untouchable sacred cow, the National Health Service. Furthermore, he successfully entrenched the “Keynesian consensus”, the idea that full employment would be maintained by Keynesian fiscal policy, that was to unite all parties of any stripe for another three decades until the election of Margaret Thatcher’s government.

With such profound and fundamental changes to British society, many of which are still felt today, it is important to have an insight into Attlee’s motivations towards the legislation that his government passed. His own background, (not unlike that of most left wing intellectuals) was decidedly non-working class. The son of a solicitor, he was raised in Putney, an area of London populated by the professions. He was educated at an independent school and later read Modern History at University College, Oxford. He was not exactly born with a silver spoon in his mouth but neither was he consigned to life working in factories or in the coal pits. According to Wikipedia, his original political leanings were conservative. It was after he spent three years managing a charitable institution for working class boys in Stepney, East London, that he “came to the view that private charity would never be sufficient to alleviate poverty and that only direct action and income redistribution by the state would have any serious effect”. Thereafter, he became a “full-fledged supporter of socialism”. Which such self-assuredness, can we expect Attlee’s post-war government (to borrow a phrase from the infamous Beveridge Report that influenced his government’s policies) to have come close to completely “abolishing want”? Unfortunately, the facts speak otherwise:

  • Coal production in 1947 fell seven million tons below the output of privately owned mines ten years earlier, resulting in a three week industrial power cut in London and the Midlands;
  • The government constructed 134,000 fewer homes per year at a higher cost per unit than were built in either of the two years preceding the war;
  • Wages were frozen to wartime levels while the cost of groceries soared as their supply declined;
  • When US and IMF loans dried up, the costs had to be borne by the British working man, leading to the “taxation and tears” budget of 19491.

And summing up the welfare state:

The [Beveridge] plan merely furnished a thin cushion against total disaster for the most impoverished third of the population. True, every citizen (whether or not he needed it) was entitled to prenatal care, a birth subsidy, hospitalization and medical care of sorts, unemployment insurance, an old-age pension, funeral costs, and an allowance for his widow and dependent orphans. The subsidies and allowances were tiny, and, with mounting inflation, barely sufficed for the poorest – sixteen dollars at birth and eighty dollars for a pauper burial. Medical services were spread so thin that even at the price of nationalizing the existing medical profession, it was impossible to guarantee first-rate care. With food rations hovering near the starvation level, sickness became more frequent and national; production fell still lower. So poverty was not eliminated but increased to plague proportions, and life was a nightmare for everyone but the most dedicated bureaucrats. A man might have “social security,” yet he could not go out and buy a dozen eggs. After four years of Socialist government, he was only entitled to an egg and a half per week, as decreed by Marxist No.1, John Strachey, Fabian Minister of Food and Supply2.

The origin of Attlee’s political views betrays his belief in a common economic error, a belief that can clearly have disastrous consequences if its holder happens to one day become the leader of his country. This view of either private charity or forced redistribution as the solution to poverty is based on the flawed notion that there is a fixed pool of wealth for everyone – that when one person possesses wealth it necessarily results in another person being without it. From this false premise it follows that the alleviation of the poverty of one person requires wealth to be disgorged from another. The solution to poverty, however, is that wealth is created and not simply redistributed – the pie gets bigger and not just chopped up in a different way. Capitalism and the free market, far from creating haves and have-nots, involves the progressive accumulation of capital that produces more products at cheaper prices that everyone can buy. More factories, more machines, and more tools that produce a greater supply of goods for less and less effort serve to alleviate material poverty. All of us become better off as a result. If, on the other hand, wealth is to be confiscated from some and redistributed to others, it retards this very process of wealth creation. While a specific redistribution may allow the beneficiaries to afford to purchase a bit more in the short term, in the long run there will be less work, less saving, and less capital investment and accumulation. The number of products produced will fail to increase and thus their prices will remain high and out of the reach of the poor. Redistribution is, therefore, a temporary solution at best. At worst, it traps the people permanently in the stagnant poverty that you are trying to get rid of.

Let us imagine ourselves, for one minute, as employees of the charitable institution of which Attlee was manager. How do we interpret that which we may see every day? From some kind of absolute standard, the poverty and destitution of the slums in the East End of London may have been “terrible” or “bad”. No one would ever seek to deny this. It is important to realise, however, that poverty, fundamentally, is not caused by humans but by nature. The earth is and never has been the Garden of Eden, full of delicious goodies that are ripe for our picking. The first person who trod the virgin soil of the Earth was in a position of absolutely crippling poverty by our modern standards. All he had was himself and his bare hands – no shelter, no food, no clothes, no tools, absolutely nothing. (Indeed, we might ask, how on Earth would “redistribution” have helped him when there was nothing to distribute!). But from the moment he dug the soil with his hands, from the moment he picked up the first plank of wood to build into a shelter, from the moment he fashioned a tool from basic materials such as a rock and a stick, so began the long, slow process of capital accumulation and wealth creation, a process that only really began to accelerate in the early 1800s. Humans, in other words, have to work to overcome the natural state of poverty in order to build up a civilisation as prosperous as the one we have today. To view a snapshot of this process at any one moment in history and to declare self-righteously that “those people over there are in poverty!” is to judge this march of progress against an ideal – as if earth should be the Garden of Eden. The appropriate standard against which to make a judgement however, is the best that can be done given the eternal condition of scarcity. If one cries “something must be done” it ignores the possibility that something is already being done and has currently reached its best possible stage before moving forward to bring greater things. Wealth creation and capital accumulation takes time – we did not get refrigerators and cars the very moment the first person on earth decided to get off his backside and start working. But this process has caused the percentage of people living on one dollar a day to fall from 85% to 20% in two hundred years – and that achievement has been accomplished while the population has multipled five or six times.

The only way, then, by which we can judge that there is “too much poverty” at any one time is to ask a single question – is there anything that is slowing down or causing an artificially imposed constraint upon the process of wealth creation? The answer can only be what Franz Oppenheimer referred to as the “political means” for an individual to gain wealth – that, rather than work oneself to use unowned resources, or to trade goods voluntarily with others, one confiscates them violently from people who already own them. Although we can see that Attlee’s solution – redistribution through the welfare state – is a major part of this, so too is any restrictive and regulatory encroachment upon private property. In Attlee’s day, we can point to the fact that the decade of his birth, according to historian David Cannadine, marked the peak of aristocratic power and influence in British society. Today, it is the power of the privileged financial barons of Wall Street that benefit from cheap, freshly printed money, robbing the poor of the their purchasing power and ploughing it into assets, causing bubbles, malinvestments, booms, busts, unemployment and misery. If we really want to solve poverty, we should be removing these barriers to wealth creation that favour the privileged elites rather than compounding the entire sorry state of affairs with further economic evils.

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1Rose L Martin, Fabian Freeway – Highroad to Socialism in the USA 1884-1966, Ch. 7.

2Ibid. p. 76.

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Economic Myths #13 – Wealth Inequality and “The 1%”

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The inequality of wealth and income has been in the news again lately. According to the Daily Telegraph, 1% of the world’s population will own half of its wealth by next year. The Executive Director of Oxfam, who provided the figure, said that “an explosion of inequality was holding back the fight against poverty”, asking the rhetorical question “do we really want to live in a world where 1% own more than the rest of us combined”?

The mainstream debate over this issue fails to understand the true nature of the problem. The pro-free market side are wont to point out that such inequality “doesn’t matter” and governments should not do anything to interfere with the progress of business. The likely call from the opposite side, however, is for increased taxation and redistribution and, indeed, Oxfam itself stressed the need for a greater crackdown on tax avoidance by large, multinational corporations. However, the reality is much more subtle than simply left vs. right and, indeed, the debate produces a false dichotomy between “pro-business” and “pro-government/anti-poverty”.

On the one hand, we can agree that wealth inequality does not, on its own, create any problems for the generation of wealth and the reduction of poverty. The common attitude towards the rich appears to assume that someone like Warren Buffett or Bill Gates has tens of billions of dollars lying around in a bank account for them to spend and enjoy. The reality is that these figures represent the value of capital goods – machines, tools, factories and so on – that are invested in producing goods and services that everyone wants to buy. If these resources are in the hands of just a few people – say, “the 1%” – who most accurately devote them to the most urgently desired needs of consumers, then there is nothing economically deleterious with wealth inequality. Indeed, wealth inequality, in this scenario, is exceedingly good as any attempt to reduce it would divert resources into the hands of those less capable of directing them to the ends that people desire, or into those who would consume them. It is capital investment – more capital invested in more production processes to churn out more products that people need – and not taxes and redistribution that solves the plight of poverty.

However, this scenario is conditional upon the crucial aspect that resources must be in the hands of those who are best suited to serving the needs of consumers. In other words, those who are rich must have become so by meeting those needs. However, it is patently obvious that the current ownership structure does not reflect the voluntary choices of consumers. Rather, it is the product of crony capitalism, of cheap printed money that is ploughed into malinvestments and of taxpayer funded bail outs when it all collapses. The growth in wealth inequality is due not to the fact that consumers are voluntarily choosing to place that wealth in the hands of a few select people; it is because the government is throwing cheap money at this tiny elite so they can steal all of the world’s assets.

What, then, is the solution to this problem? Taxation and redistribution would clearly compound the economic evils rather than solve them. And, in any case, in spite of the hullaballoo about tax avoidance, the rich will always be able to influence tax policy to their benefit and to arrange their affairs so as to avoid it as much as possible. Rather, what is needed is a wholesale withdrawal of government from either supporting or hindering anyone in the pursuit of gaining wealth. All wealth should be obtained through the voluntary nexus of serving the needs of consumers and everyone should gain their wealth through their abilities and not through their political connections. What might such a world look like? Would it encourage wealth inequality or would such inequality be unlikely? One the one hand, it is arguable that wealth would still be highly concentrated. Genuine entrepreneurship is a rare talent and is likely to always remain so. However, if that is the case it is also likely that those particular individuals who own the world’s resources will rotate relatively quickly, with the top dogs remaining on the pedestal for only a short time. Indeed one aspect of the current wealth divide that is ignored is whether the same people remain stuck within their wealth/income group or whether there is relatively fluid movement between the different groups. Successful entrepreneurs make their biggest successes when they are small, nimble and contrarian. Once they have achieved their wealth, however, and their enterprises have morphed into large, multinational companies, they become large, unwieldy, inefficient and complacent. A former rebel becomes a part of the establishment who then becomes vulnerable to the insights of later entrepreneurs. Part of this can perhaps be seen with the technology industry where no, single player has managed to dominate each successive era. Microsoft put a PC into everyone’s home in the 1980s-90s; Google was the number one in internet search; Facebook was on top with social networking; and we are now, seemingly, entering a fourth phase where Apple seems to dominate smartphone technology. No single outfit has been able to carry through its dominance from one era to the next. Corporate dynasties and everlasting companies controlling everything will certainly not be a feature of a genuinely free market. Even a stock investor such as Warren Buffett, who has profited from a great many businesses in numerous decades, would be unlikely to achieve the wealth that he has done. Buffett’s mantra of value investing relies upon the price of a stock to become undervalued relative to the underlying value of the business, and for the price to then reach parity with, or exceed, that value. But the large distortions in stock prices – both up and down – have been precisely because of central bank flooding the markets with cheap, freshly printed money that results in excessive booms and busts. It is unlikely that Buffett, in a genuine free market, would have been able to buy and sell at such favourable prices as he was able to do in recent decades. On the other hand, however, it is also possible that a free market would reduce wealth inequality. As wealth creation ensues and the standard of living rises, ordinary people will find themselves with increasing amounts of disposable income that they may decide to divert into saving rather than increased consumption. Such funds, through savings accounts and the bond market, may form the backbone of investment funds that are ploughed into productive use. Thus, ultimate ownership of wealth may be more diverse than it is at present. Either way, however, we can be sure that the resulting structure of production and ownership will be one that best serves the desires of consumers and changes and adapts as the tastes of consumers change. Ultimately, it will always be the everyday folk, through their purchasing habits, who decide on the level of wealth inequality – not governments and central banks handing out favours to their political cronies.

National Defence and Just Wars

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However much people may disagree on the proper functions of the state and however much people may argue about how those functions should be deployed, it is almost universally acknowledged that “national defence” – the protection of the citizenry from invasion by foreign states – is seen, together with domestic security and protection from private criminals, to be not only the primary function of the state but also its very raison d’être. Indeed, it is difficult to imagine how, without this function – given that it is joined at the hip with the state’s monopolistic use of force – there could possibly be any state whatsoever. Thus any opposition to government’s monopoly on security is expressed only by anarchists and those who wish to see an end to the state altogether.

In keeping with many libertarian commentators (for example, Robert Higgs in Crisis and Leviathan) we may acknowledge agreement here with the proposition that “war is the health of the state”, permitting a tremendous number of, at first, temporary, and then, enduringly permanent inroads into liberty that statists could only dream of during peacetime. The perpetual existence of a bogeyman, real or imagined, serves both to justify and to distract the average person from the state’s own increased privations upon the individual. However, what we wish to examine critically here is the validity of the assertion that “national defence”, so-called, is a proper function of the state as well as the question of whether any wars waged by states could be “just”.

First, the overwhelming concern of the individual is not “national defence” at all but, rather, defence of his own person and property – as well as the safety from harm of his friends and family. If defence of his person or property is his primary aim, however, surely he has more to fear from his own state rather than from any potential foreign invader? It is own state that taxes his income; it is his own state that has nationalised industries that he may use or work in; it is his own state that regulates what he may do, what he may choose to put into his own body or any other voluntary actions he may choose to do with other consenting adults. A change of forced rule from one state to another is not necessarily going to make any difference to any of this. One governing state may move out and another may move in with no noticeable change to the individual’s life whatsoever. Indeed, an invading state is normally interested in taking over the economic capacity of the lands that are eyed for conquest – it does not normally wish to reduce its prize to rubble and be left with a wasteland. To a large extent it will wish to leave infrastructure and existing property relations intact, particularly if it is to rely on the productivity of the conquered workforce. Indeed, the idea of the sanctity of the political border is relatively new in international relations and one that only really found concrete expression in the aftermath of World War I. Earlier, when wars were conducted by monarchs and royal families, territories used to change from the jurisdiction of one realm to another, simply switching ownership between monarchs and forming part of the victor’s private property. Indeed it was the wealth and power of the king, who owned his territory and his subjects, that determined the size of the realm. The day to day lives of the average folk were not likely to change a great deal. Today, if France and Britain were to have roughly the same kind of approach to private property ownership and towards civil liberties, what real difference would it make if the French government was to take over a chunk of Britain or the British to take over a piece of France? This fact betrays the real function of national defence, which is not to safeguard the person and property of the individual citizen at all. Rather, it is to protect the territorial integrity of the state and to defend the state and its rulers from being overthrown by other states and foreign crusaders. Just in the same way as one might erect a high fence to protect oneself from a bothersome neighbour, so too does the state use its monopolistic provision of “national defence” to protect itself. If this should be doubted and one is tempted to cling to the idea that government is there to protect us from evil foreigners, then why is it that the wealth, property and livelihoods of the citizenry are precisely what the state steamrollers over during wartime? Civil liberties are suspended, the news is censored, military slavery (politely known as “conscription”) is enforced, and all productive capacity is geared towards the war effort with food essentials heavily rationed and luxuries all but non-existent. It seems that protection of the people is the very last thing on the government’s mind when foreign threats loom large.

With the advent of democracy, where no one individual ruler “owns” any jurisdiction but, rather, it is supposedly run by a caretaker ruler for the good of “the people”, some kind of different criterion other than the extent of the property ownership of the king was needed to justify to the state’s prerogative to “national defence” and to mask its real purpose of protecting itself. Something had to be done to induce, in the population, the fear of foreign rule. Hence states began to invoke nationalistic sentiments in their populations and with it the sanctity of the political border. For without nationalistic fervour populations would have little willingness to defend the state from a foreign state. Bar nationalism, patriotism and strong cultural identities what reason would there be for a person to avoid being ruled by one government or another? Fortunately for the state all of this went hand in hand with the prevailing ideology of democracy and the economic policies that soon emerged – and, tragically, with horrifying results. First, democracy effectively nationalises the citizenry and makes everyone under the auspices of a particular government symbiotic with that government. Hence, when a foreign state invades it is not only “the” government that is under threat of takeover but “our” government. Second, as “democracy” has become synonymous with freedom, openness, and pluralism a natural fear of “other” forms of government – monarchs or dictators – is engrained. The terror of losing democracy to something that is, on the face of it, more despotic is used as a fervent justification for not only defensive but also offensive military action today. Thus, defence is imbued with ideological purpose. Third, state-dominated and collectivist economic policies naturally aggregate the people under the identity of the government. Under collectivism, the relevant economic unit is no longer the individual, choosing to fulfil his ends as best as he can with the available means, but, rather, “the nation”. All productive resources and all productive enterprises are geared by “the nation” towards “the nation’s” goals. Nations, not individual people and private entities, now compete with each other. Inputs, outputs and processes are heavily aggregated into relatively meaningless concepts such as “Aggregate Demand”, “Gross Domestic Product” and even the concepts of “exports” and “imports” are only really important if one views the world in political borders. Furthermore, the inefficiency and impoverishment caused by collectivism naturally creates a drive towards autarchy and xenophobic envy of the wealth and resources of neighbouring states. Under complete free trade, if Ruritania is predominantly agricultural and specialises in growing food, whereas Mauretania specialises in heavy industry and manufacturing, Ruritania would export food to Mauretania and the latter would use this to then fuel its industries and produce manufactured goods that are exported to Ruritania. Both countries benefit from the specialisation of the other and from trading their wares – indeed this is nothing more than division of labour by state rather than by individual. If, however, Mauretania’s government begins to interfere in its economy, its industries become less productive and less competitive; while the domestic market can be ring-fenced by protective tariffs, no such luxury can be imposed on the foreign market and Mauretania will find that demand for its exports in relation to other countries starts to dwindle. Thus, Ruritania will start exporting more food to other countries and less to Mauretania, leaving the latter with a food shortage relative to population. Hence comes the call from Mauretania’s government, recognising the resulting impoverishment, that Mauretania needs “self-sufficiency” in food. This was precisely the case of Germany before World War II, a heavy manufacturing nation that relied upon imported food, with food self-sufficiency being a major motivation for Hitler’s pursuit of lebensraum in the largely agrarian lands East of Germany’s borders. Indeed, Nazi Germany, a fascist-collectivist economy with potent – even doctrinal – nationalist fervour that resulted in one of the most horrific racially motivated exterminations in the whole of history is an instructive case that demonstrates the extremes of nationalism bred by collectivism, and this fact raises a pertinent question. If Nazi Germany was so horrible then why was it met with such mute opposition right up until the invasion of Poland (except for the bleating of Churchill during his so-called “wilderness years”)? Why was the Versailles Treaty so willingly shredded clause by clause until it was merely waste paper? Why so much willingness to accommodate and co-operate with such as awful regime? One reason surely has to be that under the post-World War I gold exchange standard, the New Deal and the pursuit of Keynesian macroeconomic policies to combat the Great Depression, everybody – not just Germany – was moving towards collectivist economic planning. Indeed, the New Deal and the associations and agencies it bred were modelled on those in Mussolini’s Italy. Policies such as the Smoot-Hawley Tariff Act served to segregate each country as a closed economic unit and drive them towards autarchy. A related aspect of big government economies and welfare states is that they begin to view their populations as burdens as much as productive units – incessant consumers and eaters who put relentless pressure on “the nation’s” resources. Although today we can see this resulting in the concern of intellectuals with supposedly “excessive” population growth, in earlier days it helped produce the Eugenics movement, which had the aim of reducing those of lower “social and genetic worth” – i.e. the unproductive resource consumers –  and was largely discredited in the aftermath of World War II as a result of the Nazi policy of racial sterilisation. Perhaps even more visually embarrassing is that school children in the US recited the pledge of allegiance with the Bellamy salute – a variant of the Nazi salute. Any ideological weapons against Nazi Germany were, as a result, able to achieve only a blunt impact simply because they were not so sharply delineated. The uncomfortable truth is that Nazi Germany was fundamentally no different from any other state at the time – it’s just that Hitler took these fundamentals to their logical conclusion and the results were horrific. Indeed, “national defence” implies the preference for and superiority of one’s own race, culture and creed – for if these things do not matter to the individual citizen then so too does it not matter which particular foreigner takes over the government and starts delivering the mail. It is no small wonder why it leads to xenophobic hatred and is the breeder, rather than the solver, of conflicts.

Turning now to the economic case for national defence, this generally rests on the idea that, as the consumption of national defence is “non-rivalrous” and “non-excludable” that, left to the free market, it would be underprovided owing to a significant “free rider” problem. Without getting too much into why such concerns in and of themselves provide no justification for the state provision of a good or service, we can state more simply that it is only the precise methods of defence as chosen by the state that are non-rivalrous and non-excludable. An aircraft carrier serving A does not interfere with its services towards B, nor can its services be excluded from either one of those people. But there is no reason to suggest that aircraft carriers must be provided in order to maintain defence of one’s person and property, which is supposed to be the alleged purpose of national defence. Private defence operations may well produce methods of defence whose consumption is rivalrous and excludable – for example, more localised, specialised and heterogeneous defence methods specific to particular customers. The common fear concerning such methods of defence is that they will never be able to match the might and power of a foreign state – how can such scattered methods and apparent disorganisation provide any meaningful kind of protection? This fear is soon resolved by the realisation of several important points. First, weapons of enormous firepower – such as nuclear weapons – have only been developed by states because other states have done so. Nuclear weapons are not defensive weapons at all but, rather, weapons of mutually assured destruction. In particular, aggressors are usually not interested in reducing foreign territories to worthless rubble – they have their eyes on the economic resources that are available for exploitation within that territory. Indeed, a significant motivation for the US’s foreign aggression today is the control of resources in the Middle East (especially oil), camouflaged by an ideological veneer. If a stateless society was to abandon nuclear and other large, destructive weapons this would lessen the justification for foreign states spending their resources on them. This goes hand in hand with the second consideration which is that if, as we stated above, the state’s purpose in providing national defence is to protect its territorial integrity (and this is justified by the claim that it protects the persons and property of its citizens from invasion by foreign states), then if a particular foreign society is anarchical and has only scattered and allegedly ineffective private defence methods, what offensive threat does this pose to either the state or its citizens? Not only would the state have little internal impetus to maintain heavy defence spending but any attempt to cajole the citizenry to pay for it would be much harder as the state will lack the ability to construct a bogeyman. The so-called “War on Terror” and the threat of Islamic extremism does, of course, seem to negate this thesis as defence spending is ratcheted up against sub-state and not state actors. But there is a strong case to be argued that most of the threat from terrorism is as a result of the West’s own belligerence – in other words, terrorism is a defensive response rather than an offensive threat. Indeed, there will always be a handful of extremists, fundamentalists and radical nutcases in any society whether its statist, anarchist or whatever. What gives their ideas traction, however, and builds them up into a significant threat is that they become creditable in the eyes of other people – credit that the West seems all too willing to hand on a silver platter. In any case it is arguable that although the difficulty of eradicating terrorists permits the west to perpetuate a bogeyman, the “War on Terror” is becoming a harder sell as it seems as though any widespread, offensive capability of terrorists is limited. This leads to the third consideration which is that, while private defence may appear to be a hopeless offensive force, its effectives as a strictly defensive force comes not from its firepower which, collectively, may well fall short of that possessed by a state, but, rather, from the very fact that it is scattered and heterogenous. It is far easier for a foreign invader to take aim at a central command structure that possesses one train of thought, one or a few strategies, one chain of supply, and whose soldiers have all been trained in the same way and possess the same weapons. As the difficulty in combating guerrilla warfare can attest, it is far more difficult to overcome hundreds or thousands of localised strategies, different training, uncertain weaponry, and surprises round every corner. This effectiveness of private defence would be magnified if the entire economy is also decentralised. In modern states, entire communications and financial networks are centralised so that an invader only has to target the central hub in order to bring the entire country to its knees. How effective would it be, for example, for a foreign invader to knock out a country’s centralised banking system? Where all such services are provided privately, however, with no hierarchy of control springing from a common root, a single attack by the foreign invader is now multiplied into tens or even hundreds of separate attacks to take control of each and every individual, private network. The loss of a part of the banking industry to an aggressor would not necessarily cause the rest of the country to grind to a halt with the only option to yield to the invader’s might.

Just Wars

In spite of our negative conclusions concerning national defence, is it possible that there are any wars can be described as “just” and if what are the requirements for such justice?

It appears to be undisputed in the mainstream that World War II provides the hallmarks of a just war. Here there was a very belligerent and aggressive dictatorship that invaded foreign territories over which it had little (if any) claim, subjected their populations to extermination or slave labour and otherwise imposing upon them its odious method of government. Surely it was just for the allies to go to war against such a threat? Without having to examine the details of World War II specifically, we can see that the main problem with this line of thinking in the abstract is that it considers only states as the relevant players. The individuals within each state are practically ignored or are aggregated into collective wholes. The only relevant units in the analysis are whole countries and some countries are aggressive and nasty whereas others are peace-loving pacifists. If this was true and individual countries were individual people then World War II may come close to being a just war (although, as we shall see below, it would probably even fail if we made this assumption). However, all defensive actions of a state rely, for their funding, upon the taxation of individual citizens – the forced confiscation of their private property. This in and of itself is a rank injustice. What if the individual citizens do not want the money that they have earned legitimately and the government has not to pay for a war? They have had the very thing that national defence is supposed to protect – their private property – stolen from them. All state wars funded by taxation are, therefore, per se unjust, and this fact is true regardless of the nobility of the cause. Tax dollars can be spend on a multitude of good and wonderful things – schools, hospitals, roads, etc. – but this does not change the fact that the people forced to fund them would have preferred to have spent their money on something else. Hand in hand with this goes the possibility of conscription – the enslavement of the population into defending the country with their bodies as well as their wallets – and all of the other liberties that are suspended in war time, with the entire economy geared towards the war effort, as was the case in World War II. Moreover, what are we to make of the mass bombing of civilians, intentional or otherwise? The argument over who killed civilians first is irrelevant – the fact that it was perpetrated willingly by both sides indicates that they are both as bad as each other. And it was the allies who were responsible for what may be the worst of these atrocities – the incineration of tens of thousands of people at Hiroshima and Nagasaki. If a person robs me in the street am I entitled to fire a gun indiscriminately in his direction, killing tens of innocents going about their own business in order to apprehend the assailant? Am I entitled to state that my action was just as it stopped the evil thief and that everyone else who is now lying in pools of blood was just “collateral damage”? I would, quite, rightly be arrested and tried for murder. Such actions are no different in kind from civilian deaths during state warmongering. It also emphasises how little disregard states have for their populations when they are under threat – the persons and property of the individual people are not there to be protected but to be readily consumed or treated as cannon fodder, a wall of defence to protect the state.

Not only does all of this demonstrate the injustice of state perpetrated wars, but it highlights the fact that any consideration of history in terms of whole states, countries and nations will never be able to make an incisive ethical justification or criticism of past events. Although some may be worse than others, the basic truth is that all states are inherently unjust, resting upon a crumbling foundation of illegitimacy. Therefore it is impossible to categorise a war as just through such an approach. When we look at the players in World War II specifically it is difficult to see much of a distinct difference at all. The British were responsible for the imposition of the largest empire in human history. How was this much different from the German conquest of Eastern Europe? Germany’s pre-war attitude towards Britain and its empire was to regard the latter as a kindred, Aryan spirit and a model of ruthless empire-building to be followed and admired. Britain and the United States used concentration camps decades before the Nazis evolved them into death camps – and need we even mention the Russian gulags? Indeed the communist dictatorship of the Soviet Union, with its brutal political repression, does not have much to distinguish it from Nazi Germany – particularly if you were to be an unfortunate victim of one of these regimes. The Soviets had already completed much of their “Great Purge” of hundreds of thousands (at least) before German soldiers ever set foot on its soil. Further, such lack of ideological distinction between the state players in World War II reveals itself through the continuous switching of allegiances both before and after the war and the consequences of such switches. The Molotov-Ribbentrop Pact of 1939 initially sealed Germany and the USSR as allies, secretly carving up Eastern Europe between them. Indeed, the entire trigger of World War II – the German invasion of Poland – was matched by Stalin’s own invasion of that country only a few weeks later. Germany then invaded Russia in June 1941 and Russia became allied to the British and, later, the US. After the War, of course, the former friends fell out and the Cold War endured for another four decades. And perhaps the most sorry tale is the fact that having been “rescued” from Nazi oppression the whole of Eastern Europe – at the mere of stroke of a pen – was consigned to Soviet oppression. For the populations of Eastern Europe how different from being ruled by the Nazis was being ruled by the Soviets? Indeed the attempted justification of World War II and the emphasis of the horrors of Nazi Germany has conveniently overshadowed the atrocities of the post-war communist dictatorships in Eastern Europe. Overall, however, it is hard to see how such outcomes could result if there were genuine, rigorous ideological differences between the players in World War II.

What then is the criteria for a just war? In the first place we must dispense with the notion of “war” itself which is a term that applies to states. In a libertarian world, in which there are only individuals and groups of individuals co-operating voluntarily, there would be no “wars” in the sense in which we understand them. Therefore, the justification for any warfare-type action is exactly the same as the justification for any violent action between individuals in a libertarian society. We can list the criteria quite simply as we did in a previous essay, The Ethics of Interventionism. To relate these to war specifically the equivalent war-faring terminology has been inserted:

  • No person (“country”) has the right to initiate violence (“offensive action” or “invasion”) against any other person (“country”) in any circumstance;
  • Where a person is the victim of aggression (“invasion”) he has the right to defend himself;
  • Where a person attempts to defend himself he has no right to initiate violence against innocents (“civilians”) during the act of doing so, including their enforced participation (“conscription”) and causing “collateral damage”;
  • Where a person attempts to defend himself other people have no right to initiate violence against him in order to stop him from doing so (“neutrality”);
  • A person has the right to solicit, contract with or otherwise co-operate with third parties (“allies”) in ensuring his defence;
  • Third parties (“allies”), likewise, have the right to provide their funds and resources towards defence, either through a negotiated contract (“treaty”) or voluntarily;
  • Third parties providing defence services have no right to initiate force against innocents during the act of doing so; this includes forcing others to contribute towards the same and causing “collateral damage”;
  • Where a third party provides defence services it not may be forcibly stopped (“blockaded”) from doing so by others;
  • Whether the injured party or a third party should or should not act to defend the former against an act of aggression, or whether such an act of defence is a “good” or “bad” thing by some other moral standard may be debated; however, the conclusion may not be enforced violently on any party that is not committing an act of aggression.

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