In fixing a quote incorrectly credited to Locke, I took the time to read Locke’s chapter on property rights in the fifth chapter of his book, The Second Treatise of Government. In researching views on money, I took the time to read often quoted paragraphs from Albert Jay Nock’s book, Memoirs of a Superfluous Man. I wanted to go over my critique of John Locke’s and Albert Jay Nock’s view of land and money.
My first impression was that John Locke seemed to be more of a preacher than an economist. John Locke speaks plainly and with the artistic flair of a preacher, providing definition of his words and reiterating his points in plain language in mid sentence.
His time spent on property was little in the book so it was a quick and easy reading. His time spent on discussing modern economy of his time was even less, relative to his time spent on primitive economy. Most of his time was spent on laying out the foundation with a biblical basis for property rights and forming that basis on primitive society. His work in this regards was impressive.
However, I got the impression that the foundation did not transition very well to the modern economy and ended rather abruptly for the increase in complexity of a modern economy. This leads me to believe that John Locke was trying to address the sensibilities of Christian populations and to twist the Bible into comforting such populations that their use of gold and silver as money, the fencing of the commons, the privatization of economic rent on land, and the eviction of poor Europeans and American Indians from the land was approved by the Bible.
While John Locke tried to reiterate an earlier point that one should not try to take more land than what others need, he changes the point in a modern society that one should not let the fruits of the earth spoil. It is a rather pointless point since the only person who cares if the fruits of their labor mixed with the fruits of the earth spoils is the person who let them spoil.
John Locke also makes the statement that gold and silver injures no one when used as a money. When gold and silver are relatively useless and when gold and silver are readily available, this might be true. However, he completely ignores the history that gold tends to increase in value when used as money and causes much injury.
John Locke did make a good point that gold and silver are useful to represent wealth for their rarity since otherwise gold and silver has relative useless value compared to other things needed to live. While this point is lesser today since gold and silver are useful for a wide range of technological applications, including cellphones, it was still nonetheless a very solid point in that gold and silver is relatively useless. The point diminishes the myth that gold should be money because it is worth more, when in reality, it is relatively useless when it comes to things needed to survive.
I am not going to bore you with scholarly discussion of Lockean provisio, though you should become familiar with the scholarly phrase if you are not already acquainted with it, since it describes a Lockean foundation for Ricardo’s Law of Rent and Georgist theory, accounting for Locke’s correct reasoning and his error. I will also suggest to read Locke’s chapter on property yourself since it is an easy and brief read in hopes that you will see his excellent basis of a primitive economy and his rather poor traceability from his basis to a modern economy.
I do not mean to knock Locke over his shortcomings in this one chapter since Locke did make significant contribution in laying the groundwork for classical liberalism. I also do not mean to accuse John Locke of doing in opposition of what he was trying to accomplish. He was right in so many areas, and a man ahead of his time. John Locke took on so much, even acquiring a medical degree, that it is reasonable to assume he might have fell short in areas.
However, it did make me realize how powerful a status quo bias can limit the ability of one to fully examine ideas, which is probably the main reason why economists and philosophers fall short when it comes to land and money, even when intuition and history indicates problems of the status quo. I personally did not examine my own intuitive disagreements with the Austrian School of Economics because others spent so much time in opposition of my own intuitive disagreements and who I also largely agreed with their points in other areas. I felt I was wrong, rather than the funded economists who were usually right. I would also have to spend the time to make sure I’m fully developing my own understand or find the economists and minds who touched on those same intuitive disagreements or developed those disagreements into a greater understanding.
Albert Jay Nock made an impressive observation that the poverty among supposedly free markets was not caused by free markets but the intervention of government in free markets.
“This imperfect policy of non-intervention, or laissez-faire, led straight to a most hideous and dreadful economic exploitation; starvation wages, slum dwelling, killing hours, pauperism, coffin-ships, child-labour — nothing like it had ever been seen in modern times…People began to say, if this is what State abstention comes to, let us have some State intervention.
“But the state had intervened; that was the whole trouble. The State had established one monopoly — the landlord’s monopoly of economic rent — thereby shutting off great hordes of people from free access to the only source of human subsistence, and driving them into factories to work for whatever Mr. Gradgrind and Mr. Bottles chose to give them. The land of England, while by no means nearly all actually occupied, was all legally occupied; and this State-created monopoly enabled landlords to satisfy their needs and desires with little exertion or none, but it also removed the land from competition with industry in the labor market, thus creating a huge, constant and exigent labour-surplus.” — Albert J. Nock
Albert Nock could have easily expressed that the problem with money is that the government had intervened in the free market when it selected commodities and free market currency for legal tender rather than provide it’s own legal tender without intervening in free markets. However, Albert Nock seemed perplexed, making that erroneous leap from the correct statements, that money is merely a means of exchange and that labor and the fruits of the earth give money value, to a rather embarrassing rejection of reality, that government cannot provide a legal tender.
“Another strange notion pervading whole peoples is that the State has money of its own; and nowhere is this absurdity more firmly fixed than in America. The State has no money. It produces nothing. It existence is purely parasitic, maintained by taxation; that is to say, by forced levies on the production of others. ‘Government money,’ of which one hears so much nowadays, does not exist; there is no such thing. One is especially amused at seeing how largely a naïve ignorance of this fact underlies the pernicious measures of ‘social security’ which have been foisted on the American people. In various schemes of pensioning, of insurance against sickness, accident, unemployment and what-not, one notices that the government is supposed to pay so-much into the fund, the employer so-much, and the workman so-much…. But the government pays nothing, for it has nothing to pay with. What such schemes actually come to is that the workman pays his own share outright; he pays the employer’s share in the enhanced price of commodities; and he pays the government’s share in taxation. He pays the whole bill; and when one counts in the unconscionably swollen costs of bureaucratic brokerage and paperasserie, one sees that what the workman-beneficiary gets out the arrangement is about the most expensive form of insurance that could be devised consistently with keeping its promoters out of gaol.” — Albert J. Nock
Albert Jay Nock seemed grounded in reality with his statement in regards to land. However, he makes a flimsy statement in regards to money. It perplexes me how a man of such insight can be so right in regards to one issue. From what I can tell, Albert Jay Nock spent much more time on developing his ideas in regards to land, while he spent little time developing his ideas on money. It is as if he just quickly and carelessly put something together, defending the status quo because it was easier to defend the status quo.
Of course, I’m not defending the status quo of debt as money. I am defending the idea of a public debt-free legal tender. For government to base legal tender on debt is an intervention in free markets, like it is when government declares any commodity or free market currency to be legal tender. The only way for government to not intervene in free markets is to provide it’s own legal tender for payment of taxes, public debts, public expenditure, and private debts previously chartered by government, so that the legal tender can represent the value of labor which uses the legal tender without distortion from government intervention in commodity markets or free market currencies.
When government intervenes in commodity markets or free market currencies in selecting a legal tender, it artificially reduces the value of labor and all other commodities, assets, and free market currencies, while the chosen commodities or free market currencies are artificially increased in value. While the devaluation of labor and all other commodities, assets, and free markets directly destroys the value in those things, the chosen commodities also becomes more expensive for use in the free market, which is a double-edged sword plunged into the heart of free markets.
