Ray Harvey

There’s never been a famine in the United States, and one thing alone is responsible for this: private property rights.

Capitalistic societies are the wealthiest societies in the history of the world, and it is the absence of fully protected property that creates poverty. As the Peruvian economist Hernando de Soto puts it in his instructive book The Mystery of Capital:

Many of the poorest countries in the world possess enormous amounts of capital, but their ownership is insecure because of faulty or nonexistent property law or property rights protection. The value of private savings in the ‘poor’ countries of the world is forty times the amount of foreign aid they have received since 1945. [The citizens of poorer countries] hold these resources in defective forms: houses built on land whose ownership rights are not adequately recorded, unincorporated businesses with undefined liability, industries located where financiers and investors cannot see them. Because the rights to these possessions are not adequately documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles, cannot be used as collateral…

Compare that to property laws in the west “where every parcel of land, every building, every piece of equipment, or store of inventories is represented in a property document that is the visible sign of a vast hidden process that connects all these assets to the rest of the economy.”

Private property is the crux of wealth. And property is nothing more, or less, than an extension of person.

What is capitalism? Capitalism is a social system based upon private ownership of the means of production and the preeminence of the individual over the group.

The hour of capitalism’s greatest triumph is its hour of crisis. The fall of the Berlin Wall ended more than a century of political competition between capitalism and communism. Capitalism stands alone as the only feasible way to rationally organize a modern economy. At this moment in history, no responsible nation has a choice (ibid).

A reader writes:

Dear Ray Harvey! You are a true friend to the workingman, such as me. Your book Leave Us Alone should be required reading in our schools.

Don’t you get sick and tired of capitalism being everyone’s escape goat, like I do? The halls of congress are crowded with representatives of the “X” industry, saying The “X” industry is sick and dying. The “X” industry must be saved!! Only tariffs and subsidies can save the X industry, and if the X industry dies, workers will be thrown out onto the streets. But if congress acts promply (LOL!!) the X industry can be saved, and then it will buy equiptment from other industries, and more men will be employed. But congress once tried to “save silver” in just such a way to “help the East” when one of its results was to force China into deflation and force China off that basis? The United States Treasury was forced to acquire hoards of unnecessary silver to store in its vaults, at ridiculous prices, the essential aims of the “silver senators” achievable at a fraction of the harm by the payment of the frank subsidy to the mine owners or to there workers. But congress would never have approved a naked steal of this sort unaccompanied by ideological flimflam regarding “silver’s essential role in the currency” as with the Guffey Act under which the coal mines (in which I work) were not permitted but compelled to conspire together to NOT sell below fixed minimum prices fixed by the government. Though congress had started out to fix “the” price of coal, the government soon found itself (because of different sizes, 1000s of mines, and 1000s of different destinations by rail, truck, and barge) fixing 350,000 separate prices for coal! One affect this had of trying to keep coal prices above the competitive market prices was to accelerate the tendency by consumers toward the substitution of other energy sources such as natural gas and oil. If people didn’t expect to be feed off the government “teet” all the time this wouldn’t happen, I feel. Don’t you?

Keep up the great work, Ray Harvey!

John

Capitalism is a social system based upon private ownership of the means of production and the preeminence of the individual over the group.

The word capitalism was popularized by Karl Marx, in the 1850′s. Marx used it to denounce private ownership of the means of production and the autonomous workings of the free market.

Capitalism is an entire political theory — not, as is sometimes supposed, merely economic. In this regard — and only in this regard — it is akin to communism.

The exclusively economic component of capitalism may be described as the right to life, liberty, and property applied to commerce and industry.

Pure laissez-faire capitalism, which does not exist now and has never existed fully, means that government removes itself from all commerce (and that includes healthcare), in the same way that government removes itself from your bedroom.

In addition to early America, there is at least one other society that has come close to laissez faire:

After the War Hong Kong had no minimum wage, low and simple taxes, zero tariffs, zero capital controls, and a stable legal environment. Postwar Hong Kong went as far with economic laissez faire as any other country in history. This resulted in economic development that benefited virtually all the people of Hong Kong. Living standards increased substantially even for the poorest people in Hong Kong (Stefan Karlsson, Inflation Leads to Protectionism, 2004).

Capitalism means that commerce and industry are entirely privatized.

Corporations that receive government subsidies are not capitalistic. They’re the opposite: they’re mercantilistic.

The same is true of small businesses and farms that receive subsidies.

Trade tariffs are not capitalistic but mercantilistic.

Mercantilism is an ancient and more primitive form of socialism. It is socialism before Karl Marx.

Political theory is the theory of government, and government, properly defined, is the body politic that possesses rule over a certain geographic region.

Economics is the science of production and exchange, but production does not just mean agriculture, although that is certainly included.

Productive work is any kind of work geared toward the task of survival — survival in the fully human sense of the word, including, therefore, arts, sports, industry, and so on.

Thus the essential questions of government are these:

Do humans exist by right or by permission? Are we free by nature? If so, why? Are we free to produce, exchange, and exist, or do politicians, elected or not, have authority and jurisdiction over the lives of us — to any degree?

Obviously, there’s only one sane answer to all these questions; for to say that humans do not exist by right is the same as saying humans only exist when someone permits us to. But if that were true, we must then ask: who permits? And why? And who gives these people permission?

Fundamentally, political freedom can be achieved only through recognizing each and every single individual’s right to life.

If, then, you believe that we are each individuated and sovereign, and if you believe that our lives are entirely our own and not the government’s and not another’s, if, in short, you believe “we each have a property in our person,” as John Locke said, then you believe in the inalienable right to life, liberty, and property.

You believe, therefore, in laissez-faire capitalism.