Political Production vs. Economic Production

October 16th, 2010   Submitted by David Kretzmann

http://davidkretzmann.com/images/handshake.jpgIt is often said that government represents the collective ability of society to come together and legislate for the “public good.” What exactly the “public good” represents is rarely agreed upon by the two dominant political parties, but they both generally agree that it is the role of government to meddle in society in one form or another. The irony is that to help “the people,” government must first expropriate money from the people it intends to help. All this is defended as “public service,” which presents a selfless image of noble representatives working for the betterment of society. The term “public service” both greatly distorts the reality of government operations and negates where the actual service really takes place: in the private sector.

Economic historian Thomas E. Woods, Jr. lays out the distinction between the economic and political means of production. The economic means of production is fully utilized only in a complete free market, where someone accumulates wealth based on their ability to produce a product or service that is of value to other individuals. For example, let’s observe a scenario where a customer gives a baker three dollars for a loaf of bread. Economic wealth is created through this voluntary exchange because both the baker and the customer value each other’s item more than their own. The baker would rather have three dollars than his loaf of bread, and the customer would rather have a loaf of bread than his three dollars. The exchange mutually pleases both the baker and the customer, and it is this principle of voluntary exchange that the economic means of production is based upon.

Then you have the political means of production through government. A political transaction comes at the expense of one person for the benefit of another, because on its own government has no wealth or productive capabilities. Government can offer a “service” only after forcefully extracting the means to pay for it from another person or group. In other words, government survives based not on the value of its services (as with economic production), but rather on how much wealth it can take from society. Governments must tax, borrow, or print money (all of which come at the expense of the people) to offer its programs; whereas businesses in a free market must produce a service that people voluntarily choose to support.

“[N]o government, so called, can reasonably be trusted for a moment, or reasonably be supposed to have honest purposes in view, any longer than it depends wholly upon voluntary support.” — Lysander Spooner, No Treason: III

Curiously, in mainstream education, economics, and history, those who expand the political means of production are praised as “public servants” while those who use the economic means of production are labeled “exploiters.” The political means of production represents nothing less than collective thievery, or what French statesman Frederic Bastiat termed “legal plunder.” Elected thievery is still thievery. The fact that some of the thieves may be elected by a majority of the people makes it no less of a moral debasement or fraud. An individual thief is immediately arrested if he tries to steal wealth with force, yet the same action of theft is casually accepted when undertaken by collective government.

One need only look through history to recognize that the vast improvements in the human condition have come from the economic, not political, means of production. People commonly object with the argument that the relative free market conditions in the 1800s exploited workers with “wage slavery” and led to a decrease in the living conditions of the average person. My first reaction to this argument is: Why would millions of people voluntarily immigrate to the U.S. precisely during those times when the common person was supposedly being most “exploited?” By ignoring this question, free market skeptics are conceding that the millions of immigrants who traveled to the U.S. for a new life were completely duped and bound to become “wage slaves” to corporate tyrants. This anti-capitalist narrative of history is widely accepted and used to bludgeon people who dare suggest it was the free market (not government) that increased the living conditions of the common person, thus why millions of relatively poor people from all corners of the earth migrated specifically to the U.S. during the 19th century.

What attracted the millions of migrants from Europe, Asia, Mexico, and other world regions to the U.S.? The logical answer is that they were drawn to a society that was built on the concept of the economic means of production, a society where individual choice and initiative reigned supreme. People tend to show their highest preferences in society by voting with their feet. People will not voluntarily move somewhere if they believe they will be worse off because of it, nor will they voluntarily stay in a dismal scenario if they have a better alternative. History provides the simple but crucial observation that when given the choice people choose societies that emphasize the economic, not political, means of production. This means a society built on strong property rights, little or no economic regulation, and voluntary exchange.

“How do people best vote? With their feet. Where do people try to immigrate? …[S]o far as the United States is concerned, people from all over the world seek to immigrate here. They aren’t coming here to be made miserable. They aren’t coming here to be exploited. And you can’t say that they’re all fools; they know what they’re getting into.” — Milton Friedman

There is no compromise between political production and economic production. Political production is based entirely on force, coercion, and a zero-sum game of theft and welfare. Such a system can be philosophically defended as an instrument that can be used for good, provided the right people are the plunderers and distributors. However, such a notion defends the idea that one person or a small group of people know the perfect remedy to societal ills, and demolishes the concept of individual liberty, responsibility, and charity. People are not perfect, but you will not perfect them further by concentrating coercive political power in the hands of a select few who promise to mold mankind for the better. If the bureaucrats’ knowledge, skills, and capabilities are truly worthwhile and necessary, they should have no trouble prospering in a free economy by voluntarily offering their services to those who may find them of value.

We have too often seen the economic and moral disasters caused by the political means of production. Such a system is not fit for a free, moral, and responsible individual or society. It is time that we fully embrace the economic means of production, a system where businesses survive because of their service and productivity to their fellow man, not their political clout; a system where individuals are free to pursue their own separate interests without limitations or threats of collective coercion; a system where power and sovereignty is localized within each individual. Such a system is the natural state of freedom, and it is the ultimate tool to bring about the virtues of service, cooperation, and responsibility.

Originally printed on DavidKretzmann.com.

One Response to “Political Production vs. Economic Production”

  1. GudOleRebelNo Gravatar says:

    Fantastic Article!