"An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation." ~ John Marshall
Column by Alex R. Knight III.
Exclusive to STR
In 1966, the paleoanthropological writer Robert Ardrey published a book titled The Territorial Imperative, the predominant thesis of which is that the principal needs of any higher animal – such as man – are identity, stimulation, and security. The anathema of which are, of course, anonymity, boredom, and anxiety.
If there were one condition I could point to in order to provide a general remedy for all three of these, it would be wealth. Prosperity. Even relative material affluence can be said to affect, either directly or otherwise, the acquisition of such requirements under the vast majority of conceivable or manageable circumstances. Yes, the old adage that money isn’t everything holds true in some circumstances. Even billionaires often are or can be ultimately subject to the natural laws the flesh is heir to: Addiction. Depression. Sexual dysfunction. Terminal illness. And of course, the final unavoidable purchase of that big farm in the sky. However, on mean average, I would stand by my original premise. Wealth generally makes for a happier, more secure life than poverty. Or at least creates the conditions for such. Much of the rest, of course – as Ludwig von Mises would have no doubt agreed -- relies on human choices.
All of that said, what then produces wealth? Just as Ardrey proposed that there are three basic human needs, there are a like number of essential wealth-producing activities: Manufacturing, mining, and farming. True enough, it is possible to become wealthy by opening a successful chain of ice cream parlors, playing professional sports, or starring in a major Hollywood motion picture. But all of those possibilities stem from the existence of leisure capital – what is often referred to as “disposable income.” And that capital can only be brought into being along the economic chain once a certain number of people have either grown something, pulled something out of the ground, or built something tangible (true, ice cream requires perhaps at least two of these prerequisites to have been performed at some point, but the vending of it can be reduced to a mere service, for the most part).
What may at first glance to the uninitiated seem paradoxical, of course, is that such enterprises as factories, mines, and farms require an initial outlay of capital – at least until, if successfully managed, they begin to produce a profit margin wide enough to allow them to become self-sustaining and, ideally, expand in size and scope. Of course, a conscious decision to not expand at any point may be either a judicious assessment of market forces, or a matter of personal preference: A business proprietor or group of them may decide they’ve “found their niche” and are comfortable continuing to do business on a certain scale, and no more. They may desire more leisure time themselves rather than more custom, and this too may be rightly categorized as Human Action. To each his own is the rule in any true marketplace.
We come now to the issue of supply and demand – one of the cardinal principles in free-market activity. It goes without saying that where and when demand is low, supply must be decreased accordingly. But what about when demand is high? What is the best way to ensure abundance?
Again we may repair to von Mises in his renowned treatise: “The question is whether there is any means of achieving a greater supply other than by increasing the productivity of human effort by the investment of additional capital.”
Karl Marx, in his blind and bitter insistence that class struggle was expressed through a constant animus between workers and owners, bred a culture whose adherents even today, in the face of all historical evidence to the contrary, insist that “oversaving” and “overinvestment” are at the root of all economic woes. That heavier taxes, more and greater regulations – and even military warfare – are the solutions to rising fiat-currency inflation, rampant unemployment, exploding energy and other cost-of-living increases, and general societal malaise. Under no circumstances do these worshippers at the altar of the Cult of the State entertain the notion that the true class struggle exists – as Murray Rothbard was largely responsible for reasserting post-Marx – between the sovereign individual, and the collectivist parasite known as the State: A kleptocratic institution incapable of producing anything in its own right, and entirely reliant upon the violent confiscation of wealth for its very existence.
I was reminded recently that the entire reason American government was able to grow into such a bloated obscenity as it is today is because of the bounty that was made possible by an earlier lack of constraint on enterprise, entrepreneurship, commerce, and individual personal and economic activity. There was much for the redistributionists, social engineers, and Marxist fanatics to plunder at the barrel of a gun. What prosperity there is remaining is now but an illusion. The recipients of handouts now far outnumber the population of producers. Soon, it will no longer be profitable for them to continue to produce anything. The more well-monied among them are at present leaving for greener pastures, as Uncle Sam tightens the tax screws and closes the loopholes in a final wave of frenzified cash-grabbing and resource dragooning before the inevitable fall.
Indeed, the hands of fate are now shaking the dice again hard. They will soon enough be tumbling across the proverbial craps table, whether to evolution or doom, none among us can say for sure, but I’m willing to bet the next decade or so will be, at the very least, a most interesting blend of both.
Principal human needs will then, once again, need to be met. And whether the correct path to that end will be chosen, will rest with human choice.