Rothbard, America's Great Depression

Business Cycle Theory

The Positive Theory of the Cycle

Study of business cycles must be based upon a satisfactory cycle theory. Gazing at sheaves of statistics without "pre-judgment" is futile. A cycle takes place in the economic world, and therefore a usable cycle theory must be integrated with general economic theory. And yet, remarkably, such integration, even attempted integration, is the exception, not the rule. Economics, in the last two decades, has fissured badly into a host of airtight compartments—each sphere hardly related to the others. Only in the theories of Schumpeter and Mises has cycle theory been integrated into general economics.[1]

The bulk of cycle specialists, who spurn any systematic integration as impossibly deductive and overly simplified, are thereby (wittingly or unwittingly) rejecting economics itself. For if one may forge a theory of the cycle with little or no relation to general economics, then general economics must be incorrect, failing as it does to account for such a vital economic phenomenon. For institutionalists—the pure data collectors—if not for others, this is a welcome conclusion. Even institutionalists, however, must use theory sometimes, in analysis and recommendation; in fact, they end by using a concoction of ad hoc hunches, insights, etc., plucked unsystematically from various theoretical gardens. Few, if any, economists have realized that the Mises theory of the trade cycle is not just another theory: that, in fact, it meshes closely with a general theory of the economic system.[2] The Mises theory is, in fact, the economic analysis of the necessary consequences of intervention in the free market by bank credit expansion. Followers of the Misesian theory have often displayed excessive modesty in pressing its claims; they have widely protested that the theory is "only one of many possible explanations of business cycles," and that each cycle may fit a different causal theory. In this, as in so many other realms, eclecticism is misplaced. Since the Mises theory is the only one that stems from a general economic theory, it is the only one that can provide a correct explanation. Unless we are prepared to abandon general theory, we must reject all proposed explanations that do not mesh with general economics.

Business Cycles and Business Fluctuations

It is important, first, to distinguish between business cyclesand ordinary business fluctuations. We live necessarily in a society of continual and unending change, change that can never be precisely charted in advance. People try to forecast and anticipate changes as best they can, but such forecasting can never be reduced to an exact science. Entrepreneurs are in the business of forecasting changes on the market, both for conditions of demand and of supply. The more successful ones make profits pari passus with their accuracy of judgment, while the unsuccessful forecasters fall by the wayside. As a result, the successful entrepreneurs on the free market will be the ones most adept at anticipating future business conditions. Yet, the forecasting can never be perfect, and entrepreneurs will continue to differ in the success of their judgments. If this were not so, no profits or losses would ever be made in business.

Changes, then, take place continually in all spheres of the economy. Consumer tastes shift; time preferences and consequent proportions of investment and consumption change; the labor force changes in quantity, quality, and location; natural resources are discovered and others are used up; technological changes alter production possibilities; vagaries of climate alter crops, etc. All these changes are typical features of any economic system. In fact, we could not truly conceive of a changeless society, in which everyone did exactly the same things day after day, and no economic data ever changed. And even if we could conceive of such a society, it is doubtful whether many people would wish to bring it about.
It is, therefore, absurd to expect every business activity to be "stabilized" as if these changes were not taking place. To stabilize and "iron out" these fluctuations would, in effect, eradicate any rational productive activity. To take a simple, hypothetical case, suppose that a community is visited every seven years by the seven-year locust. Every seven years, therefore, many people launch preparations to deal with the locusts: produce anti-locust equipment, hire trained locust specialists, etc. Obviously, every seven years there is a "boom" in the locust-fighting industry, which, happily, is "depressed" the other six years. Would it help or harm matters if everyone decided to "stabilize" the locust-fighting industry by insisting on producing the machinery evenly every year, only to have it rust and become obsolete? Must people be forced to build machines before they want them; or to hire people before they are needed; or, conversely, to delay building machines they want—all in the name of "stabilization"? If people desire more autos and fewer houses than formerly, should they be forced to keep buying houses and be prevented from buying the autos, all for the sake of stabilization? As Dr. F.A. Harper has stated:

This sort of business fluctuation runs all through our daily lives. There is a violent fluctuation, for instance, in the harvest of strawberries at different times during the year. Should we grow enough strawberries in greenhouses so as to stabilize that part of our economy throughout the year.[3]

We may, therefore, expect specific business fluctuations all the time. There is no need for any special "cycle theory" to account for them. They are simply the results of changes in economic data and are fully explained by economic theory. Many economists, however, attribute general business depression to "weaknesses" caused by a "depression in building" or a "farm depression." But declines in specific industries can never ignite a general depression. Shifts in data will cause increases in activity in one field, declines in another. There is nothing here to account for a general business depression—a phenomenon of the true "business cycle." Suppose, for example, that a shift in consumer tastes, and technologies, causes a shift in demand from farm products toother goods. It is pointless to say, as many people do, that a farm depression will ignite a general depression, because farmers will buy less goods, the people in industries selling to farmers will buy less, etc. This ignores the fact that people producing the othergoods now favored by consumers will prosper; their demands will increase.
The problem of the business cycle is one of general boom and depression; it is not a problem of exploring specific industries and wondering what factors make each one of them relatively prosperous or depressed. Some economists—such as Warren and Pearson or Dewey and Dakin—have believed that there are no such things as general business fluctuations—that general movements are but the results of different cycles that take place, at different specific time-lengths, in the various economic activities. To the extent that such varying cycles (such as the 20-year "building cycle" or the seven-year locust cycle) may exist, however, they are irrelevant to a study of business cycles ingeneral or to business depressions in particular. What we are trying to explain are general booms and busts in business.

In considering general movements in business, then, it is immediately evident that such movements must be transmitted through the general medium of exchange—money. Money forges the connecting link between all economic activities. If one price goes up and another down, we may conclude that demand has shifted from one industry to another; but ifall prices move up or down together, some change must have occurred in the monetary sphere. Only changes in the demand for, and/or the supply of, money will cause general price changes. An increase in the supply of money, the demand for money remaining the same, will cause a fall in the purchasing power of each dollar, i.e., a general rise in prices; conversely, a drop in the money supply will cause a general decline in prices. On the other hand, an increase in the general demand for money, the supply remaining given, will bring about a rise in the purchasing power of the dollar (a general fall in prices); while a fall in demand will lead to a general rise in prices. Changes in prices in general, then, are determined by changes in the supply of and demand for money. The supply of money consists of the stock of money existing in the society. The demand for money is, in the final analysis, the willingness of people to hold cash balances, and this can be expressed as eagerness to acquire money in exchange, and as eagerness to retain money in cash balance. The supply of goods in the economy is one component in the social demand for money; an increased supply of goods will, other things being equal, increase the demand for money and therefore tend to lower prices. Demand for money will tend to be lower when the purchasing power of the money-unit is higher, for then each dollar is more effective in cash balance. Conversely, a lower purchasing power (higher prices) means that each dollar is less effective, and more dollars will be needed to carry on the same work.

The purchasing power of the dollar, then, will remain constant when the stock of, and demand for, money are in equilibrium with each other: i.e., when people are willing to hold in their cash balances the exact amount of money in existence. If the demand for money exceeds the stock, the purchasing power of money will rise until the demand is no longer excessive and the market is cleared; conversely, a demand lower than supply will lower the purchasing power of the dollar, i.e., raise prices.

Yet, fluctuations in general business, in the "money relation," do not by themselves provide the clue to the mysterious business cycle. It is true that any cycle in general business must be transmitted through this money relation: the relation between the stock of, and the demand for, money. But these changes in themselves explain little. If the money supply increases or demand falls, for example, prices will rise; but why should this generate a "business cycle"? Specifically, why should it bring about a depression? The early business cycle theorists were correct in focusing their attention on the crisis and depression: for these are the phases that puzzle and shock economists and laymen alike, and these are the phases that most need to be explained.

The Problem: The Cluster of Error

The explanation of depressions, then, will not be found by referring to specific or even general business fluctuations per se. The main problem that a theory of depression must explain is: why is there a sudden general cluster of business errors? This is the first question for any cycle theory. Business activity moves along nicely with most business firms making handsome profits. Suddenly, without warning, conditions change and the bulk of business firms are experiencing losses; they are suddenly revealed to have made grievous errors in forecasting.

A general review of entrepreneurship is now in order. Entrepreneurs are largely in the business of forecasting. They must invest and pay costs in the present, in the expectation of recouping a profit by sale either to consumers or to other entrepreneurs further down in the economy's structure of production. The better entrepreneurs, with better judgment in forecasting consumer or other producer demands, make profits; the inefficient entrepreneurs suffer losses. The market, therefore, provides a training ground for the reward and expansion of successful, far-sighted entrepreneurs and the weeding out of inefficient businessmen. As a rule only some businessmen suffer losses at any one time; the bulk either break even or earn profits. How, then, do we explain the curious phenomenon of the crisis when almost all entrepreneurs suffer sudden losses? In short, how did all the country's astute businessmen come to make such errors together, and why were they all suddenly revealed at this particular time? This is the great problem of cycle theory.

It is not legitimate to reply that sudden changes in the data are responsible. It is, after all, the business of entrepreneurs to forecast future changes, some of which are sudden. Why did their forecasts fail so abysmally?

Another common feature of the business cycle also calls for an explanation. It is the well-known fact that capital-goods industries fluctuate more widely than do the consumer-goods industries. The capital-goods industries—especially the industries supplying raw materials, construction, and equipment to other industries—expand much further in the boom, and are hit far more severely in the depression.

A third feature of every boom that needs explaining is the increase in the quantity of money in the economy. Conversely, there is generally, though not universally, a fall in the money supply during the depression.

The Explanation: Boom and Depression

In the purely free and unhampered market, there will be no cluster of errors, since trained entrepreneurs will not all make errors at the same time.[4] The "boom-bust" cycle is generated by monetary intervention in the market, specifically bank credit expansion to business. Let us suppose an economy with a given supply of money. Some of the money is spent in consumption; the rest is saved and invested in a mighty structure of capital, in various orders of production. The proportion of consumption to saving or investment is determined by people's time preferences—the degree to which they prefer present to future satisfactions. The less they prefer them in the present, the lower will their time preference rate be, and the lower therefore will be the pure interest rate, which is determined by the time preferences of the individuals in society. A lower time-preference rate will be reflected in greater proportions of investment to consumption, a lengthening of the structure of production, and a building-up of capital. Higher time preferences, on the other hand, will be reflected in higher pure interest rates and a lower proportion of investment to consumption. The final market rates of interest reflect the pure interest rate plus or minus entrepreneurial risk and purchasing power components. Varying degrees of entrepreneurial risk bring about astructure of interest rates instead of a single uniform one, and purchasing-power components reflect changes in the purchasing power of the dollar, as well as in the specific position of an entrepreneur in relation to price changes. The crucial factor, however, is the pure interest rate. This interest rate first manifests itself in the "natural rate" or what is generally called the going "rate of profit." This going rate is reflected in the interest rate on the loan market, a rate which is determined by the going profit rate.[5]

Now what happens when banks print new money (whether as bank notes or bank deposits) and lend it to business?[6] The new money pours forth on the loan market and lowers the loan rate of interest. Itlooks as if the supply of saved funds for investment has increased, for the effect is the same: the supply of funds for investment apparently increases, and the interest rate is lowered. Businessmen, in short, are misled by the bank inflation into believing that the supply of saved funds is greater than it really is. Now, when saved funds increase, businessmen invest in "longer processes of production," i.e., the capital structure is lengthened, especially in the "higher orders" most remote from the consumer. Businessmen take their newly acquired funds and bid up the prices of capital and other producers' goods, and this stimulates a shift of investment from the "lower" (near the consumer) to the "higher" orders of production (furthest from the consumer)—from consumer goods to capital goods industries.[7]

If this were the effect of a genuine fall in time preferences and an increase in saving, all would be well and good, and the new lengthened structure of production could be indefinitely sustained. But this shift is the product of bank credit expansion. Soon the new money percolates downward from the business borrowers to the factors of production: in wages, rents, interest. Now, unless time preferences have changed, and there is no reason to think that they have, people will rush to spend the higher incomes in the old consumption-investment proportions. In short, people will rush to reestablish the old proportions, and demand will shift back from the higher to the lower orders. Capital goods industries will find that their investments have been in error: that what they thought profitable really fails for lack of demand by their entrepreneurial customers. Higher orders of production have turned out to be wasteful, and the malinvestment must be liquidated.

A favorite explanation of the crisis is that it stems from "underconsumption"—from a failure of consumer demand for goods at prices that could be profitable. But this runs contrary to the commonly known fact that it is capital goods, and not consumer goods, industries that really suffer in a depression. The failure is one of entrepreneurial demand for the higher order goods, and this in turn is caused by the shift of demand back to the old proportions.

In sum, businessmen were misled by bank credit inflation to invest too much in higher-order capital goods, which could only be prosperously sustained through lower time preferences and greater savings and investment; as soon as the inflation permeates to the mass of the people, the old consumption-investment proportion is reestablished, and business investments in the higher orders are seen to have been wasteful.[8] Businessmen were led to this error by the credit expansion and its tampering with the free-market rate of interest.

The "boom," then, is actually a period of wasteful misinvestment. It is the time when errors are made, due to bank credit's tampering with the free market. The "crisis" arrives when the consumers come to reestablish their desired proportions. The "depression" is actually the process by which the economy adjusts to the wastes and errors of the boom, and reestablishes efficient service of consumer desires. The adjustment process consists in rapidliquidation of the wasteful investments. Some of these will be abandoned altogether (like the Western ghost towns constructed in the boom of 1816–1818 and deserted during the Panic of 1819); others will be shifted to other uses. Always the principle will be not to mourn past errors, but to make most efficient use of the existing stock of capital. In sum, the free market tends to satisfy voluntarily-expressed consumer desires with maximum efficiency, and this includes the public's relative desires for present and future consumption. The inflationary boom hobbles this efficiency, and distorts the structure of production, which no longer serves consumers properly. The crisis signals the end of this inflationary distortion, and the depression is the process by which the economy returns to the efficient service of consumers. In short, and this is a highly important point to grasp, the depression is the "recovery" process, and the end of the depression heralds the return to normal, and to optimum efficiency. The depression, then, far from being an evil scourge, is the necessary and beneficial return of the economy to normal after the distortions imposed by the boom. The boom, then,requires a "bust."

Since it clearly takes very little time for the new money to filter down from business to factors of production, why don't all booms come quickly to an end? The reason is that the banks come to the rescue. Seeing factors bid away from them by consumer goods industries, finding their costs rising and themselves short of funds, the borrowing firms turn once again to the banks. If the banks expand credit further, they can again keep the borrowers afloat. The new money again pours into business, and they can again bid factors away from the consumer goods industries. In short, continually expanded bank credit can keep the borrowers one step ahead of consumer retribution. For this, we have seen, is what the crisis and depression are: the restoration by consumers of an efficient economy, and the ending of the distortions of the boom. Clearly, the greater the credit expansion and the longer it lasts, the longer will the boom last. The boom will end when bank credit expansion finally stops. Evidently, the longer the boom goes on the more wasteful the errors committed, and the longer and more severe will be the necessary depression readjustment.

Thus, bank credit expansion sets into motion the business cycle in all its phases: the inflationary boom, marked by expansion of the money supply and by malinvestment; the crisis, which arrives when credit expansion ceases and malinvestments become evident; and the depression recovery, the necessary adjustment process by which the economy returns to the most efficient ways of satisfying consumer desires.[9]

What, specifically, are the essential features of the depression-recovery phase? Wasteful projects, as we have said, must either be abandoned or used as best they can be. Inefficient firms, buoyed up by the artificial boom, must be liquidated or have their debts scaled down or be turned over to their creditors. Prices of producers' goods must fall, particularly in the higher orders of production—this includes capital goods, lands, and wage rates. Just as the boom was marked by a fall in the rate of interest, i.e., of price differentials between stages of production (the "natural rate" or going rate of profit) as well as the loan rate, so the depression-recovery consists of a rise in this interest differential. In practice, this means a fall in the prices of the higher-order goods relative to prices in the consumer goods industries. Not only prices of particular machines must fall, but also the prices of whole aggregates of capital, e.g., stock market and real estate values. In fact, these values must fall more than the earnings from the assets, through reflecting the general rise in the rate of interest return.

Since factors must shift from the higher to the lower orders of production, there is inevitable "frictional" unemployment in a depression, but it need not be greater than unemployment attending any other large shift in production. In practice, unemployment will be aggravated by the numerous bankruptcies, and the large errors revealed, but it still need only be temporary. The speedier the adjustment, the more fleeting will the unemployment be. Unemployment will progress beyond the "frictional" stage and become really severe and lasting only if wage rates are kept artificially high and are prevented from falling. If wage rates are kept above the free-market level that clears the demand for and supply of labor, laborers will remain permanently unemployed. The greater the degree of discrepancy, the more severe will the unemployment be.

Secondary Features of Depression: Deflationary Credit Contraction

The above are the essential features of a depression. Other secondary features may also develop. There is no need, for example, fordeflation (lowering of the money supply) during a depression. The depression phase begins with the end of inflation, and can proceed without any further changes from the side of money. Deflation has almost always set in, however. In the first place, the inflation took place as an expansion of bank credit; now, the financial difficulties and bankruptcies among borrowers cause banks to pull in their horns and contract credit.[10] Under the gold standard, banks have another reason for contracting credit—if they had ended inflation because of a gold drain to foreign countries. The threat of this drain forces them to contract their outstanding loans. Furthermore the rash of business failures may cause questions to be raised about the banks; and banks, being inherently bankrupt anyway, can ill afford such questions.[11] Hence, the money supply will contract because of actual bank runs, and because banks will tighten their position in fear of such runs.

Another common secondary feature of depressions is an increase in the demand for money. This "scramble for liquidity" is the result of several factors: (1) people expect falling prices, due to the depression and deflation, and will therefore hold more money and spend less on goods, awaiting the price fall; (2) borrowers will try to pay off their debts, now being called by banks and by business creditors, by liquidating other assets in exchange for money; (3) the rash of business losses and bankruptcies makes businessmen cautious about investing until the liquidation process is over.

With the supply of money falling, and the demand for money increasing, generally falling prices are a consequent feature of most depressions. A general price fall, however, is caused by the secondary, rather than by the inherent, features of depressions. Almost all economists, even those who see that the depression adjustment process should be permitted to function unhampered, take a very gloomy view of the secondary deflation and price fall, and assert that they unnecessarily aggravate the severity of depressions. This view, however, is incorrect. These processes not only do not aggravate the depression, they have positively beneficial effects.

There is, for example, no warrant whatever for the common hostility toward "hoarding." There is no criterion, first of all, to define "hoarding"; the charge inevitably boils down to mean that A thinks that B is keeping more cash balances than A deems appropriate for B. Certainly there is no objective criterion to decide when an increase in cash balance becomes a "hoard." Second, we have seen that the demand for money increases as a result of certain needs and values of the people; in a depression, fears of business liquidation and expectations of price declines particularly spur this rise. By what standards can these valuations be called "illegitimate"? A general price fall is the way that an increase in the demand for money can be satisfied; for lower prices mean that the same total cash balances have greater effectiveness, greater "real" command over goods and services. In short, the desire for increased real cash balances has now been satisfied.

Furthermore, the demand for money will decline again as soon as the liquidation and adjustment processes are finished. For the completion of liquidation removes the uncertainties of impending bankruptcy and ends the borrowers' scramble for cash. A rapid unhampered fall in prices, both in general (adjusting to the changed money-relation), and particularly in goods of higher orders (adjusting to the malinvestments of the boom) will speedily end the realignment processes and remove expectations of further declines. Thus, the sooner the various adjustments, primary and secondary, are carried out, the sooner will the demand for money fall once again. This, of course, is just one part of the general economic "return to normal."

Neither does the increased "hoarding" nor the fall of prices at all interfere with the primary depression-adjustment. The important feature of the primary adjustment is that the prices of producers' goods fall more rapidly than do consumer good prices (or, more accurately, that higher order prices fall more rapidly than do those of lower order goods); it does not interfere with the primary adjustment if all prices are falling to some degree. It is, moreover, a common myth among laymen and economists alike, that falling prices have a depressing effect on business. This is not necessarily true. What matters for business is not the general behavior of prices, but the price differentials between selling prices and costs (the "natural rate of interest"). If wage rates, for example, fall more rapidly than product prices, this stimulates business activity and employment.

Deflation of the money supply (via credit contraction) has fared as badly as hoarding in the eyes of economists. Even the Misesian theorists deplore deflation and have seen no benefits accruing from it.[12] Yet, deflationary credit contraction greatly helps to speed up the adjustment process, and hence the completion of business recovery, in ways as yet unrecognized. The adjustment consists, as we know, of a return to the desired consumption-saving pattern. Less adjustment is needed, however, if time preferences themselves change: i.e., ifsavings increase and consumption relatively declines. In short, what can help a depression is not more consumption, but, on the contrary, less consumption and more savings (and, concomitantly, more investment). Falling prices encourage greater savings and decreased consumption by fostering an accounting illusion. Business accounting records the value of assets at their original cost. It is well known that general price increases distort the accounting-record: what seems to be a large "profit" may only be just sufficient to replace the now higher-priced assets. During an inflation, therefore, business "profits" are greatly overstated, and consumption is greater than it would be if the accounting illusion were not operating—perhaps capital is even consumed without the individual's knowledge. In a time of deflation, the accounting illusion is reversed: what seem like losses and capital consumption, may actually mean profits for the firm, since assets now cost much less to be replaced. This overstatement of losses, however, restricts consumption and encourages saving; a man may merely think he is replacing capital, when he is actually making an added investment in the business.

Credit contraction will have another beneficial effect in promoting recovery. For bank credit expansion, we have seen, distorts the free market by lowering price differentials (the "natural rate of interest" or going rate of profit) on the market. Credit contraction, on the other hand, distorts the free market in the reverse direction. Deflationary credit contraction's first effect is to lower the money supply in the hands of business, particularly in the higher stages of production. This reduces the demand for factors in the higher stages, lowers factor prices and incomes, and increases price differentials and the interest rate. Itspurs the shift of factors, in short, from the higher to the lower stages. But this means that credit contraction, when it follows upon credit expansion, speeds the market's adjustment process. Credit contraction returns the economy to free-market proportions much sooner than otherwise.

But, it may be objected, may not credit contraction overcompensate the errors of the boom and itself cause distortions that need correction? It is true that credit contraction may overcompensate, and, while contraction proceeds, it may cause interest rates to be higher than free-market levels, and investment lower than in the free market. But since contraction causes no positive mal-investments, it will not lead to any painful period of depression and adjustment. If businessmen are misled into thinking that less capital is available for investment than is really the case, no lasting damage in the form of wasted investments will ensue.[13] Furthermore, in the nature of things, credit contraction is severely limited—it cannot progress beyond the extent of the preceding inflation.[14] Credit expansion faces no such limit.

Bastiat, ao grupo [relacionado com "A Lei"; jusnaturalismo]

Transactions are no longer regulated by free bargaining and discussion, and the mutuality of services disappears.

In this state of things the true notion of Property is extinguished, and everyone appeals to the Law to give his services a factitious value. 

We enter then upon the era of privileges. Spoliation, ever improving in subtlety, fortifies herself in Monopoly, and takes refuge behind Restrictions. She displaces the natural current of exchanges, and sends capital into artificial channels, and with capital, labor—and with labor, population. She gets painfully produced in the North what is produced with facility in the South; creates precarious classes and branches of industry; substitutes for the gratuitous forces of nature the onerous fatigues of labor; cherishes establishments that can sustain no rivalry, and invokes against competitors the employment of force; provokes international jealousies; flatters patriotic arrogance; and invents ingenious theories, which make accomplices of her own dupes. She constantly renders imminent industrial crises and bankruptcies, shakes to its foundation all confidence in the future, all faith in liberty, all consciousness of what is just. At length, when science exposes her misdeeds, she stirs up against science her own victims, by proclaiming a Utopia! and ignores not only the science that places obstacles in her path, but the very idea of any possible science, by this crowning sentence of skepticism—There are no principles! 

Under the pressure of suffering, at length the masses rise, and overturn everything that is above them. Government, taxes, legislation, everything is at their mercy, and you imagine perhaps that there is now an end to the reign of Spoliation;—that the mutuality of services is about to be established on the only possible, or even imaginable basis—Liberty. Undeceive yourself. The fatal idea, alas! has permeated the masses, that Property has no other origin, no other sanction, no other legitimacy, no other foundation, than Law; and then the masses set to work legislatively to rob one another. Suffering from the wounds that have been inflicted upon them, they undertake to cure each of their members by conceding to him the right to oppress his neighbor, and call this Solidarity and Fraternity. “You have produced—I have not produced—we are solidaires—let us divide.” “You have something—I have nothing—we are brethren—let us share.” It will be our duty then to examine the improper use that has been made in these latter days of the terms association, organization, labor, gratuite du credit [crédito fácil?], etc. We shall have to subject them to this test—Do they imply Liberty or Oppression? In other words, are they in unison with the great Economic laws, or are they distortions of those laws? 

Spoliation is a phenomenon too universal, too persistent, to permit us to attribute to it a character purely accidental. In this, as in many other matters, we cannot separate the study of natural laws from the study of their Perturbations. But, it may be said, if spoliation enters necessarily into the play of the social mechanism as a dissonance, how can you venture to assert the Harmony of the Economic laws? I must repeat here what I have said in another place, namely, that in all that concerns man, a being who is only perfectible because he is imperfect, Harmony consists not in the absolute absence of evil, but in its gradual diminution. The social body, like the human body, is provided with a curative force, a vis medicatrix, the laws and infallible power of which it is impossible to study without again exclaiming, Digitus Dei est hic[O dedo de Deus está aqui].

MISES

Primeiro capítulo [The Distribution of Consumption Goods in the Socialist Commonwealth] do famoso livro em que Mises detona A MERA POSSIBILIDADE de algum cálculo econômico em uma economia planificada. [COMPLETO AQUI]

"Under socialism all the means of production are the property of the community. It is the community alone which can dispose of them and which determines their use in production. It goes without saying that the community will only be in a position to employ its powers of disposal through the setting up of a special body for the purpose. The structure of this body and the question of how it will articulate and represent the communal will is for us of subsidiary importance. One may assume that this last will depend upon the choice of personnel, and in cases where the power is not vested in a dictatorship, upon the majority vote of the members of the corporation.

The owner of production goods, who has manufactured consumption goods and thus becomes their owner, now has the choice of either consuming them himself or of having them consumed by others. But where the community becomes the owner of consumption goods, which it has acquired in production, such a choice will no longer obtain. It cannot itself consume; it has perforce to allow others to do so. Who is to do the consuming and what is to be consumed by each is the crux of the problem of socialist distribution.

It is characteristic of socialism that the distribution of consumption goods must be independent of the question of production and of its economic conditions. It is irreconcilable with the nature of the communal ownership of production goods that it should rely even for a part of its distribution upon the economic imputation of the yield to the particular factors of production. It is logically absurd to speak of the worker's enjoying the "full yield" of his work, and then to subject to a separate distribution the shares of the material factors of production. For, as we shall show, it lies in the very nature of socialist production that the shares of the particular factors of production in the national dividend cannot be ascertained, and that it is impossible in fact to gauge the relationship between expenditure and income.

What basis will be chosen for the distribution of consumption goods among the individual comrades is for us a consideration of more or less secondary importance. Whether they will be apportioned according to individual needs, so that he gets most who needs most, or whether the superior man is to receive more than the inferior, or whether a strictly equal distribution is envisaged as the ideal, or whether service to the State is to be the criterion, is immaterial to the fact that, in any event, the portions will be meted out by the State.

Let us assume the simple proposition that distribution will be determined upon the principle that the State treats all its members alike; it is not difficult to conceive of a number of peculiarities such as age, sex, health, occupation, etc., according to which what each receives will be graded. Each comrade receives a bundle of coupons, redeemable within a certain period against a definite quantity of certain specified goods. And so he can eat several times a day, find permanent lodgings, occasional amusements and a new suit every now and again. Whether such provision for these needs is ample or not, will depend on the productivity of social labor.

Moreover, it is not necessary that every man should consume the whole of his portion. He may let some of it perish without consuming it; he may give it away in presents; he many even in so far as the nature of the goods permit, hoard it for future use. He can, however, also exchange some of them. The beer tippler will gladly dispose of non-alcoholic drinks allotted to him, if he can get more beer in exchange, whilst the teetotaler will be ready to give up his portion of drink if he can get other goods for it. The art lover will be willing to dispose of his cinema tickets in order the more often to hear good music; the Philistine will be quite prepared to give up the tickets which admit him to art exhibitions in return for opportunities for pleasure he more readily understands. They will all welcome exchanges. But the material of these exchanges will always be consumption goods. Production goods in a socialist commonwealth are exclusively communal; they are an inalienable property of the community, and thus res extra commercium.

The principle of exchange can thus operate freely in a socialist state within the narrow limits permitted. It need not always develop in the form of direct exchanges. The same grounds which have always existed for the building-up of indirect exchange will continue in a socialist state, to place advantages in the way of those who indulge in it. It follows that the socialist state will thus also afford room for the use of a universal medium of exchange--that is, of money. Its role will be fundamentally the same in a socialist as in a competitive society; in both it serves as the universal medium of exchange. Yet the significance of money in a society where the means of production are State controlled will be different from that which attaches to it in one where they are privately owned. It will be, in fact, incomparably narrower, since the material available for exchange will be narrower, inasmuch as it will be confined to consumption goods. Moreover, just because no production good will ever become the object of exchange, it will be impossible to determine its monetary value. Money could never fill in a socialist state the role it fills in a competitive society in determining the value of production goods. Calculation in terms of money will here be impossible.

The relationships which result from this system of exchange between comrades cannot be disregarded by those responsible for the administration and distribution of products. They must take these relationships as their basis, when they seek to distribute goods per head in accordance with their exchange value. If, for instance 1 cigar becomes equal to 5 cigarettes, it will be impossible for the administration to fix the arbitrary value of 1 cigar = 3 cigarettes as a basis for the equal distribution of cigars and cigarettes respectively. If the tobacco coupons are not to be redeemed uniformly for each individual, partly against cigars, partly against cigarettes, and if some receive only cigars and others only cigarettes, either because that is their wish or because the coupon office cannot do anything else at the moment, the market conditions of exchange would then have to be observed. Otherwise everybody getting cigarettes would suffer as against those getting cigars. For the man who gets one cigar can exchange it for five cigarettes, and he is only marked down with three cigarettes.

Variations in exchange relations in the dealings between comrades will therefore entail corresponding variations in the administrations' estimates of the representative character of the different consumption-goods. Every such variation shows that a gap has appeared between the particular needs of comrades and their satisfactions because in fact, some one commodity is more strongly desired than another.

The administration will indeed take pains to bear this point in mind also as regards production. Articles in greater demand will have to be produced in greater quantities while production of those which are less demanded will have to suffer a curtailment. Such control may be possible, but one thing it will not be free to do; it must not leave it to the individual comrade to ask the value of his tobacco ticket either in cigars or cigarettes at will. If the comrade were to have the right of choice, then it might well be that the demand for cigars and cigarettes would exceed the supply, or vice versa, that cigars or cigarettes pile up in the distributing offices because no one will take them.

If one adopts the standpoint of the labor theory of value, the problem freely admits of a simple solution. The comrade is then marked up for every hour's work put in, and this entitles him to receive the product of one hour's labor, less the amount deducted for meeting such obligations of the community as a whole as maintenance of the unfit, education, etc.

Taking the amount deducted for covering communal expenses as one half of the labor product, each worker who had worked a full hour would be entitled only to obtain such amount of the product as really answered to half an hour's work. Accordingly, anybody who is in a position to offer twice the labor time taken in manufacturing an article, could take it from the market and transfer to his own use or consumption . For the clarification of our problem it will be better to assume that the State does not in fact deduct anything from the workers towards meeting its obligations, but instead imposes an income tax on its working members. In that way every hour of work put in would carry with it the right of taking for oneself such amount of goods as entailed an hour's work.

Yet such a manner of regulating distribution would be unworkable, since labor is not a uniform and homogeneous quantity. Between various types of labor there is necessarily a qualitative difference, which leads to a different valuation according to the difference in the conditions of demand for and supply of their products. For instance, the supply of pictures cannot be increased ceteris paribus, without damage to the quality of the product. Yet one cannot allow the laborer who had put in an hour of the most simple type of labor to be entitled to the product of an hour's higher type of labor. Hence, it becomes utterly impossible in any socialist community to posit a connection between the significance to the community of any type of labor and the apportionment of the yield of the communal process of production. The remuneration of labor cannot but proceed upon an arbitrary basis; it cannot be based upon the economic valuation of the yield as in a competitive state of society, where the means of production are in private hands, since--as we have seen--any such valuation is impossible in a socialist community. Economic realities impose clear limits to the community's power of fixing the remuneration of labor on an arbitrary basis: in no circumstances can the sum expended on wages exceed the income for any length of time.

Within these limits it can do as it will. It can rule forthwith that all labor is to be reckoned of equal worth, so that every hour of work, whatever its quality, entails the same reward; it can equally well make a distinction in regard to the quality of work done. Yet in both cases it must reserve the power to control the particular distribution of the labor product. It will never be able to arrange that he who has put in an hour's labor shall also have the right to consume the product of an hour's labor, even leaving aside the question of differences in the quality of the labor and the products, and assuming moreover that it would be possible to gauge the amount of labor represented by any given article. For, over and above the actual labor, the production of all economic goods entails also the cost of materials. An article in which more raw material is used can never be reckoned of equal value with one in which less is used."

Bastiat: Competition

There is not in the whole vocabulary of Political Economy a word that has aroused the fury of modern reformers so much as the word Competition, which, in order to render it the more odious, they never fail to couple with the epithet, anarchical. 

What is the meaning of anarchical competition? I really don’t know. What could we substitute for it? I am equally ignorant. I hear people, indeed, calling out Organization! Association! What does that mean? Let us come to an understanding, once for all. I desire to know what sort of authority these writers intend to exercise over me, and all other living men; for I acknowledge only one species of authority, that of reason, if indeed they have it on their side. Is it their wish, then, to deprive me of the right of exercising my judgment on what concerns my own subsistence? Is their object to take from me the power of comparing the services I render with those I receive? Do they mean that I should act under the influence of restraint, exerted over me by them and not by my own intelligence? If they leave me my liberty, Competition remains. If they deprive me of freedom, I am their slave. Association will be free and voluntary, they say. Be it so. But then each group of associates will, as regards all other groups, be just what individuals now are in relation to each other, and we shall still have Competition. The association will be integral. A good joke truly. What! Anarchical Competition is now desolating society, and we must wait for a remedy, until, by dint of your persuasion, all the nations of the earth—Frenchmen, Englishmen, Chinese, Japanese, Caffres, Hottentots, Laplanders, Cossacks, Patagonians—make up their minds to unite in one of the forms of association you have devised? Why, this is just to avow that Competition is indestructible; and will you venture to say that a phenomenon that is indestructible, and consequently providential, can be mischievous? 

After all, what is Competition? Is it a thing that exists and is self-acting like the cholera? No, Competition is only the absence of constraint. In what concerns my own interest, I desire to choose for myself, not that another should choose for me, or in spite of me—that is all. And if anyone pretends to substitute his judgment for mine in what concerns me, I should ask to substitute mine for his in what concerns him. What guarantee have we that things would go on better in this way? It is evident that Competition is Liberty. To take away the liberty of acting is to destroy the possibility, and consequently the power, of choosing, of judging, of comparing; it is to annihilate intelligence, to annihilate thought, to annihilate man. From whatever quarter they set out, to this point all modern reformers tend—to ameliorate society they begin by annihilating the individual, under the pretext that all evils come from this source—as if all good did not come from it too. 

Salário Mínimo, pra que te quero? (Fonft Economia)

As drogas devem ser legalizadas?

COMEÇO?

ATÉ QUE ENFIM estamos criando um grupo para estudar, debater e defender as idéias liberais [libertárias!] aqui nas Alagoas.  Reunimo-nos hoje na UFAL e, ao que parece, AGORA VAI! Vejam que somos, agora, cinco blogueiros. A tendência é montarmos outro blogue para discutirmos os eventos locais sob a óptica do mercado livre [aqui seguiremos a linha de publicar textos consagrados]. Enjoy.

Mises Daily, 21 de Maio de 2012

The Nazis did not invent polylogism. They only developed their own brand.

Until the middle of the 19th century no one ventured to dispute the fact that the logical structure of mind is unchangeable and common to all human beings. All human interrelations are based on this assumption of a uniform logical structure. We can speak to each other only because we can appeal to something common to all of us, namely, the logical structure of reason. Some men can think deeper and more refined thoughts than others. There are men who unfortunately cannot grasp a process of inference in long chains of deductive reasoning. But as far as a man is able to think and to follow a process of discursive thought, he always clings to the same ultimate principles of reasoning that are applied by all other men. There are people who cannot count further than three; but their counting, as far as it goes, does not differ from that of Gauss or Laplace. No historian or traveler has ever brought us any knowledge of people for whom a and non-a were identical, or who could not grasp the difference between affirmation and negation. Daily, it is true, people violate logical principles in reasoning. But whoever examines their inferences competently can uncover their errors.

Because everyone takes these facts to be unquestionable, men enter into discussions; they speak to each other; they write letters and books; they try to prove or to disprove. Social and intellectual cooperation between men would be impossible if this were not so. Our minds cannot even consistently imagine a world peopled by men of different logical structures or a logical structure different from our own.

Yet, in the course of the 19th century this undeniable fact has been contested. Marx and the Marxians, foremost among them the "proletarian philosopher" Dietzgen, taught that thought is determined by the thinker's class position. What thinking produces is not truth but "ideologies." This word means, in the context of Marxian philosophy, a disguise of the selfish interest of the social class to which the thinking individual is attached. It is therefore useless to discuss anything with people of another social class. Ideologies do not need to be refuted by discursive reasoning; they must beunmasked by denouncing the class position, the social background, of their authors. Thus Marxians do not discuss the merits of physical theories; they merely uncover the "bourgeois" origin of the physicists.

The Marxians have resorted to polylogism because they could not refute by logical methods the theories developed by "bourgeois" economics, or the inferences drawn from these theories demonstrating the impracticability of socialism. As they could not rationally demonstrate the soundness of their own ideas or the unsoundness of their adversaries' ideas, they have denounced the accepted logical methods. The success of this Marxian stratagem was unprecedented. It has rendered proof against any reasonable criticism all the absurdities of Marxian would-be economics and would-be sociology. Only by the logical tricks of polylogism could etatism gain a hold on the modern mind.

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Polylogism is so inherently nonsensical that it cannot be carried consistently to its ultimate logical consequences. No Marxian was bold enough to draw all the conclusions that his own epistemological viewpoint would require. The principle of polylogism would lead to the inference that Marxian teachings also are not objectively true but are only "ideological" statements. But the Marxians deny it. They claim for their own doctrines the character of absolute truth. Thus Dietzgen teaches that "the ideas of proletarian logic are not party ideas but the outcome of logic pure and simple." The proletarian logic is not "ideology" but absolute logic. Present-day Marxians, who label their teachings the sociology of knowledge, give proof of the same inconsistency. One of their champions, Professor Mannheim, tries to demonstrate that there exists a group of men, the "unattached intellectuals," who are equipped with the gift of grasping truth without falling prey to ideological errors. Of course, Professor Mannheim is convinced that he is the foremost of these "unattached intellectuals." You simply cannot refute him. If you disagree with him, you only prove thereby that you yourself are not one of this elite of "unattached intellectuals" and that your utterances are ideological nonsense.

The German nationalists had to face precisely the same problem as the Marxians. They also could neither demonstrate the correctness of their own statements nor disprove the theories of economics and praxeology. Thus they took shelter under the roof of polylogism, prepared for them by the Marxians. Of course, they concocted their own brand of polylogism. The logical structure of mind, they say, is different with different nations and races. Every race or nation has its own logic and therefore its own economics, mathematics, physics, and so on. But, no less inconsistently than Professor Mannheim, Professor Tirala, his counterpart as champion of Aryan epistemology, declares that the only true, correct, and perennial logic and science are those of the Aryans. In the eyes of the Marxians Ricardo, Freud, Bergson, and Einstein are wrong because they are bourgeois; in the eyes of the Nazis they are wrong because they are Jews. One of the foremost goals of the Nazis is to free the Aryan soul from the pollution of the Western philosophies of Descartes, Hume, and John Stuart Mill. They are in search of arteigen German science, that is, of a science adequate to the racial character of the Germans.

We may reasonably assume as hypothesis that man's mental abilities are the outcome of his bodily features. Of course, we cannot demonstrate the correctness of this hypothesis, but neither is it possible to demonstrate the correctness of the opposite view as expressed in the theological hypothesis. We are forced to recognize that we do not know how out of physiological processes thoughts result. We have some vague notions of the detrimental effects produced by traumatic or other damage inflicted on certain bodily organs; we know that such damage may restrict or completely destroy the mental abilities and functions of men. But that is all. It would be no less than insolent humbug to assert that the natural sciences provide us with any information concerning the alleged diversity of the logical structure of mind. Polylogism cannot be derived from physiology or anatomy or any other of the natural sciences.

Neither Marxian nor Nazi polylogism ever went further than to declare that the logical structure of mind is different with various classes or races. They never ventured to demonstrate precisely in what the logic of the proletarians differs from the logic of the bourgeois, or in what the logic of the Aryans differs from the logic of the Jews or the British. It is not enough to reject wholesale the Ricardian theory of comparative cost or the Einstein theory of relativity by unmasking the alleged racial background of their authors. What is wanted is first to develop a system of Aryan logic different from non-Aryan logic. Then it would be necessary to examine point by point these two contested theories and to show where in their reasoning inferences are made which — although correct from the viewpoint of non-Aryan logic — are invalid from the viewpoint of Aryan logic. And, finally, it should be explained what kind of conclusions the replacement of the non-Aryan inferences by the correct Aryan inferences must lead to. But all this never has been and never can be ventured by anybody. The garrulous champion of racism and Aryan polylogism, Professor Tirala, does not say a word about the difference between Aryan and non-Aryan logic. Polylogism, whether Marxian or Aryan, or whatever, has never entered into details.

Polylogism has a peculiar method of dealing with dissenting views. If its supporters fail to unmask the background of an opponent, they simply brand him a traitor. Both Marxians and Nazis know only two categories of adversaries. The aliens — whether members of a nonproletarian class or of a non-Aryan race — are wrong because they are aliens; the opponents of proletarian or Aryan origin are wrong because they are traitors. Thus they lightly dispose of the unpleasant fact that there is dissension among the members of what they call their own class or race.

The Nazis contrast German economics with Jewish and Anglo-Saxon economics. But what they call German economics differs not at all from some trends in foreign economics. It developed out of the teachings of the Genevese Sismondi and of the French and British socialists. Some of the older representatives of this alleged German economics merely imported foreign thought into Germany. Frederick List brought the ideas of Alexander Hamilton to Germany, Hildebrand and Brentano brought the ideas of early British socialism. Arteigen German economics is almost identical with contemporary trends in other countries, e.g., with American Institutionalism.

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On the other hand, what the Nazis call Western economics and therefore artfremd is to a great extent an achievement of men to whom even the Nazis cannot deny the term German. Nazi economists wasted much time in searching the genealogical tree of Carl Menger for Jewish ancestors; they did not succeed. It is nonsensical to explain the conflict between economic theory, on the one hand, and Institutionalism and historical empiricism, on the other hand, as a racial or national conflict.

Polylogism is not a philosophy or an epistemological theory. It is an attitude of narrow-minded fanatics, who cannot imagine that anybody could be more reasonable or more clever than they themselves. Nor is polylogism scientific. It is rather the replacement of reasoning and science by superstitions. It is the characteristic mentality of an age of chaos.

Everything Is Offensive

O politicamente correto e a relativização do crime

O caso da estudante de Direito Mayara Petruso, bastante divulgado nas redes sociais, para muitos pode parecer, à primeira vista, um caso de crime. De acordo com a sentença divulgada em um site de notícias¹, a juíza federal Mônica Aparecida Bonavina Camargo coloca que: 

“A Constituição proíbe tais condutas a fim de que o preconceito – fato social – seja um dia passado e deixe de existir [...]. É importante que a sociedade seja conscientizada quanto à neutralidade que as questões de diferenças entre as pessoas devem envolver, não sendo a origem, a religião, o gênero, a cor de pele, a condição física, a idade etc. motivo para atitudes agressivas”. 

O que me chama atenção no caso, na qual a estudante foi punida, é essa forma de teorizar a discriminação. Discriminar (o que é natural do ser humano) é colocado como crime e ao mesmo tempo é relativizado (o que impede um julgamento justo, se é que isso é possível nesse caso), aqui reina a “justiça” do politicamente correto.

 Os comunistas podem discriminar a burguesia à vontade:

  "A segunda característica da burguesia é que ela, ao contrário do que tentam nos convencer, é uma classe-parasita, que não trabalha, que não realiza nenhuma atividade produtiva, que não contribui em nada para o aumento da riqueza social. “ ²

"Os trabalhadores já conduzem a produção. Mas o fazem de maneira isolada, inconsciente, sob as ordens de mercenários sem escrúpulos a mando da burguesia: os diretores, gerentes e chefes."²

 "Contra burguês, vote 16" 

É comum vermos distorções de entendimento da Economia, além de incitações a violência contra a “Classe Burguesa”, ora, sabemos que o objetivo de imediato das revoluções comunistas (defendida por alguns partidos socialistas) é a “tomada do poder” por, supostamente, uma classe social, para alcançar esse objetivo vale de tudo (segundo eles), inclusive matar (como foi feito em vários países durante o século XX) milhões de pessoas. 

A pergunta que não quer calar: 

Discriminar uma classe social e incitar violência de uma classe contra outra não é um ato criminoso, mas, discriminar pessoas que moram em uma determinada região é crime. Como planejar nossos atos tendo em vista a relativização do conceito de crime por parte do Estado?

 ¹ - http://www.pernambuco.com/ultimas/nota.asp?materia=20120517134931&assunto=82&onde=Brasil
 ² - http://www.pstu.org.br/teoria_materia.asp?id=11961&ida=35

Nuevo Códiguito del braziu del Paraguay

[Artigo 155 -furto- do projeto do novo código penal] 

Extinção da punibilidade

"§6º. A reparação do dano pelo agente, até a sentença de primeiro grau,extingue a punibilidade do furto simples ou com causa de aumento, desde que a vítima a aceite e que a coisa furtada não seja pública ou de domínio público."

O cara me furta algo e  se fizer o “favor” de devolver , acabou aí.  É isso mesmo? Para furto “simples” e para o com “causa de aumento”, que foi escrita assim: 

: 

" causa de aumento de pena 

§ 2º. A pena aumenta-se de um terço até a metade se o crime é cometido:

  I – com abuso de confiança ou mediante fraudeII – com invasão de domicílio;III – durante o repouso noturno;IV – mediante destreza;V – mediante o concurso de duas ou mais pessoas."

Mas vejam só... fiquei com uma dúvida: posso "aceitar" o meu bem de volta e querer, ainda, a condenação do meliante?

Mises Daily, 14 de Maio de 2012

"Production left to the market satisfies the profit-and-loss test of socially beneficial production.

For Tim Cook to obtain computer chips, glass screens, labor, and other resources to produce iPads, he must bid them away from other entrepreneurs who would have used them to produce other goods. By incurring the costs of production, Apple Inc. compensates the owners of resources for the value of the other goods they could have produced to satisfy a different group of consumers. Apple then uses the resources to produce iPads, which consumers of its products value more highly as demonstrated by their generating enough revenue for Apple Inc. to more than cover its costs."  

leoni, liberdade e lei, capítulo v: liberdade e legislação

As tentativas feitas por alguns acadêmicos, nos últimos tempos, de comparar diferentes formas de comportamento, como a de um comprador ou a de um vendedor, no mercado, e, digamos, a de um eleitor, em uma eleição política, com o objetivo de descobrir algum fator comum entre elas, pareceram-me estimulantes, não só por causa das questões metodológicas envolvidas, relativas às ciências econômica e política, respectivamente, mas também pelo fato de a questão de haver ou não diferença entre a posição econômica e a posição política — ou legal —, respectivamente, dos indivíduos dentro de uma mesma sociedade, ser uma das principais questões em debate entre liberais e socialistas durante os últimos cem ou 120 anos. 

Esse debate pode nos interessar em mais de um aspecto, na medida em que estamos tentando evidenciar um conceito de liberdade como a ausência de coerção exercida por outras pessoas, inclusive as autoridades, que implica liberdade nos negócios e em qualquer outra esfera da vida privada. As doutrinas socialistas defendem que, sob um sistema político e jurídico que outorga direitos iguais para todos, nenhuma vantagem na igualdade de direitos toca àquelas pessoas a quem faltam meios suficientes para se beneficiarem de muitos desses direitos. As doutrinas liberais, ao contrário, sustentam que todas as tentativas de “integrar” a “liberdade” política à “liberdade de desejo”, por parte dos “não tenho”, como sugerido ou imposto pelos socialistas, levam a contradições dentro do sistema, como a de não poder atribuir “liberdade”, concebida como ausência de desejo, a todos, sem suprimir a liberdade política e legal, concebida como ausência de coerção exercida por outras pessoas. Mas as doutrinas liberais acrescentam algo mais. Defendem, também, que nenhuma “liberdade de desejo” pode ser realmente alcançada por decreto ou através da direção do processo econômico pelas autoridades, como poderia ser conseguido nas bases

de um mercado livre.

Agora, o que pode ser considerado como um pressuposto comum a socialistas e liberais, é que existe uma diferença entre a liberdade legal e política do indivíduo, concebida como ausência de coerção, e liberdade “econômica” ou “natural” do indivíduo, se aceitamos a palavra “liberdade” também no sentido de “ausência de vontade”. Essa diferença é considerada sob pontos de vista opostos, por liberais e socialistas, mas, em última análise, ambos reconhecem que a “liberdade” pode ter significados diferentes, senão incompatíveis, para indivíduos pertencentes à mesma sociedade. 

Não há qualquer dúvida de que introduzir “liberdade de vontade”, em um sistema político ou legal, implica uma alteração necessária do conceito de “liberdade”, entendida como liberdade contra coerção, garantida por aquele sistema. Isso acontece, como destacam os liberais, por causa de certas cláusulas especiais dos estatutos e decretos de inspiração socialista, incompatíveis com a liberdade nos negócios. Mas isso acontece também, e acima de tudo, porque a própria tentativa de se introduzir a “liberdade de querer” tem de ser feita — como  admitem todos os socialistas, pelo menos na medida em que querem lidar com sociedades historicamente pré-existentes e não limitar seus esforços de promoverem sociedades de voluntários, em alguma parte remota do mundo — primeiro através de legislação e, portanto, por meio de decisões baseadas na maioria, sem levar em conta se as legislaturas são eleitas, como em quase todos os atuais sistemas políticos, ou se são a expressão direta do povo, como o eram na Roma antiga ou nas velhas cidades gregas e como o são nas atuais Landsgemeinde suíças. Nenhum sistema de livre comércio pode funcionar realmente, se não está enraizado em um sistema legal e político que ajude os cidadãos a neutralizarem as interferências, por parte de outras pessoas — inclusive as autoridades —, em seus negócios. Mas um aspecto característico dos sistemas de livre comércio parece também ser o fato de que são compatíveis — e provavelmente compatíveis apenas com — com sistemas políticos e legais de pouco ou nenhum recurso à legislação, pelo menos no que concerne à vida privada e aos negócios.

Por outro lado, os sistemas socialistas não podem continuar a existir sem a ajuda da legislação. Nenhuma evidência histórica, ao que sei, apoia a suposição de que a “liberdade de querer”, socialista, para todos os indivíduos, é compatível com instituições como o sistema do direito consuetudinário <common law> ou o sistema romano, onde o processo de formulação de leis é desempenhado diretamente por cada um dos cidadãos, com ajuda apenas ocasional de juízes e especialistas como os juristas romanos e sem recorrer, em geral, à legislação. 

Somente os chamados “utopistas” que tentaram criar colônias especiais de voluntários para formarem sociedades socialistas, imaginavam que podiam fazê-lo sem legislação. Mas eles também, na verdade, conseguiram passar sem ela apenas curtos períodos de tempo, até que suas associações voluntárias se transformaram em amálgamas caóticos de velhos voluntários, ex-voluntários e novos adeptos sem crenças especiais em qualquer forma de socialismo. O socialismo e a legislação devem estar inevitavelmente ligados para que as sociedades socialistas se mantenham vivas. Essa é, provavelmente, a principal razão do crescente peso atribuído, em sistemas de direito consuetudinário como o inglês e o americano, não só aos estatutos e decretos mas também à própria ideia de que um sistema legal é, acima de tudo, um sistema legislativo, e de que a “certeza” é a efetividade de curto prazo da lei escrita. 

A razão pela qual socialismo e legislação estão inevitavelmente ligados é que, enquanto o mercado livre implica um ajuste espontâneo da oferta e da demanda com base nas escalas de preferência dos indivíduos, esse ajuste não pode acontecer, se a demanda não é do tipo a ser satisfeita pela oferta, nas mesmas bases, isto é, se as escalas de preferência daqueles que entram no mercado não são, na realidade, complementares. Isso pode acontecer, por exemplo, em todos os casos em que os compradores achem que os preços pedidos pelos vendedores sejam altos demais, ou quando os vendedores achem que os preços oferecidos pelos compradores sejam baixos demais. Vendedores que não estão em posição de satisfazer os compradores, ou compradores que não estão em posição de satisfazer os vendedores, não podem constituir um mercado, a não ser que vendedores ou compradores tenham algum meio, a sua disposição, de coibir sua contraparte, no mercado, a atender suas exigências. De acordo com os socialistas, os pobres são “privados” pelos ricos daquilo de que precisam. Essa forma de colocar as coisas é simplesmente um abuso de linguagem, pois não está provado que os “tenho” e os “não tenho” tinham o direito à posse comum de todas as coisas. 

É certo que evidências históricas apoiam o ponto de vista socialista, em alguns casos, como invasões e conquistas, e geralmente em casos de roubo, pirataria, chantagem e assim por diante. Mas isso nunca ocorre no livre mercado, quer dizer, em um sistema que permite a compradores e vendedores individuais reagirem à coerção exercida por outras pessoas. Vimos também, em relação a isso, que muito poucos economistas levam em consideração essas atividades “desprodutivas”, uma vez que são, em geral, encaradas como completamente à margem do mercado e, por isso, indignas de investigação econômica. Se ninguém pode ser coagido, sem a possibilidade de se defender, a pagar por bens e serviços mais do que pagaria sem coerção, as atividades desprodutivas não podem acontecer, já que, nesses casos, nenhum suprimento correspondente de bens e serviços se adequará à demanda, e nenhum ajuste, entre compradores e vendedores, será obtido. A legislação pode conseguir o que um ajuste espontâneo jamais poderia. A demanda pode ser obrigada a atender a oferta, Ou a oferta pode ser obrigada a satisfazer a demanda, de acordo com certos regulamentos aprovados por corpos legislativos, que possivelmente decidem, como acontece atualmente, baseados em artifícios de procedimentos como a regra da maioria. O fato sobre a legislação que é imediatamente percebido pelos teóricos não menos do que pelas pessoas comuns, é que os regulamentos são impostos a todos, mesmo àqueles que nunca participaram de seu processo de formulação e que nunca tinham tomado conhecimento dele. Esse fato distingue um estatuto de uma decisão expressa por um  juiz em um caso trazido a ele pelas partes. A decisão pode ser imposta, mas não o é de forma automática, ou seja, sem a colaboração das partes envolvidas, ou pelo menos de uma delas. De qualquer forma, não é diretamente aplicável a outras pessoas que não tinham parte na disputa ou que não estavam representadas pelas partes no caso. 

Leoni em Liberdade e Lei, no segundo capítulo

A história está tão cheia de exemplos de violência, roubo, invasões de terras e assim por diante, que muitos pensadores se sentiram justificados em dizer que a origem da propriedade privada é simplesmente a violência, e que, por isso, deve ser encarada como irremediavelmente ilícita, hoje, assim como nos primórdios. Os estoicos, por exemplo, imaginavam que toda a extensão de terra sobre o planeta era originalmente comum a todos os homens. Chamavam essa condição legendária de communis possessio originaria. Certos apóstolos do Cristianismo, particularmente nos países latinos, ecoaram essa premissa. Assim, Santo Ambrósio, o famoso arcebispo de Milão, pôde escrever, no século quinto da Igreja da Inglaterra, que se, por sua vez, a Natureza providenciou para que as coisas fossem comuns a todos, os direitos de propriedade privada eram devidos à usurpação. Ele cita os estoicos, que sustentavam, segundo ele, que tudo na terra e nos mares foi criado para o uso comum de todos os seres humanos. Um discípulo de Santo Ambrósio, chamado o Ambrosiastro, diz que Deus deu tudo ao homem em comum, e que isso se aplica ao Sol e à chuva,  assim como à terra. O mesmo é dito por São Zeno de Verona — que deu nome a uma das mais magníficas igrejas do mundo — referindo-se aos homens de tempos ancestrais: «Eles não tinham propriedade privada, e tinham, sim, tudo em comum, como o Sol, os dias, as noites, a chuva, a vida e a morte, uma vez que tudo tinha sido dado a eles no mesmo grau, sem qualquer exceção, pela Divina Providência.» E o mesmo santo acrescenta, obviamente aceitando a ideia de que a propriedade privada é o resultado de coerção e tirania: «O proprietário privado é, sem dúvida,  semelhante a um tirano, tendo ele sozinho o controle total de coisas que poderiam ser úteis a várias pessoas.” Praticamente a mesma ideia pode ser encontrada nos trabalhos de certos canonistas, alguns séculos mais tarde. Por exemplo, o autor da primeira sistematização das regras da Igreja, o assim chamado decretum Gratiani, diz: “Aquele que está determinado a acumular mais do que precisa, é um ladrão.”

Os socialistas modernos, incluindo Marx, simplesmente produziram uma versão revisada dessa mesma ideia. Por exemplo, Marx distingue vários estágios na história da humanidade: um primeiro estágio no qual as relações de produção eram as de cooperação, e um segundo estágio no qual algumas pessoas adquiriram, pela primeira vez, o controle dos meios de produção, colocando, com isso, uma minoria em posição de ser mantida pela maioria. O antigo arcebispo de Milão diria, em linguagem menos complicada e mais efetiva: “À natureza devemos a lei das coisas em comum; a usurpação é devida à lei privada.”

Podemos nos perguntar, é claro, como é possível falar de «coisas comuns a todos». Quem decretou que todas as coisas são «comuns» a todos os homens, e por quê? A resposta usual dada pelos estoicos e seus discípulos, os discípulos do Cristianismo dos primeiros séculos depois de Cristo, era que, assim como a Lua, o Sol e a chuva são comuns a todos os homens, não há razão alguma para se afirmar que as outras coisas, como a terra, não sejam, também, comuns. Esses advogados do comunismo não se deram ao trabalho de fazer uma análise semântica da palavra «comum». Senão, teriam descoberto que a terra não pode ser «comum» a todos os homens da mesma maneira que o Sol e a Lua o são, e que, por isso, não é a mesma coisa permitir que cultivem a terra em comum e deixar que usem o luar, ou a luz do Sol, ou o ar fresco, quando saem para passear. Os economistas modernos explicam a diferença chamando atenção para o fato de que  não há escassez de luar, enquanto que há escassez de terra. Não obstante a natureza truísta dessa  afirmação, uma pretensa analogia entre coisas escassas, como terra arável, e coisas abundantes, como luar, sempre foi uma boa razão, aos olhos de muitas pessoas, para afirmarem que os «não tenho» são constrangidos pelos «tenho», e que os últimos privaram ilicitamente os primeiros de certas coisas originalmente «comuns » a todos os homens. Essa confusão semântica introduzida no uso da palavra «comum», pelos estoicos e pelos antigos discípulos do Cristianismo, foi mantida por socialistas modernos do todos os tipos e repousa, acredito, na origem da tendência, manifestada em especial nos últimos tempos, de se utilizar a palavra «liberdade» em um sentido inequívoco que relaciona «liberdade de desejo» com «liberdade contra a coerção por outras pessoas». 

Essa confusão está ligada, por sua vez, a outra. Quando um merceeiro, um médico, ou um advogado, espera por fregueses ou clientes, cada um daqueles pode se sentir dependente destes últimos para viver. Isso é bem verdade. Mas se nenhum freguês ou cliente aparece, seria um abuso de linguagem dizer que os fregueses ou clientes  que não aparecem coagem o merceeiro, ou o médico, ou o advogado, a morrer de fome. De fato, nenhum cometeu qualquer coerção contra este, pela simples razão de que ninguém sequer apareceu. Trocando em miúdos, simplesmente não houve fregueses ou clientes. Se supomos, agora, que um cliente aparece e oferece um pagamento muito baixo ao médico, ou ao advogado, não se pode dizer que esse cliente em particular está «coagindo» o médico, ou o advogado, a aceitar seu pagamento. Podemos desprezar um homem que sabe nadar e não salva um semelhante, que está se afogando, sob seus olhos, em um rio, mas seria um abuso de linguagem dizer que, ao deixar de salvar o homem do afogamento, aquele estava «coagindo» o último a se afogar. Nessa relação, devo concordar com um famoso jurista alemão do século dezenove, Rudolph Jhering, que ficou indignado com a injustiça do argumento desenvolvido por Portia contra Shylock, representando Antônio, em O mercador de Veneza, de Shakespeare. Podemos desprezar Shylock, mas não podemos dizer que “coagiu” Antônio ou qualquer um a fazer um acordo com ele — um acordo que implicava, segundo as circunstâncias, a morte do último. O que Shylock queria era apenas coagir Antônio a honrar seu acordo, depois de tê-lo assinado. Apesar dessas considerações óbvias, as pessoas estão em geral inclinadas a julgar Shylock da mesma maneira que julgariam um assassino e a condenar agiotas como se fossem ladrões ou piratas, apesar de que nem Shylock, nem qualquer agiota comum pode ser propriamente acusado de coagir alguém a procurá-lo para pedir dinheiro a juros usurários. 

A despeito dessa diferença entre “coerção”, no sentido de algo na verdade feito para prejudicar alguém contra sua vontade, e no sentido de comportamentos como o de Shylock, muitas pessoas, especialmente nos últimos cem anos, na Europa, tentaram injetar na linguagem corrente uma confusão semântica, cujo resultado é que o homem que nunca se dedicou a tomar uma atitude definida em favor de outras pessoas, e que, por isso, não faz nada por elas, é censurado por sua pretensa “omissão” e é acusado como se tivesse “coagido” os outros a fazerem algo contra sua vontade. Isso, em minha opinião, não está de acordo com o uso correto da linguagem corrente dos países que me são familiares. Você não “coage” alguém, se simplesmente deixa de fazer por ela algo que não se comprometeu a fazer. Todas as teorias socialistas sobre a chamada exploração dos trabalhadores pelos empregadores — e, em geral, dos “não tenho” pelos “tenho” — são, em última análise, baseadas nessa confusão semântica. 

Sempre que os historiadores independentes da Revolução Industrial do século dezenove, na Inglaterra, falam da “exploração” dos trabalhadores pelos empregadores, subentendem precisamente essa ideia de que os empregadores exerciam “coerção” sobre os trabalhadores, para que estes aceitassem salários parcos pelo trabalho pesado. Quando códigos como o Trade Disputes Act de 1906, na Inglaterra, outorgaram aos sindicatos o privilégio de coagirem através de atos ilegais os empregadores a aceitarem suas reivindicações, a ideia era a de que os empregados eram a parte mais fraca, e que, por isso, podiam ser “coagidos” pelos empregadores a aceitarem salários baixos, em vez de altos. O privilégio concedido pelo Trade Disputes Act baseava-se no princípio familiar aos europeus liberais daquela época e correspondia também ao sentido de “liberdade” aceito, na linguagem corrente, de que você é “livre”, quando pode impedir outras pessoas de o reprimirem. O problema foi que, enquanto a coerção concedida pelo Act aos sindicatos como um privilégio tinha o significado usual dessa palavra na linguagem corrente, a “coerção” por parte dos empregadores que o privilégio destinava-se a coibir não foi entendida no sentido que essa palavra tinha e ainda tem, na linguagem comum. Se consideramos as coisas desse ponto de vista, temos de concordar com sir Frederick Pollock, que escreveu, em seu Law of torts, que “ a ciência legal não tem, evidentemente, nada a ver com a operação empírica violenta sobre os políticos” , que a legislatura britânica acreditou caber ao Trade Disputes Act de 1906. Precisamos lembrar, também, que a utilização corrente da linguagem não tem nada a ver com o significado de “coerção” que tornou conveniente, aos olhos dos legisladores britânicos, infligir ao corpo político uma operação violenta desse tipo.

Historiadores sem preconceitos, como o professor T. S. Ashton, demonstraram que a situação geral das classes desfavorecidas da população inglesa, depois das guerras napoleônicas, era devida a causas que não tinham qualquer relação com o comportamento dos empreendedores da nova era industrial, naquele país, e que sua origem deve ser buscada nos primórdios da história da Inglaterra. Além disso, os economistas já muitas vezes demonstraram, tanto com a apresentação de argumentos de natureza teórica irrefutáveis quanto com o exame de dados estatísticos, que bons salários dependem da razão entre a quantia de capital investido e o número de trabalhadores. 

Esse, porém, não é o ponto principal de nosso argumento. Se dermos à “coerção” esses significados diversos como os que acabamos de ver, poderemos concluir facilmente que os empresários da época da Revolução Industrial, na Inglaterra, “coagiam” as pessoas a habitarem, por exemplo, casas velhas e insalubres, apenas porque não construíram para seus trabalhadores um número suficiente de casas novas e boas. Da mesma maneira, poderíamos dizer que os industrialistas que não fazem investimentos gigantescos em maquinaria, independentemente dos retornos que possam ter, estão «coagindo» seus trabalhadores a se contentarem com salários baixos. De fato, essa confusão semântica é acalentada por vários grupos de propaganda e pressão interessados em dar definições persuasivas de «liberdade» e de «coerção ». Como resultado, as pessoas podem ser censuradas pela «coerção » que alegadamente exercem sobre outras pessoas com as quais jamais tiveram nada a ver. Assim, a propaganda de Mussolini e Hitler, antes e durante a II Guerra Mundial, incluía a afirmação de que povos de outros países tão distantes da Itália ou da Alemanha como, digamos, o Canadá ou os Estados Unidos, estavam «coagindo» os italianos e os alemães a se contentarem com seus poucos recursos materiaise seus territórios comparativamente pequenos, apesar de nem uma milha sequer de território alemão ou italiano jamais ter sido tomada pelo Canadá ou pelos Estados Unidos. Da mesma forma, após a última Guerra Mundial, muitas pessoas diziam — especialmente os pertencentes à “intelligentsia” italiana — que os ricos proprietários de terras do Sul da Itália eram os responsáveis diretos pela miséria dos pobres trabalhadores daquelas regiões, ou que os habitantes do Norte da Itália eram os responsáveis pela depressão do interior do Sul, ainda que nenhuma demonstração pudesse ser seriamente feita para provar que a riqueza de certos proprietários de terras do Sul da Itália era a causa da pobreza dos trabalhadores, ou que o padrão razoável de vida desfrutado pelo povo do Norte da Itália era a causa da ausência de tal padrão no Sul. O pressuposto implícito em todas essas ideias era o de que os “tenho” do Sul da Itália estavam “coagindo” os “não tenho” a uma existência pobre, da mesma forma que os habitantes do Norte estavam “coagindo” os que viviam no Sul a se contentarem com receitas agrícolas, em vez de construírem indústrias. Devo salientar também que uma confusão semântica análoga está por trás de muitas das acusações feitas aos povos do Ocidente — incluindo os Estados Unidos — e das atitudes adotadas em relação a eles pelos grupos dirigentes em certas ex-colônias, como o Egito e a Índia. 

Isso resulta em ocasionais motins e tumultos e todo tipo de ações hostis por parte das pessoas que se sentem «coagidas». Outro resultado não menos importante é a série de decretos, códigos e dispositivos, em níveis nacional e internacional, criados para ajudar as pessoas alegadamente «coagidas» a contra-atacarem essa «coerção», através de artifícios, privilégios, concessões, imunidades etc. legalmente impostos. Assim, uma confusão de palavras causa uma confusão de sentimentos, e ambos reagem reciprocamente um sobre o outro para confundir as coisas ainda mais. 

Não sou tão ingênuo quanto Leibniz, que supunha que muitas questões econômicas e políticas podiam ser ajustadas, não através de disputas — clainoribus —, mas com uma espécie de ajuste de contas — calculemus —, através do qual seria possível para todas as pessoas envolvidas concordarem, pelo menos em princípio, sobre as questões em jogo. Mas decididamente sustento que um esclarecimento semântico é mais útil do que se acredita, bastando que as pessoas estejam em posição de dele se beneficiarem.