History of Civilisation - A Story of the Rich versus the Poor

fascinating

Ad Honorem
Dec 2011
2,418
To NordicDemosthenes.


I don't know what you mean by absolute monarchies being a relatively new thing in Europe. France, Spain, England and Italy have been ruled by kings for over a thousand years, and before then there was the absolute rule by the Roman emperors. The medieval kings may not have had absolute total 100% power, but I would put it at 99%, and their wealth was vast, in comparison to that of the common people. You speak of certain unsuccessful revolts, but this is mere pathetic, suppressed, attempts by the poor to express grievances. The power of the monarchs swatted them away like flies. " If the whole idea is that the downtrodden masses banded together and took rights etc. then surely they would have even more reason doing so when there were more of them, and they were more downtrodden, no?" That's not the whole idea; I already wrote of the rights of ordinary people slowly evolving over hundreds of years, beginning, in England, as the baron's revolt which forced the king to sign Magna Carta, and the king's creation of parliament for his own purposes. The situation of the poor is said to have improved after the black death, creating a labour shortage, so it was a change of circumstances that put a strain on the feudal system, but it is not really clear that the generality of the poor were really better off, as prices went up. It appears to have had no effect on the political power of the monarchy, or of the common people. It didn't stop the rich wasting resources and common people's lives in the sordid wars of the roses.

The real push to reduce the power of the king, and give more to the "people" (actually a section of the people you might call the middle class) came in the 16th century from parliament, and a lot of the motivation to do that was for religious reasons. By this time, significant development of the European economy from the voyages of discovery, the adoption of atlantic slave trade (and the inflow of profits therefrom), mercantilism, meant there was more money around, a large amount of which ended in the pockets of the middle class (in the book "The History of the Cost of Living", it shows that the wages of the average labourer, in real terms, was still no higher than in the 12th century). The place was still ruled by the wealthy.

A farmer may have a decent standard of living if he owns a significant amount of good land, or if he rents the same - the rent will cut into his income, but assuming a rent that is not oppressive, the competent farmer could prosper. I think that the serf was in a different situation, if I am not wrong they had to give a third of their harvest to their lord.

As regards people learning politics, this can only be done with experience, over generations. It took England hundreds of years.
 

royal744

Ad Honoris
Jul 2013
10,745
San Antonio, Tx
As far as their monopolies, well, capitalism does tent toward monopoly. :)
Which is why successful economies are rarely, if ever, “pure’ this or that. Pure capitalism and democracy cannot coexist very well, except during the initial stages when there is still competition. In this scenario, the pure capitalists wind up vanquishing the competition and cornering the market, at which point we are talking monopolies and not competition.

For want of a better way of describing it, this is why we have governments, at least in part to prevent the kind of predatory capitalism that exists in many places around the world. Capitalism, taken to its extreme, eventually ends up with single victorious entities who can command markets in their favor without competition. This usually makes the victors a bit lazy and unresponsive to the public weal. They can kick back and relax because they have successfully wiped out the competition.

The answer, of course, is to regulate the markets so that as many enterprises as possible have a fair shot, and sothat as little underhanded skullduggery takes place. I would call this “Regulated Capitalism” and for more than a couple of centuries, it has worked fairly well in America, although there were times when it was flagrantly violated.

Business has one ideology and one way of keeping score: How much money did you make today and can we continue to do so. This is something that is not unique to democracies. It can coexist with dictatorial regimes as well. Look at Germany during WW2 - a highly regimented society where dissent is typically crushed and where companies trusted by the government can run roughshod over the populace.
 
Jul 2019
124
Pale Blue Dot - Moonshine Quadrant
Over time, industriousness, intelligence and sheer luck would result in some families accumulating more capital than others. On balance, those with a relatively large amount of capital would be able to retain it through famines, and other vicissitudes, that would ruin those with only a small amount. Thus the tendency would be for the richest to get richer and the condition of the poor would relatively reduce.
In my view the phrase “relatively reduce” is a key point here. It obviously implies a wealthier class but does not require the crushing, even life-choking, poverty we have seem at the lower social structures of civilizations when they are in a dissipated condition.


Perhaps the first civilised peoples operated democratically, but the concentration of capital in the hands of a few would make them difficult to control…Obviously, chances are one city, or ruler, would come to dominate over a large area, hence the rise of empires such as Sumeria….The use of armed force and murder, to establish a system of routine theft, became the norm, in fact the rich would begin to believe that such behaviour made them great...Thus the rich and powerful wasted the resources of their country by spending selfishly and acting cruelly.

I would substitute the word consensus for democratically here to emphasis a voluntary cooperation as opposed to a forced “concentration of capital” that you referred to, and to note, as did you, the regular resort to force in the rise of expansive social systems and empires. While a comparison between Carthage and Rome is far from perfect as Carthage warred with Sicily prior to its conflicts with Rome, but I think it is fair to say that coercion played a far larger role in the empire of the latter than the former.


In a similar manner, the capital acquisitions of ancient Athens were largely voluntary prior to the Peloponnesian War. The Athenian decision to accept the proposal of the populist Themistocles in 483 BC that the wealth derived from the silver mines of Laurion be used to construct 200 triremes that were used to conduct naval campaigns against the Persian military was the start of Athens' militarization of capital – an act that appears merely defensive until one remembers that Athens not long before had helped foster rebellion against Persia in the Ionian Revolt.


In the absence of coercion, it is not obvious to me that that concentrations of capital need to be controlled in any consciously governing sense – after all, the idea of control instantly raises the question of “control by whom and for what purpose?”


This is obviously a moral claim I have made but I can discover no other way to delineate between legitimate, productive, wealth-building, and civilization supporting accumulations of capital from the plunder that has been so common in written histories. And that plunder by the rich and powerful that you referenced in the last sentence with the word “wasted” is, in fact, capital destroying in its operation. An empire can, of course, be extended by plundering others – Rome, probably being the best documented, but also modern Western imperialism. But the behavior to the extent to which it becomes the dominant process inevitably marks the beginning of a decline in the civilization as capital is being forcibly transferred - and thus makes wealth acquisition a zero-sum game - as opposed to being created.


I think it is worth noting that civilization is often defined as follows (this is from Wikipedia):


“any complex society characterized by urban development, social stratification imposed by a cultural elite, symbolic systems of communication (for example, writing systems)”


I think the phrase “urban development, social stratification imposed by a cultural elite” is significant in that both my notion of coercion is inherent in the word “imposed” and your concept of capital is at least implied in “cultural elite.” The acquisition of capital is a moral good if accomplished in a non-coercive manner – I recognize that this again is a moral claim, but shared morality is the glue that holds societies together and our mutual concern about radically imbalanced wealth distribution has at least a partial moral component itself. Obviously, the degree of social and economic stratification is an important factor in the development and sustainability of civilizations – and so is the manner by which that stratification arose.


So, my essential point here is one between voluntary and coercive approaches to acquisition of assets that informs much of what follows – with the latter making no additions to a given stock of capital. In his seminal 1914 work The State, Franz Oppenheimer made clear note of this distinction:

Political and Economic Means [Oppenheimer’s section heading]

There are two fundamentally opposed means whereby man, requiring sustenance, is impelled to obtain the necessary means for satisfying his desires. These are work and robbery, one's own labor and the forcible appropriation of the labor of others…because of this, and also on account of the need of having, in the further development of this study, terse, clear, sharply opposing terms for these very important contrasts, I propose in the following discussion to call one's own labor and the equivalent exchange of one's own labor for the labor of others, the "economic means" for the satisfaction of needs, while the unrequited appropriation of the labor of others will be called the "political means

Others (Ortega y Gasset, Richard M. Weaver and Robert Nisbet are examples) have followed in Oppenheimer’s classification of social means and political means of capital acquisition. He also deeply influenced the American Henry George and the German Ludwig Erhard, who, following the non-statist market ideas of Friedrich von Hayek and Wilhelm Ropke became the architect of the West German economic miracle after WWII. Men like Hayek, Erhard, and Ropke knew that the rise of capital formations and the civilizations enabled by such formations is a cooperative affair – an example of social means.


Economics, the study of the implication of humans’ exchange goods and services – those resources by which they can prosper and thrive in an evolutionary environment characterized by finite resources and adaptive selection. Thus, it is economic success, with its eased access and storage of valued resources (capital) that allows enculturated, civilized humans to mitigate the remorseless Darwinian struggle for survival that exists more fundamentally at a lower, mammalian level. The rise of sophisticated civilizations has been enabled by humans, in a degree far greater than any other known species, to create, store, and cooperatively distribute those resources necessary for humans to effectively sustain their existence on a plane some measure above animalistic survival.


In a sociological sense the trust necessary for humans to work cooperatively together to establish economic behaviors that enable flourishing originally stemmed from kin-selection and reciprocity among localized individuals and clans whose trust-worthiness had been previously demonstrated and recognized from close range personal experience. Voluntary associations enabling resource exchange extension beyond the family or local group will generally occur only insofar as there exists some shared world view upon which the prerequisite trust can be expanded outside localized social groupings to include previously unknown individuals who exist at a distance – an enabling process that can shrink social distances even over larger geographical distances that allows human animalistic group-based concerns over US versus THEM to be partially suppressed.


This shared world view has often been religious but it can also be a product of shared language (the ancient Greek term “barbarian” meant non-Greek speakers), an ideologically coherent larger community, or more abstractly, a philosophic intelligibility than can span large distances. Traders voluntary exchanging goods for mutual benefit are a well-known historical example of culturally diverse individuals shrinking social distances – with seaports like Tyre, ancient Athens, Constantinople, London, Hong Kong, Singapore, and New York and being examples of cross-cultural cooperation where very different civilizations can interact and cross-pollinate, thereby becoming centers of voluntary change.


But my primary point here is one between voluntary and coercive approaches to acquisition of assets – with the latter making no additions to a given stock of capital and doing nothing to shrink social distances.


In the etymology of the word civilization there apparently was back in 1704, in a now obsolete sense, the idea of "law which makes a criminal process civil" - which logically follows the idea the common idea that a successful conquest by force would be followed by the creation of formal legal edits to legitimize that conquest and transform what was an initially a coercive political acquisition of capital (including human capital) into nominally social means one insofar as the political state is seen as a legitimate arbitrator of economic wealth. But the obvious danger here is when the rich gain control over the coercive state they thus radically multiply their existing social power by the use of newly acquired political power. This, I argue, is what has happened, which only short-lived exceptions, throughout the history of civilizations.
 
Jul 2019
124
Pale Blue Dot - Moonshine Quadrant
Only in the last 1000 years has there been an extremely slow loosening of the vice-like grip of the rich and powerful over the great majority of people. In the European nation-states, the absence of empires generally made Kings less rich and powerful that emperors. There was some accommodation for those who were not the richest. The English parliament, giving a voice to the "commonalty" (meaning the common people but really only the well-off, at first) sometimes restrained the absolute power of the monarch. More importantly, parliament took over from the monarch the onerous task of ensuring that the country ran smoothly. With more ordinary people having a say in the making of laws, the amount of judicial cruelty began to reduce (because the lawmakers knew that people close to them, or even themselves, might have the misfortune of suffering the penalties that the law imposed). Thus people became less fearful of speaking out to authority, and the just demands of the people could be satisfied.
I agree with this, with the caveat that the “extremely slow loosening of the vice-like grip of the rich and powerful over the great majority of people” began to be reversed as the state gained increased control over economic activity – in Oppenheimer’s terms a diminution of voluntary social means and power regarding capital formation and an increase in coercive political power and capital appropriation.


In England this process began with the militarism of Cromwell (in the name of the people of course) and accelerated radically after the establishment of the centralized Bank of England in 1694 with its growing grip on currency control – after which the boom-bust economic cycle clearly appeared and the British Empire began to acquire its dominating status. Initially, true social power capital was still being created relatively more than the political power wealth appropriation (except in the colonies) but the trend toward political control of wealth was established where by the wealthy used state authority to augment their position.


A single example of this was the Corn Laws that kept grain prices high thereby increasing the relative value of England’s farm land that was firmly in control of the British aristocracy – thereby assisting in their social and economic control and the relative pauperization of English labor. Since the distinguishing characteristic of the state is its legal monopoly on coercion, the capture of political control of economic forces transforms the social power’s creation of capital into one of what Oppenheimer and others have called the political means which represents coercion acquisition of capital by whoever controls the state.


In the United States, Alexander Hamilton and the Federalists sought to implement an English-like system to further American greatness and an American ruling class, but they were largely foiled by Jefferson’s election in 1800 for liberalism of that era was fully cognizant of the relationship between state economic policies and the furthering of vested interests – they had seen much of it the England of George III.


In retirement John Adams and Thomas Jefferson debated the question of Natural Aristocracy some length in their letters that they each presumed to be inherent in a world of human differences regarding intelligence, ability, and moral substance. Although they both agreed that a Natural Aristocracy existed, they arrived at seriously divergent conclusions about the problem of that aristocracy.


As good republicans, both men despised hereditary nobility. But at that point their views parted ways. Jefferson was eager to seek out the “natural aristoi” and cultivate them for public service. Adams regarded their appearance and rise as inevitable; far from wishing to recruit them into public office, he feared their influence and sought doggedly to straighten it within the confines of a senate in a modernized version of the classical mixed regime. While neither man mentioned Alexander Hamilton, they both had had repeated dust-ups with him during their careers and his open desire for a ruling class that would capture government – even to the point of abolishing the states - leading to the conscious formation of the economy guided by a preferred class was surely in their minds.


Certainly both men recalled that fact that right after President Washington rejected the advice of two of his three-man cabinet (all lawyers, which Washington himself was not) and allowed Hamilton’s Bank of the United States to be formed was immediately followed by an embarrassing outbreak of corrupt financial speculation that resulted in a speculative bubble on Wall Street in which a worrisome number of elected representatives partook. Hamilton quickly, and with aplomb and personal integrity, acted to burst the bubble. But the fact that it happened in the first place and the processes of new government-sanctioned banking system were so easily captured by vested interest was to Jefferson and Adams an object lesson on the dangers of an “artificial” aristocracy and a warning about state involvement in the economy.


Jefferson was appalled at the spectacle. In a conversation with Washington, he expressed the full extent of his hostility to Hamilton’s neo-mercantilist vision that was already displaying exactly what he had long feared:


“I told [President Washington] that…a system had there [in the Treasury Department] been contrived for deluging the states with paper money instead of gold and silver, for withdrawing our citizens from the pursuits of commerce, manufactures, buildings, and other branches of useful industry to occupy themselves and their capitals in a species of gambling, destructive of morality, and which had introduced its poison into the government itself…

…that particular members of the
[Congress], while those laws were on the carpet, had feathered their nests with paper, had then voted for the laws, and constantly since lent all the energy of their talents and instrumentality of their offices to the establishment and enlargement of this system; that they had chained it about our necks for a great length of time, and in order to keep the game in their hands had, from time to time, aided in making such legislative constructions of the Constitution as made it a very different thing from what the people thought they had submitted to…”

John Adams was also suspicious of banks. Adams, later wrote in regard to Destutt Tracy’s free market book A Treatise on Political Economy that Jefferson sought to have accepted as a primary American economic text that: "Our whole banking system I ever abhorred, I continue to abhor, and shall die abhorring…" believed that Tracy's chapter on money contained "the sentiments that I have entertained all my lifetime." He believed the book to be "a magazine of gun powder placed under the foundation of all mercantile institutions."

Hamilton’s admiring biographer Forrest McDonald noted that Hamilton was a student of the pre-Revolution French Finance Minister Jacques Necker and that he [Hamilton] rejected the Adam Smith notion of noninterference in human industry by the state. McDonald noted that in his famous Report on Manufactures commissioned by Congress that: “Hamilton saw the advantages…of using government to bring about economic changes which in turn would alter society for its benefit.” Who is “society” was an undefined collective concept in McDonald’s book but Hamilton was never shy about his opinion as to who should rule.
 
Jul 2019
124
Pale Blue Dot - Moonshine Quadrant
Still working on fascinating because I am so absurdly verbose....

After the demise of the Federalists, the Whig Party adopted a similar agenda as both their elected presidents died quickly in office and their Vice Presidents who were elevated to the Presidency were Whigs in name only. Zachary Taylor wasn’t even a Whig – or another politician. He was a military hero had never even voted before he was elected - something that marked the early decline of American politics.


But the rise of the Republicans in 1860 after Southern Democrats impaled themselves on the issue of slavery ushered in a constellation of mercantilist policies that aggrandized the state and brought important economic sectors under the strong influence of those industrial barons that have formed the social support system of the Republican Party ever since – transportation, energy, communications, industrial protection, banking, and a policy of weighting industrial development higher than agriculture and environmental protection. It made Hamilton’s program seem almost benign, but the roots of the Republican Party’s mercantilist notions was clear enough.


Later American Progressives rebelled at the preposterous top heavy social structure that resulted, but the first generation of Progressives were Republican almost to a man so their reforms took place with the economic paradigm of corporatist America – regulating railroads to help support prices and cartels, the assumption that big business trusts were an inevitable product of an un-manipulated economy (instead of an outgrowth of mercantilism), and most importantly the creation of a corporate monopoly over the banking system known as the Federal Reserve system. The study of the corporatist effects of Progressivism was covered extensively by historian Gabriel Kolko in his Railroads and Regulation, 1877–1916 and The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916.


While the Democratic Party eventually recovered politically, it was no longer liberal in the original, Jeffersonian sense even though it is still called liberal in the United States. Its southern wing was marred by Jim Crow Laws and the KKK while the northern Democrats eventually adopted the Progressive attitude of a “scientifically” managed economy that had the unfortunate result of treating humans as objects to be manipulated and organized by political authority – which owed much of its outlook to Aguste Comte, Marx, and a social interpretation of Darwin where errors of interpretation of Darwin included a nationalist conception of survival of the fittest, eugenics, and race-based immigration policies. The illiberalism of the Progressive Movement in the United States is a major reason for the top heavy wealth distribution.


For the past four or five generations the American government has exerted a major influence on the economy – and thus capital formations – and the wealthy and well-established have exerted a major influence on government policies. Just the social and economic importance of a government-banking relationship for those seeking to capture capital via the political means and to the detriment of the social means can be seen in the repeating drama of American politics relating to banking.


• Jefferson-Hamilton – resulting in Jefferson’s resignation and Madison removing himself from his previous allegiance with Hamilton, with whom he authored the Federalist Papers.

• Madison’s reversal on the idea of a national bank when he was President - supporting a second bank to help with war debt again (and suggesting a relationship be war and state finance that bears modern consideration); the second bank soon flooded the country with paper credit and triggered the depression of 1819

• Andrew Jackson – Nicholas Biddle struggle over the expiration of the second bank’s charter where Jackson risked his political career while Biddle purposefully trigged a depression by withdrawing credit for reasons political gain; only the first example of the political non-neutrality of centralized banks

• The Whig Party’s repeated and ultimate failure to reestablish centralized banking

• The banking “reform” undertaken by Lincoln Republicans after Southern Democrats wrecked their Party

• William Jennings Bryan’s populist rages over currency issues

• The establishment of the Federal Reserve System in 1913 once it became clear that men like J. P. Morgan could no longer manage their own over-expansions of credit to their business associates; thus the profits of credit expansion remained private while the risks became a public concern

• The new Federal Reserve’s easy credit policies - that kept the belligerents in WWI going for a devastatingly long period and lined the pockets of J. P. Morgan with war loans and soon enough fueled the bubble during the 1920’s that came crashing down in 1929

• Franklin Roosevelt’s currency reform in 1933

• The American imposed Bretton Woods international monetary system just after WWII that enthroned the American dollar

• The Federal Reserve’s easy credit policies – that drained gold from Fort Knox after WWII and drove the rising inflation of the 1950’s, 1960’s, and 1970’s that triggered Richard Nixon’s currency reform in 1971 which has helped undermine the middle class ever since

• The “stagflation” of the late 1970’s that helped elect Ronald Reagan

• The increasing severe boom bust cycle seen in 1988, 2000-01, and 2008 (and maybe another one soon)


So the people may have become “less fearful of speaking out to authority” but their “just demands” can be satisfied only in a responsive political system free of vested interest control over the capital-forming economy. This distinction about the manner in which capital is acquired is something liberals in America once understood but Progressives did not and do not.


I suspect the lesson will have to be relearned that hard way.
 

fascinating

Ad Honorem
Dec 2011
2,418
BrutusofNY said
In my view the phrase “relatively reduce” is a key point here. It obviously implies a wealthier class but does not require the crushing, even life-choking, poverty we have seem at the lower social structures of civilizations when they are in a dissipated condition.
Past civilisations were generally at a low economic level - by our standards, almost everyone was materially poor. What information we have available seems to suggest a grotesquely high child mortality rate and a very low life expectancy at birth (maybe not even reaching the 30s). Also, economic growth, over the long term, was virtually zero, meaning the size of the economic pie was essentially fixed, so if anyone got richer, that meant that others would be poorer.
I would substitute the word consensus for democratically here to emphasis a voluntary cooperation as opposed to a forced “concentration of capital” that you referred to, and to note, as did you, the regular resort to force in the rise of expansive social systems and empires. While a comparison between Carthage and Rome is far from perfect as Carthage warred with Sicily prior to its conflicts with Rome, but I think it is fair to say that coercion played a far larger role in the empire of the latter than the former.
All civilisations used coercion, in the form of warring, killing and enslaving. Let's leave the question of who did the most to a different time.

In a similar manner, the capital acquisitions of ancient Athens were largely voluntary prior to the Peloponnesian War. The Athenian decision to accept the proposal of the populist Themistocles in 483 BC that the wealth derived from the silver mines of Laurion be used to construct 200 triremes that were used to conduct naval campaigns against the Persian military was the start of Athens' militarization of capital – an act that appears merely defensive until one remembers that Athens not long before had helped foster rebellion against Persia in the Ionian Revolt.
I don't want to get bogged down in details, which might take us away from the essentially simple point I am making. How was that wealth from the silver mines acquired? It was mined by thousands of condemned criminals and slaves wasn't it? Democratic Athens was about 20,000 free people supported by 300,000 slaves wasn't it? That's an example of rich and poor.

In the absence of coercion, it is not obvious to me that that concentrations of capital need to be controlled in any consciously governing sense – after all, the idea of control instantly raises the question of “control by whom and for what purpose?”
I don't know what you mean. Capital has to be managed by someone eg someone with a fortune has to decide where he is going to put his money so it is safe and doesn't dwindle with inflation. Perhaps he will appoint a steward, or in modern-day finance there are fund managers and such like. If the state owns capital such as factories and land, it must ensure that it is used profitably, by taking control and managing it. But the main point I am making is that some have lots of capital, some have very little, and many have virtually nothing, there are rich people and poor people, and I am asking you to consider how that has come about. It is the rich who have the control of most of the capital - how did they get that control?

Furthermore, if a person dies, the question arises, who should take control, then, of the capital he has left?

The rise of sophisticated civilizations has been enabled by humans, in a degree far greater than any other known species, to create, store, and cooperatively distribute those resources necessary for humans to effectively sustain their existence on a plane some measure above animalistic survival.
What evidence is there that there was co-operation in the distribution of resources in pre-democratic civilisations?

But my primary point here is one between voluntary and coercive approaches to acquisition of assets – with the latter making no additions to a given stock of capital and doing nothing to shrink social distances.
All civilisations have laws against theft, but many civilisations have engaged in the violent robbery of goods and people from areas outside of their own nation. Within the nation, I don't know what exactly is voluntary, in a pre-democratic society, where the laws are made by the rich, in the distribution of capital.
 

fascinating

Ad Honorem
Dec 2011
2,418
I agree with this, with the caveat that the “extremely slow loosening of the vice-like grip of the rich and powerful over the great majority of people” began to be reversed as the state gained increased control over economic activity – in Oppenheimer’s terms a diminution of voluntary social means and power regarding capital formation and an increase in coercive political power and capital appropriation.


In England this process began with the militarism of Cromwell (in the name of the people of course) and accelerated radically after the establishment of the centralized Bank of England in 1694 with its growing grip on currency control – after which the boom-bust economic cycle clearly appeared and the British Empire began to acquire its dominating status. Initially, true social power capital was still being created relatively more than the political power wealth appropriation (except in the colonies) but the trend toward political control of wealth was established where by the wealthy used state authority to augment their position.
The state always had control of the currency - somebody has to (I suppose Bitcoin might be an example of a currency without external control but, on the other hand, the managers of Bitcoin are utilising block-chain processing and a complex algorithm to ensure proper management of it). When a state decides to use money instead of bartering, it must decide what the denominations are, what their value is, and how much is to be issued. So it must keep a grip on currency control, mustn't it? Similarly the free market does not mean a free-for-all, some regulations must be put in place to make a market eg weight standards so that everyone is using the some weight and volume measures.

The rich in power did distort the free market by such practices as selling (to someone rich, obviously) the right of monopoly over the trade of some essential goods. In the UK, such practices were stopped in the 19th century, as the state became more democratic. The corn laws, which you mention, are an example of the rich dominating the state and using state power to feather their own nests - ultimately at the expense of the poor of course.
 

fascinating

Ad Honorem
Dec 2011
2,418
So the people may have become “less fearful of speaking out to authority” but their “just demands” can be satisfied only in a responsive political system free of vested interest control over the capital-forming economy. This distinction about the manner in which capital is acquired is something liberals in America once understood but Progressives did not and do not.
New capital is formed like everything else, work is done to produce it. Maybe those who do the work make capital should own it. Just a thought.
 
Jul 2019
124
Pale Blue Dot - Moonshine Quadrant
Three posts again for me. As far back as elementary school, my teachers were complaining about my wordiness and run-on sentences.

Past civilisations were generally at a low economic level - by our standards, almost everyone was materially poor. What information we have available seems to suggest a grotesquely high child mortality rate and a very low life expectancy at birth (maybe not even reaching the 30s). Also, economic growth, over the long term, was virtually zero, meaning the size of the economic pie was essentially fixed, so if anyone got richer, that meant that others would be poorer.
I do not believe there can be a civilization without economic growth because the capital formations necessary for creative leisure would be lacking. Zero sum is what happens when Oppenheimer’s political means of acquisition occurs; but to the extent the social means were/are at work the game is not zero sum.

Even in ancient civilizations there were very large concentrations of wealth that was produced by someone – although I agree that much of that wealth produced was appropriated by what I think you are saying were the wealthy class while I am saying the ruling class – they are usually related but they are not exactly the same. There is, of course, considerable overlap between the two but that overlap was not complete. In any civilization there is stratification with intermediate classes – merchants, land owning famers, the Metics in ancient Greece, traders and craftsmen in ancient Persia, etc.

All civilisations used coercion, in the form of warring, killing and enslaving. Let's leave the question of who did the most to a different time.
Fair enough – also it is the violent means of acquiring or maintaining wealth and control that is my general point overall.

I don't want to get bogged down in details, which might take us away from the essentially simple point I am making. How was that wealth from the silver mines acquired? It was mined by thousands of condemned criminals and slaves wasn't it? Democratic Athens was about 20,000 free people supported by 300,000 slaves wasn't it? That's an example of rich and poor.
Agree – but the slaves in the silver mines are also an example of the coercion that I am referring to. It is my suspicion that if you and I were to sit down with a large vessel of our favorite beverage and in the course of our conversation put actual names to the situations to which we are referring our list individual of names might well look very similar. For the wealthy have all too often used coercion to become wealthy and to maintain that wealth. But I am trying to leave room for those who have acquired wealth through non-violent means – means which to me are a morally justifiable acquisition of wealth.

In the late 19th century in the United States with the high tariffs and state-sanctioned railroad construction, the wealth distribution became scandalously top heavy, with the result that there is a whole class of people known today as Robber Barons. But there was one man named James J. Hill, who today is lumped with the Robber Barons, who build his Great Northern Railway without a nickel of government subsidy or land grants; unlike other railroads who often priced gouged because of their transportation monopoly he cut shipping rates to farmers; he paid his employees well; and his railroad never fell into bankruptcy that regularly gripped other railroads during the credit-induced boom-bust economy of the era.

Although he later got tangled up with men like J. P. Morgan, E. H. Harriman, William Rockefeller and Jacob Schiff, his initial success was truly legitimate – as opposed to the profits of men like Charles Crocker, Jay Gould, E. H. Harriman, Leland Stanford, and Charles Tyson Yerkes. Thus, I see a qualitative difference between Hill and the others that I find important.

I don't know what you mean. Capital has to be managed by someone eg someone with a fortune has to decide where he is going to put his money so it is safe and doesn't dwindle with inflation. Perhaps he will appoint a steward, or in modern-day finance there are fund managers and such like. If the state owns capital such as factories and land, it must ensure that it is used profitably, by taking control and managing it. But the main point I am making is that some have lots of capital, some have very little, and many have virtually nothing, there are rich people and poor people, and I am asking you to consider how that has come about. It is the rich who have the control of most of the capital - how did they get that control?
Capital should be (a normative claim I recognize) managed by its legitimate owners, the people that have created it.

Inflation, which is unfortunately taken for granted without examining why it exists, is an essential part of how the wealthy stay in control in a modern economy. It is a coercive theft by those who, in whatever fashion, control the monetary system. Rulers traditionally debased the coinage via shaving edges or a process of recall and reissue with the precious metal reduced. Today it is done with the banking system of which rulers have long sought to control and have increasingly done so - almost in total now - since the Bank of England was established late in the 17th century after Charles II repudiated his debts and thus bankrupted the private goldsmiths who had been the traditional warehouses of storage for the capital represented by private gold holdings and those of the Crown.

The United States was the last holdout against state control of the banking system until 1913 when the Federal Reserve was establish under the rubric of popular control. But if you look at the century-long revolving door between the FED and Wall Street – or the ECB and its political/economic associates in Europe – that notion of popular control is repudiated. In the aftermath of 1913 the U. S. and Europe has had nothing but war, monetary debasement, and debt. Centralized control of banking is certainly not the only reason for that, but it is a major player in how the ruling elite escaped control. All the major currencies are just shadows of the earlier selves – and that lost value was appropriated by central bank political means and largely wasted in war.

Beardsley Ruml, Chairman of the Federal Reserve Bank of New York pointed to the loss of popular control over banking (and inflation) in his January 1946 article entitled Taxes For Revenue are Obsolete published in American Affairs Magazine:

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity.

It follows that our Federal Government has final freedom from the money market in meeting its financial requirements.


Note that Ruml views the government and those who run it as separate from the control of the people and their social and economic institutions. His is not at all a notion sympathetic toward a social power being exerted in society. Ruml himself would, no doubt, deny what I just wrote in a paternalistic Noblesse Oblige or Kipling’s White Man’s Burden sense – to help take care of the inferiors. But that is anti-democratic in the extreme even if the establishment of the FED was initially trumpeted as a victory for popular control.

Some knew better and said so. Charles A. Lindbergh, Sr. (father of the aviator) was a Senator from Minnesota who announced with the formation America’s central bank in 1913 that:

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."
 
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Pale Blue Dot - Moonshine Quadrant
Furthermore, if a person dies, the question arises, who should take control, then, of the capital he has left?
I see no reason no reason why his/her heirs should not inherent the wealth/capital. Certainly, the rulers of the state have no moral claim on it. In a free, socially flexible society wealth is created and lost based on its social utility and not a coercive grab by political power. The old American adage about “three generations, shirtsleeves to shirt sleeves” points to this as did Karl Marx who noted that the ruling class in America was always changing. That socially flexibility largely began to stall in the U. S. after the Civil War got worse with the success of the Republican Progressives, and America today ranks very low on the social mobility scale.

What evidence is there that there was co-operation in the distribution of resources in pre-democratic civilisations?
Traders, spice merchants, metal workers, potters, jewelers, produce markets, fairs, etc. – basically anyone engaged in voluntary trade; and they existed in societies like China, Persia, and the Muslim empire that never even sniffed democracy. Anyone who had a measure of freedom partook in such activity. Democracy is often associated with freedom but they are not at all the same thing. Plato and Aristotle denigrated democracy largely because of the chaotic democratic conditions in Athens as the Peloponnesian War worked its social evil. Even the Knights Templars, whatever else they may or may not have been, were international bankers of the most honest kind. Jesus Huerta de Soto in his Money, Bank Credit, and Economic Cycles notes that

The Templars also carried out transfers of funds, charging a set amount for transportation and protection. Moreover, they made loans of their own resources and did not violate the safekeeping principle on demand deposits. The order acquired a growing prosperity which aroused the fear and envy of many people, until Philip the Fair, the King of France, decided to dissolve it. He condemned those in charge to be burned at the stake (including Jacques de Molay, the Grand Maître), with the prime objective of appropriating all of the order’s riches.


Philip the Fair, a typically violent, grasping ruler, also robbed Jews of their wealth and destroyed the usefulness of the Fairs of Champagne – a major center of voluntary economic activity at the era.

De Soto is an excellent source on the long history of banking shenanigans which are an underrated because governments always need money and their temptation of manipulate the money is all too often irresistible.

All civilisations have laws against theft, but many civilisations have engaged in the violent robbery of goods and people from areas outside of their own nation. Within the nation, I don't know what exactly is voluntary, in a pre-democratic society, where the laws are made by the rich, in the distribution of capital.
Yes, however those who pass and enforce laws against theft are the ones who determine what theft is – be they Confederate slave owners defending their “property,” or King Charles II bankrupting England’s goldsmiths, or the Paris Revolutionaries and Henry VIII both appropriating church land, or attempts of the ruling class to limit wages in the aftermath of the Black Death, the plunder of the provinces by the Roman army, the murder of Tiberius Gracchus when he sought to re-enfranchise the Roman middle class farmer that has been destroyed by war and imported slaves, or the Athenian democracy’s theft of the wealth of the Delian League in 454 BC when it used the excuse of a failed League expedition in Egypt to move the League treasury to Athens where the wealth fueled the Athenian Empire and before long the Peloponnesian War.

Today state-sanction theft has been raised to a high art form via currency depreciation via the central bank monopoly where new money that devalues the existing money in our pockets is accessed first by large bank customers who receive the current value of this new money before the debasement process works its way through the economy. Asset forfeiture laws are another way theft is carried out – many times the assets are seized before there is a conviction and it a growing source of government revenue.

Example: Counterfeiting (the creation of money) has long been illegal in any society that has developed beyond economic barter. Like all laws of negative restraint (as opposed to laws of positive command) those banning counterfeiting have been created because counterfeiting has obviously harmful social effects. In the United States, starting with high controversy in the American Civil War and culminating in 1933, the political state has made counterfeiting legal for its authorized agents. So it is no longer illegal for the political state to inject new money into the economy, and there is an entire ideology developed by an intellectual priesthood as justification for such activity.

But have the harmful social effects of counterfeiting been prevented just because there is a veneer of legality? The failing condition of the middle class and the top-heavy wealth distribution delivers an emphatic “No!” Although I lack the detailed knowledge to spin out the specific details, the situation in Europe appears similar. Indeed, it appears to me that the political drama associated with the European Union (England, Italy, Greece, etc.) is, to a significant degree, a product of the economic control exercised by the European Central Bank.