Socialism: The slide back into feudalism

Business, Government, & Freedom of Association
(after Ayn Rand, Thomas Sowell, Milton Friedman, etc.)

by Prof. Kelley L. Ross

Unspoken assumptions of all socialistic criticism of capitalism, as well as of American court decisions since the New Deal, are that businesses in some sense are an arm of the government, that doing business is a privilege that we need not allow except under certain conditions, and that the public has a right to be served by businesses in certain ways that impose duties on them that we do not impose on other individuals in private association. All of the assumptions are wrong and even self-contradictory. Business is regarded as a privilege because the public "allows" businessmen to make a living and profit. On the other hand, it is an additional unspoken assumption that everyone has a right to a living or a right to the services offered by businesses, which means that the activities which businesses can carry out with our permission are nevertheless things they owe to us. We need both the jobs offered and the services rendered by businesses, therefore we have a right to them. It is a paradoxical right, however, to make someone owe us something that they are under no obligation to offer--since, so far, no one is compelled to go into business. It is also a paradoxical requirement to impose conditions on services offered to us that actually damage the ability of people to offer them well. So we act as though they owe us services that we actually prevent them from doing well.

There is a lurking sterile, negative resentment in all this, that, instead of being grateful for the enterprise that provides abundance and opportunity hitherto unknown in human history, we dislike the persons and motives of those who do the real driving work in the system. By supplying us good things, we think they should be doing it for us instead of for themselves, even while we are busy doing things against them and (we think) for ourselves that inevitably damage their living and their ability to supply us good things. This is the basic craziness of socialist thinking, but, despite the fall of communism and decades of failure of socialist nostrums, it is still strongly with us. What it inevitably leads to is faith in government. If businessmen get disgusted with hassles and recriminations against them, they can just quit or move elsewhere, leaving us with nothing. But it does leave us with government, and presumably government can be compelled to do anything or provide us with whatever we want or need--and it is certainly the obligation of government to do that as it was never the obligation of any businessman. We might even think that was the trouble with businesses: they should have been like government, responding to our needs and rights, but they weren't. Now we can get government to provide all good things in a disinterested and fair way.

Unfortunately, governments existed long before capitalistic business, and governments even existed that believed their purpose was disinterested benevolence for the needs of the people (as in Confucianism or with certain Christian rulers); but those governments never produced the wealth and opportunity that capitalism did, and they all maintained a hierarchy based on the difference between the patronage of the rulers and the vassalage of the ruled. Those forms were reproduced in the neo-feudalism of the Soviet Union; and they are reproduced in our own society whenever anyone from the IRS, the DEA, or social services (or many other government boards, bureaus, and agencies) shows up to remind people of their civil duty, to punish them for doing something in harmless privacy that the government disapproves of, or to minister to their helpless dependency on the benevolence of society. The paternalism of distant authoritarian benevolence becomes the maternalism of smothering, intrusive, petty dictatorship, "for your own good." This is the deeply reactionary nature of socialism: it looks for a society of archaic peonage and dependence. The Soviet Union collapsed under the weight of its own contradictions (as Marx himself would have said), but the use of any socialistic assumptions merely produces different degrees of dependence, contradiction, and vassalage.

A basic error in all socialist resentment is that businessmen are always thought of as "them" and not "us." We need "them" for jobs because we never think of "us" as providing our own livelihood. That is the fatal conceit, for it starts us at a disadvantage of dependency already; and if we are to be helplessly dependent on something, it may as well be benevolent government as profit seeking businesses. The key to capitalism, however, is that business is not "them." "Opportunity" does not mean that we can go to "them" to get what we need. "Opportunity" means that we take care of ourselves and that business is just a set of private, free transactions between individuals that have nothing to do with government and that are governed by the same moral rules as any other transactions of private association. This is the principle of Freedom of Association applied to business as much as to private relationships. Capitalism therefore does not mean benevolent government, just government that gets out of the way....but is ready to be called in against force or fraud in business dealings as in any other dealings between persons. Government exists to secure the moral enabling conditions of the free market--the rights of person, property, and contract. Limiting the freedom of business transactions in arbitrary or moralistic ways inevitably gives rise to a "black market" because people continue to trade in ways that they regard as innocent and inoffensive, or at least that they regard as providing things they want, even if the law forbids it.

Business is not "them" most importantly because anyone can start a business. All one needs is a bit of capital. That can be gotten in any number of ways. From savings, from family, from friends, from banks, from investors, etc. Even groups that historically couldn't get loans because of discrimination, especially Jewish, Chinese, and Japanese immigrants in America, were able to start businesses by pooling their small resources into revolving credit associations that could finance businesses one at a time. The result of socialist hostility to business, however, loading it with regulations, licenses, taxes, etc., is to make it increasingly difficult for just anyone to start or run businesses. The fruit of hostility towards "them" is to actually make us more dependent on "them" than ever before. This begins the slide back into feudalism.

Business, Government, & Freedom of Association