There are two ways to acquire wealth, and only two – production, or plunder.
You can either create something of value for others, or you can take something of value away.
Franz Oppenheimer called these the economic and the political means.
A distinction can be made between useful and useless production. Understand that the end-purpose of production is always consumption.
Therefore, any good that does not satisfy a given desire for a price that sufficient people are willing to pay, should not be produced. Such production serves only to waste precious resources.
Of course, people make mistakes all the time. An entrepreneur might over-estimate the value of his production, and have to change his business. This is a normal market process of discovery.
But making something that is unwanted by others can only be sustained for significant periods by an entity that plunders the people. It must, since it cannot justify its production from sales.
THE ALTRUISM OF PRODUCTION
Useful production doesn’t just create value, it gives it to others. For money, of course, but by the Austrian double inequality of exchange, a person buys something only if he values it more than the money he must exchange for it. That is why all parties to a voluntary exchange always benefit from it.
Plunder on the other hand takes from people. If production advances society and raises living standards, plunder serves to diminish them. Both because the plunderer didn’t have to create value to eat, and because the victim of the plunder, a producer, is now less motivated to produce when a part of his work (and so his time) is stolen from him.
The worst of plunder has always been legal plunder. It is the institutionalization and systematic use of violence by the government, to repeatedly steal from the people.
Frédéric Bastiat, an early French economist and proto-Austrian, put it this way:
“Legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole—with their common aim of legal plunder—constitute socialism.
But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
Then abolish this law without delay, for it is not only an evil in itself, but also a fertile source for further evils, for it invites reprisals. If such a law is not abolished immediately, it will spread, multiply, and develop into a system.”
If the idea of plunder, theft, or the forcible expropriation of others does not induce in you feelings of injustice (and turn-outs at elections show that a whole lot of people have no problem with plunder), then perhaps a morality based on the survival or the progress of the species will jolt you a little more.
TWO POSSIBLE SOCIETIES
I suppose there are actually three, but one of them is impossible to sustain for even a very short period of time.
THE PRODUCTION SOCIETY
In this society, everyone is a producer, and nobody plunders anyone else using the legal system. No society can fully eliminate predation by criminals, but as long as those criminals are not elevated to positions of government power and given an entire apparatus of coercion, such predation should be fairly limited.
Useful production does not merely benefit the producer and consumer of said production. It benefits everybody.
Production benefits the producer by affording him the ability to then consume of the production of others. In a monetary system, useful production gives the producer “tokens”, or proof that he has produced something of value to another.
Consumers benefit from the production of others because it allows them to specialize and become more efficient in what they themselves produce, and provides them with a cornucopia of other goods and services to purchase.
The greater the production in society, the lower the prices of produced goods, and the wealthier everyone becomes; for a fall in the price of a good is no different than a rise in one’s wage. This is most readily apparent in the simple observation that a static money supply combined with a growing value of goods produced, lead to an appreciation of everyone’s currency. When the price of computers and electronics falls with every month, all consumers benefit.
Finally, even people unrelated to the transaction of any particular producer benefit, insofar as those producers have elected the way of peacefully improving their lot in life, rather than taking from others with force and violence.
THE PARASITIC SOCIETY
This is the society we have today. The parasitic society is everywhere. I cannot think of a single country whose government has not institutionalized the systematic legal plunder of its subjects.
Such a society may exist, but only temporarily, for it is always the will of the plunderer to expand his loot, and plunder will always remove incentives from production in the amount of the plunder. What sense is there to work so hard and produce so much, when more than half is taken away from you?
As a parasitic society falls from the festering corruption of systematic legal plunder, the number of parasites grows while the number of producers falls, until the producers can no longer sustain the parasites – and then society falls apart.
The government disintegrates due to its vulnerability, usually falling prey to some external threat.
THE TOTAL PLUNDER SOCIETY
This is a purely theoretical construct. Since at least someone must produce something, a society where everyone plunders everyone else and nobody produces anything is an impossibility. Perhaps it could be sustained while plunderers deplete the existing stock of goods – but not more than for a few days.
If everyone plundered, there would be nothing worth plundering.
Notice that producers and consumers are the same people. The distinction is only there to identify the mode of activity they are currently engaged in. It is purely academic. Everyone in life is both a producer and a consumer. Well, not everyone. There are also plunderers and parasites.
And those are the only two classes that matter.
It’s not about capitalists, workers, entrepreneurs, bureaucrats, young people, old people, ethnic groups, genders, or any other distinction sociology majors may fancy.
In the real world, there are only two classes truly worth distinguishing between: the producer and the plunderer.
A brief overview of history will confirm this. Whatever proximate cause (such as a war), the ultimate cause of the decline and fall of a civilization is always the expansion of the plundering class, and the reduction of the producing class, until so little is produced that the government and the plundering class can no longer parasite off of the surplus created by producers.
You thus have two options going forward.
You can choose to fight for a society of production, of plenty, of technological progress, and of freedom. A resilient social system that will progress at a rate never before seen in human history – more so even than the United States did in the 1890’s.
Or you can choose the same short-sighted and destructive cycle of ups and downs – rises and falls.
The cycle of civilizations, with its concomitant dark ages, is not a requirement. It is not a natural law. It is merely the product of a system of legal plunder.
Renounce such a system, and start fighting against it before the plundering class again overwhelms your society, or find yourself in a new dark age.