Paul's Passing Thoughts

The following is part seven of a nine-part series.
Taken from John Immel’s fifth session
at the 2014 Conference on Gospel Discernment and Spiritual Tyranny
~ Edited by Andy Young

The Rise of National Socialism and the Assault on Capitalism, Continued…

Capitalism has become a byword in the United States, actually a byword globally. Rarely do you hear anyone speak openly about being a capitalist, and that is because there is an-all out assault to destroy capitalism. And that assault is largely led by the fact that most people have no clue what it is. No one has ever explained it to them. Capitalism is not specifically economics, and most people are only vaguely aware of what economics are.

There is a common mis-conception that there are forms of capitalism and that various governments practice various forms of capitalism. This is actually not true. There is only one form of capitalism. In the 18th century, a group of French economists called the Physiocrats identified that wealth was the product of individual production. John Locke arrived at a similar conclusion – that property was the product of human labor; his reasoning power and his action to organize whatever his substance is.

The Physiocrats said that the nature of production is the source of wealth, and they came up with the term “laissez-faire capitalism”, which literally means “let them do as they please.” They identified correctly that individuals will solve their own problems with their own production and that the government should not be anywhere close to it.   This was a profound contrast to the traditional explanation of a nation’s wealth, e.g., it was either the wealth of kings, the country’s gold reserves, the country’s arable land. They were the first to formulate that government should keep their hands off of economic transactions.

This is where the issue of “forms” of capitalism comes into play. Capitalism is like the definition of water. The chemical formula of water is H₂O. Now you can add a lot of things to H₂O, and you can add some tasty things to H₂O. You can add some sugar and some Kool-Aid, and you still have water, but you also have now Kool-Aid. And you can drink it. But if you are in the Jim Jones cult and you add something else, suddenly water becomes poison. And my metaphor is apt with capitalism. As John Locke correctly identified, it is a man’s labor that produces prosperity. A man produces to advance and sustain his life, and that production is his property alone. There is no distinction between the man and that which he produces.

When you start out as a farmer in a basic economy, you have a seed of corn, you plant a seed of corn, and you have to wait 12 weeks for that seed of corn to come up and actually have a harvest. Now if you are only planting one seed and getting one ear of corn out of your cornstalk, you are going to be hungry.

But let us assume you have the ability to produce thousands of seeds of corn and then have a specific harvest. Now you spend all of your time planting that corn and then specifically getting that harvest. But corn is not shoes, and it is not shirts, and it is not beef. So you have to have a means by which to get these other things. The only peaceable way to get those other things is to trade, and the nature of trade means without force.

There is no compulsion in a free economic transaction. The parties are willing, and the parties decide on the values that they want to trade. That’s it. This concept is only possible in a politically free environment. Capitalism is the product of liberty, and this is crucial to understand.   It is the individuals who enter into social contracts, and it is the government that is given the limited permission to act. It is only within that environment that people are free to trade. There is no compulsion, and when I say compulsion, I mean force. I mean violence. Just because you want to eat, your necessity is not the guy who has food. You do not get food from him by compelling him to give it to you. If you were by yourself out in the middle of nowhere and you were hungry, you would still have to work to feed yourself.

Conversely, just because you would go to a guy who already has the food does not mean he compels you to come to him to get food. The responsibility of your survival, of individual survival, is the responsibility of the individual. The peaceable way to make that happen is to exchange value for value. In a social context, there are many people offering value into this environment, and you have the ability to pick whatever you want or not. The absence of compulsion, the absence of violence, is the central theme.

There are only two kinds of markets: compulsory or free. In a compulsory market, you have no choice about what can be bought or sold. There is no choice about the disposal of property, and there is no recognition of private property. In the United States we do not have a capitalism economy. We have a mixed economy because we have compulsion. We have to ask the government permission to take action to exchange our goods and services. This is not a capitalist economy.

The other kind of market is a free market. This presumes private property. The definition of private property is the right to an action, the right to dispose of that property or the right to retain that property. A free market then is simply two people willingly exchanging values. A free market is never present when there is fraud, which is a misrepresentation of reality, where you have specifically deceived the other party about the nature of reality. A free market is never present when there is force or implied force, which is extortion.

So a free market only exists where there is private property and free individuals. Free individuals produce value, and they must be entitled to their private property, and private property by definition means they can dispose of it as they see fit.

Next we have to have a root discussion of money. You have to understand what money is and what money is not. You don’t work to get money. You work to create money. Consider once again the seed planting example. After you harvest your field you now have a big sack of corn. Your neighbor may need corn to feed to his herd of cows so he is willing to trade you a sack corn for one cow. The problem is you may not need a cow, what you need are new tires for your tractor. Obviously, cows are not tires.

In this situation, trade becomes an inefficient means of exchange. In addition, payment in kind is impractical at a distance. What is needed is the creation of a medium of exchange, and this was the emergence of money. You needed a means by which you could represent a bag of corn or a cow or tires for the tractor.

Furthermore, when you are done harvesting your corn you now have tens of thousands of seeds. What you do not eat between the end of harvest and the beginning of next season is your excess. This is work (production) that is now stagnant. It is not doing anything. It is not producing anything. This excess prosperity is called capital. You need that excess prosperity to continue through time which allows you to plan for your next action of prosperity, your work to produce more.

Well, in an agricultural environment the distance on your production is your growing cycles, maybe a year. But the more industrialized you get, the longer your production cycle, your sight line, has to be, so you need larger and larger holds of production held in store. This is the root of capital. It is production held in a static state that you have the ability to then distribute down through time so you can produce your next action.

Well, of course, for lots of reasons, gold and silver became the standard means by which you could actually take a cow and exchange it for corn, and that coin then began to hold value. Over time, a particularly productive person might accumulate lots of coin. That coin represents capital, but that accumulation of capital is not producing anything. At the same time, this productive individual has no reason to give up this capital unless he has some incentive to put his gold at risk. In a capitalist society there is a fundamental need to take capital (static production) and then give it the opportunity to be put into production either by the holders of the capital directly or by other people who want to take the risk. This is the basis for interest or usery.

Now in a free market, in a capitalist culture, you have no guarantees. The government is not there to penalize you, and it is not there to advantage you. If at any point the government enters in and compels or restrains economic action, we are no longer talking about capitalism.

The single greatest expansion of prosperity occurred between the 18th century and the 19th century. And the reason the greatest expansion of prosperity occurred is precisely because John Locke correctly defined the exact requirements for government. The United States of America, and for a very brief time Great Britain, put into practice the logical result which was “laissez-faire” capitalism. This time period is called the Industrial Revolution. Man set out to solve his own problems, and wealth exploded.

There is a common misconception then when someone gains wealth it is because he took it from someone else, as if there is a giant pie, and every time someone takes a piece there is less for everyone else. There is no pool out there somewhere called “wealth” from which people partake. Wealth is created when individuals produce. Therefore when production increases, so does wealth. Man creates his own level of prosperity. He creates it every day he applies his work product.

The assault against liberty and capitalism and the production of wealth started almost immediately. It specifically started with doctrines that were designed to:

1. Eradicate reason from man
2. Place man back in state control

This two-fold philosophical assault against wealth is what led to the rise of Hegel and then Karl Marx. These men crafted an immoral justification for the destruction of capitalism. But here is the thing. You cannot destroy capitalism without destroying liberty, and you cannot destroy liberty without destroying capitalism. Since capitalism is merely free individuals acting to exchange values willingly, the moment you put the government in charge of either side of the equation, either production or person, you are destroying liberty.   This is exactly what happened at the turn of the 19th century.

Even though the First World War did not go well for Germany, it still became an enormously successful industrial nation. They had some totally inept leadership. The Weimar Republic was a joke. In their minds they were still Prussian. They were still sort of under monarchy and tried to throw that off somewhat.

Following WWI the rest of Europe decided to pile on the German people and really make them pay for it. Over time that began to wear on them. With economic collapse right on the horizon, you can begin to understand why the German people consistently discussed the issue of greed. They resented other people’s prosperity, and this is central to the rise of National Socialism.

Here are some excerpts of what became the National Socialist platform, originally published in 1920. This will give you some sense of what they are after. As you read through these, pay close attention to what they advocated, and contrast that with John Locke, and liberty, and the United States.

“12. In view of the tremendous sacrifices in property and blood demanded of the nation by every war, personal gain from the war must be termed a crime against the nation. We therefore demand the total confiscation of all war profits.”

Now think of what this really means. They are saying sacrifice is an ethical ideal, and because some sacrificed, anybody who prospered from their sacrifice, equating their profit with sacrifice, must necessarily have all of what they created confiscated. This completely eliminates the reality that the government is what went to war. The government is what caused the death and destruction, and in order to fight the war, the government asked businesses to create this production.   Now they are blaming profit for their problems when in actual fact it was the government’s fault.

“13. We demand the nationalization of all enterprises converted into corporations.”

“14. We demand profit sharing in large enterprises.”

Where have you heard that in modern American culture? The endless determination to denounce big business as if the people who do not work have a moral right to the product of somebody else’s work?

“15. We demand a large-scale development of old age pension schemes.

“16. We demand the creation and maintenance of a sound middle class, the immediate communalization of large department stores which are to be leased at low rates to small tradesmen.

“17. We demand the most careful consideration for the owners of small businesses in orders placed by national, state, or community authorities.”

This is the absolute eradication of private property. For people who have been successful, the nature of their success necessarily means that the government should somehow penalize them for their success. The communalization of large department stores. The reason that large department stores appeared is because they became better at delivering the best quality products for the best price to the most people. How many times have you heard people say that Walmart is somehow fundamentally evil? Yet everybody benefits because Walmart gets you the products you are willing to pay for at some of the best prices anywhere. Your life is better, and yet somehow because Walmart cannot be fleeced every five minutes for its money there is something fundamentally evil about that.

“18. We demand land reforms in accord with our national needs and a law for expropriation without compensation of land for public purposes, abolition of ground rents and prevention of all speculation in land.”

This is talking about the seizing of property.

“19. We demand ruthless battle against those who harm the common good by their activities…”

Now watch what they define as harm.

“…persons committing base crimes against the people, usurers, profiteers, etc., and are punished by death without regard to religion or race.”

In other words, bankers. Bankers were Jews. Jews had capital. Profiteers, people who made money. Give over your profits or we are going to kill you.

When it came right down to it, they could declare anybody they wanted to be a profiteer, and that is exactly what they did. That was the real focus of the Jewish hatred, centralized in their ultimate covetousness. They wanted prosperity, but in their view the way to get prosperity was to seize it from most people who had created it or to kill them. The presumption was that if somebody else has it, if I do violence to them, I can get it.

“The Party as such stands for positive Christianity, without associating itself with any particular denomination. It fights against the Jewish-materialistic spirit within and around us, and is convinced that a permanent revival of our nation can be achieved only from within, on the basis of Public Interest before Private Interest.”

Take note of that: “Public interest before Private interest.” Man is first and foremost the property of the State. You have no private interest. Your only interest is your specific responsibility to the collective. These are the founding ideas that brought forth Adolf Hitler. He is not the cause. He is merely the extension of a logical body of ideas. And at the root, what causes good men to do nothing? Change the definition of good.

I just produced for you from start to finish how they defined good.   At the root, they said man is not entitled to his own life. He is not entitled to his work product. He must sacrifice his life on behalf of the collective. They changed the definition of good.

“You didn’t build that.”

That is not your property. The government has to give you permission. You want to understand what actually happened in the rise of National Socialism? You want to understand why the Church was so specifically involved in the rise of socialism? Because the Church fundamentally believed the exact same things. They ultimately believed that man had no business with himself.

The reality is that socialism is not a kinder, gentler economic organization, and I frankly don’t care how you parse it up. I don’t care whether you say it is communism, socialism, or fascism. Ultimately, the end result is about who owns man? As long as the state owns man, there is no liberty. And if there is no liberty, there is no production, and if there is no production, there is no prosperity.

To be continued…