Parasites And Property Rights

BIBLIOGRAPHICAL NOTE:  The information in this episode comes from Red Flags Press.  Their main web site is very useful for research purposes, and I recommend it!

We follow the idea of the “social parasite” through socialist writing and show how it shifts from moral accusation to an enforceable legal category once society claims ownership over individual labor. We argue that the transaction costs of monitoring effort and assigning “socially useful” work push real-world socialism toward surveillance, coercion, and punishment.
• socialist critique of wage labor as work or starve
• transaction costs as defining, monitoring, and enforcing property rights
• the property rights switch from self-ownership to society owning labor
• “from each according to their ability” as an obligation backed by force
• socialist writers labeling middlemen and many professions as parasites
• the party as the decision-maker when prices are suppressed
• Joseph Brodsky’s trial as a real anti-parasite enforcement example
• why the parasite problem expands and becomes politically arbitrary
• how similar labor-claim logic shows up in authoritarian socialism and fascism
• why Scandinavian social democracy is capitalism, not classical socialism
The book of the week is Lenin’s What Is to Be Done? Burning Questions of Our Moment, and I strongly recommend it.

Links:

Red Flags, "Why Socialism Says Slacking is Theft."

Moments in Soviet History: The Trial of Joseph Brodsky

Leo Huberman, The ABCs of Socialism.

"Soviet Era 'Parasites'" https://www.themoscowtimes.com/2016/05/20/soviet-era-parasites-return-to-todays-russian-a52934

If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !

You can follow Mike Munger on Twitter at @mungowitz 

Transcript

Parasitism As A Social Idea

SPEAKER_00 0:01

This is Mike Munger, the knower of important things, from Duke University. Today, parasitism. Not biological, but social. Parasites, or people who don't work hard and well, are a central concern of socialism. That's true under capitalism also, but for socialists, the problem is actually much greater. A new twedge, this week's letter, and Book of the Week, and more. Straight out of Creedmore, this is Tidy C.

SPEAKER_02 0:34

I thought they talk about a system where there were no transaction costs. It's an imaginary system. There always are transaction costs.

SPEAKER_01 0:43

When it is costly to transact, institutions matter. And it is costly to transact.

Capitalism Critique Work Or Starve

SPEAKER_00 0:54

Today we're going to talk about something I think most people, whether they're sympathetic to socialist ideas or hostile to them, have never really thought about carefully, and that's the concept of the social parasite in socialist thought. Let me start out by saying that I seem to have caught a summer cold, and so my voice sounds pretty rough, so I apologize for that in advance. To begin with, let's consider the usual critique of capitalism, that wage workers are not really free. You can find it as far back as Saint Paul in 2 Thessalonians 3.10. If a man will not work, he shall not eat. Now, that biblical injunction was often attributed to the critics of capitalism, but it was deployed at first in favor of work discipline by early Protestants especially. Later became associated with the idea of a capitalist work ethic. Now, Karl Marx, in volume one of Capital, chapter six, chapters entitled The Buying and Selling of Labor Power, said, For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free laborers. Free in the double sense, that as a free man he can dispose of his labor power as his own commodity, and that on the other hand he has no other commodity for sale. He is short everything necessary for the realization of his labor power. End quote. Well, what that means is that the worker is now free from feudalism, but he's now enslaved by capitalism, because if you don't work, you don't eat. Well, do socialists really believe that? George Bernard Shaw, in several of his plays, argues for the idea that a man who has no means of earning a livelihood must either steal or starve. In either case, he's a criminal because you can't live on the street, but if you steal, you're put in jail. You may not be able to find a job, and you have no automatic right to a job, which for Shaw was a travesty. Bertrand Russell, in his 1932 essay, In Praise of Idleness. Whoa, that was thunder. Uh there's a storm outside, but maybe I have underestimated the awesome power of socialism. Anyway, Bertrand Russell, in Praise of Idleness in 1932, said, I do not think the fact that these people are allowed to be idle is nearly so harmful as the fact that wage earners overwork or starve. And he goes on to say, modern methods of production have given us the possibility of ease and security for all. We have chosen instead to have overwork for some and starvation for the others. End of quote. Well, we'll come back to Bertrand Russell. Eugene Debs, in a number of his speeches, argues that there's a problem under capitalism because if someone owns your tools, he owns your job. Quoting now, if he owns your job, he's the master of your fate. You are in no sense a free man. You're subject to his interest and to his will. He decides whether you shall work or not. Therefore, he decides whether you shall live or die. And in that humiliating position, anyone who tries to persuade you that you are a free man is guilty of insulting your intelligence. Close quote. So if the worker does not own their own tools, that means they're not free and they have to work or die. Upton Sinclair famously said it, and I think said it well. Private ownership of tools, a basis of freedom when tools are simple, becomes a basis of enslavement when tools are complex. Emma Goldman, in her essay Anarchism, confirmed that if you ask for work and they don't give you work, ask for bread. If they do not give you work or bread, then take the bread. So you have this right to bread, she would claim, under socialism, whether you work or not. Oscar Wilde, in The Soul of Man Under Socialism in 1891, said there are a great many people who having no private property of their own and being always on the brink of sheer starvation are compelled to do the work of beasts of burden, to do work that's quite uncongenial to them, and to which they are forced by the peremptory, unreasonable, degrading tyranny of want. Well, okay, that's the argument then of socialists. To summarize the fact that workers do not own the means of production, they don't own their own jobs, means that they can be given or not given a job at the whim of whoever owns the job, and that is the ownership of the means of production. And that means that there's the problem that you have to work or starve. So

Property Rights And Transaction Costs

SPEAKER_00 5:49

let's take a step back. When economists talk about transaction cost, we mean the cost of defining, monitoring, and enforcing property rights. Under socialism, under classical Marxist socialism, the kind that actually existed Soviet Union, Cuba, Cambodia, North Korea, Venezuela, not the imaginary unicorn kind that exists only in the febrile imagination of college literature professors. Under actual socialism, there's a very specific theory of property rights over labor and ownership of the means of production. And it's this your labor, your time, your effort, your skills, those things are not yours. Under socialism, the state owns the means of production and it owns your labor. Labor is a very important means of production. Now, that's not just an implication, it's explicit. The famous axiom, I want to be careful here, because socialist thinkers have been repeating this for over 170 years, is quoting, from each according to their ability. That's the obligation and responsibility side of the socialist contract. Your ability isn't your property, it's society's asset. Now, once you accept that framing, something follows immediately. If society owns your labor and you withhold it, you have committed a property crime. You have stolen from society if you do not work for society to the full extent of your abilities. So let's go back.

Fourier And The Middleman Parasite

SPEAKER_00 7:15

A lot of people think socialism and Marxism are synonymous, but that's far from true. 1822, Charles Fourier, one of the founding figures of socialist thought, a superstar of socialist philosophy, arrived at a startling conclusion in his treatise on the Domestic Agricultural Association. He said that no or negative functionaries in the economy are not doing productive work. He then says two-thirds of the population are domestic parasites, social parasites, accessory parasites. Two-thirds of the population are not doing real work and they should not get food. So that includes anyone who trades, buys, sells all middlemen, anyone who's not producing something directly. So a big part of the original argument for socialism was to get rid of the middlemen because they're parasites. If those people start doing productive work, there'll be a gigantic explosion in the amount of stuff that's available for us, and that will be plenty. It will be the end of want. Fourier did have an answer. In 1829, he proposed the government should, with respect to, and he said Jews, who he specifically called parasite, compel them to do productive work. So there's a long strain of equating these middlemen and parasites with Jews in socialist thought. And Marx, Karl Marx is full of this kind of reasoning. So Fourier's solution is compulsion. His solution to the monitoring problem is that we must compel everyone to do productive work. And if they don't, they will not eat. Well, we're going to come back to that. I wanted to nail down the theoretical mechanism of transaction cost because it's actually quite elegant once you see it. Under liberalism, the political philosophy of Locke, Smith, Madison, me, your time is your property. You own yourself. Others may disapprove of your choices, they may think you're lazy, think you're frittering away your talents, but the legal system generally leaves you alone to make whatever choices you want with your own labor as long as you're not violating someone else's rights. Karl Marx had this right. The commodification of labor and food means that you need, you have to have money income to avoid starvation. You have to get money or starve. That's different from feudalism. There, the landowner was obliged to provide food, clothing, and shelter to the serfs. In market society, people are free to sell their labor or not, but they're also free to starve, because no one's responsible for their survival. That's the socialist critique. Under socialism, this changes fundamentally. Beatrice and Sidney Webb, the leaders of the Fabian Society in Britain, when they wrote about Soviet communism, what they called a new civilization, praised the Soviet constitution for including mandatory duties required of citizens. They criticized the French and American constitutions for what they called the striking absence of compulsory duties. They described the socialist duty as the duty not to

Slackers Treated As Thieves

SPEAKER_00 10:20

be a parasite. Well, I went and collected over 150 quotes from pretty much every different socialist thinker I could find. It's actually striking. This idea of the parasite or the slacker, someone who not only doesn't work, but doesn't work to the full capacity of their abilities, is a slacker. So Bernard Shaw said, the idler will be treated as the meanest sort of thief under socialism. Proudhon said, the slacker must be pursued as a thief. Trotsky, not one serious socialist, will begin to deny to the labor state the right to lay its hands upon the worker who refuses to execute his labor duty. Edward Bellamy, the one who evades his work, robs everyone. Such a man had better hang himself. Julius Nierrier, who wrote The Basis of African Socialism, said, The other form of modern parasite is the loiterer or idler. William Morris said, We are going to get rid of all non workers. Get rid of? What does that mean actually? Emile Vandervelde said, How many slackers are there who try to disguise their parasitism by taking the look of the intellectual? Nikolai Bukharin, Idlers must vanish. Only useful social workers will remain. Beatrice Webb, any person who neglects contributing according to his ability is held to be a thief and will be dealt with as such. Berner Sombach, he who does not work shall not eat. On this, all socialists are agreed. I have over 150 more examples. Every socialist that I could find is worried about the problem of slackers, idlers, and parasites. There's something rather chilling about this whole getting rid of thing. One way you could get rid of people is to give everyone a reason to work. And that would mean there would be no idlers because everyone would have a reason to work. All actual socialist systems have used the mechanism for getting rid of people who don't work of sending them to prisons or killing them. And that means that you're going to use a combination of ways to get rid of slackers. You're going to kill a whole bunch of them. And in fact, Lenin said one in ten uh parasites should be shot every year. So every year we'll look at the parasites, and one in ten of them should be shot. So we'll get rid of them partly through attrition, but we're also going to get rid of them through terror. And the reason this is okay, I already said, is the Fabian socialists in Britain, Beatrice and Sidney Webb, the socialist duty is the duty not to be a parasite. And a parasite is someone who does not provide to society everything that they possibly can according to their ability, all of their labor employed energetically and in its highest valued use. Anyone who doesn't do that is a parasite and has to be gotten rid of. Under liberalism, my labor is mine. So whatever I choose to do or not do, that's my business. Under socialism, my labor is society's. So whatever I do or don't do, that is society's business. The moment you make the conceptual switch, the parasite concept becomes not just morally loaded, but legally operative. If my labor is society's

Who Decides How Hard You Work

SPEAKER_00 13:40

property, then my withholding it is theft. Thieves don't eat. Full stop. There's the transactions cost punch. Creates a monitoring problem of staggering proportions. How hard should I work? How well? At what? For how long? Those are questions that in a market economy are answered by prices and individual choices, wages, profits, competition. Under socialism, prices are suppressed intentionally. You need some other mechanism to answer those questions. The answer is the party decides. The communist party, and I mean the singular, that's not an accident. There aren't two, there's just the one. Here is what you will do. Here's how long, here's how hard you will work at it. And those who fall short of what the state decides are parasites, idlers, slackers. We will get rid of them. Parasites don't eat because they are thieves. Now that adds a new dimension. Under liberalism, if you're lazy, you may work barely enough just to feed yourself. People may look down on you, but there's no social sanction. Under socialism, your obligation is not just to feed yourself, but to produce everything you are capable of, quoting, according to your ability. So even if you produce more than enough to feed yourself, you can still be punished, because, to make a zero-wing reference, all of your labor are belong to us. Under Marxist theory, there's actually two kinds of exploitation, two kinds of theft. The first is the one everybody knows about. The capitalist exploits the worker by extracting surplus value, profits. The owner of capital then is a parasite on labor. That's the standard Marxist critique that we most often read about. There's a second, much less discussed form of exploitation. The worker who withholds effort. That person is a parasite on society. They're exploiting society. It's the mirror image of the first theft, and it's just as serious, or maybe more, within socialist logic because it is the one that becomes more important under socialism. There are no capitalists. We got rid of them. We killed them. They're gone. We sent them out to be re-educated in the countryside, and we starved them to death. However, we now have a big problem, and it's a transaction cost problem because there are parasites. Under socialism, society owns your labor. So consider two scenarios. Scenario one, I break into a storehouse, I steal two bushels of grain. Obviously a crime. I've taken what belongs to others. The public store of grain is less by two bushels. Scenario two, I sit around. Some. Not much, some. I don't work as hard or as well as I could, so I fail to produce two bushels of grain that I could have produced. That means there's two fewer bushels of grain in the warehouse than there could have been. Now, within socialist logic, this is also a crime, and in fact, it is exactly the same crime. I am stealing from the common stock from not working as hard as I could. So the measured effect is identical. The amount of the grain in the warehouse is two bushels short. Etienne Cabet made this explicit in his System of Fraternity, 1849. The greatest genius on earth, whose work isn't for the general interest, is regarded as a parasite, completely inferior to the least intelligent functionary who is contributing to the common work according to one's ability. Now, from a transaction cost standpoint, this prescription immediately creates a second-order problem. Who decides what I could accomplish, what I could contribute? In a market, the price system aggregates dispersed information about what people value and what they actually contribute. Under socialism, prices are absent or distorted, so you can't use market prices to identify socially useful work at all. How will society decide? The answer that socialism has repeatedly given, different times, different places, and to be fair, it follows logically from socialist premises. The collective decides. What that really means is that the party decides. Even in the best case scenario of democratic socialism, socially useful would really just mean approved by the majority. In any case, what I want as an individual is irrelevant. A real example

Brodsky Trial Unauthorized Poetry

SPEAKER_00 18:02

might help. 1964, the poet Joseph Brodsky, he went on to win the Nobel Prize in Literature in 1987, was put on trial in the Soviet Union. His crime? And this is an actual statute he was violating. The prosecution's case rested on the claim that Brodsky, though he considered himself a poet, had no official credentials or formal literary training, could not legitimately call himself a poet. The exchange between the judge and Brodsky became one of the most famous moments in Soviet legal history. Judge, whose name was Savalieva, Judge Savalieva said, Who recognized you as a poet? Who enrolled you in the ranks of poets? Brodsky said, No one. Who enrolled me in the ranks of humanity? He was sentenced to five years of hard labor. It was later released after 18 months, largely due to international pressure. The trial transcript was smuggled out by a journalist, Frida Vigorova, and circulated widely in Samizdat, in basically just uh unauthorized pirated copies, ultimately contributing to Brodsky's international reputation rather than suppressing it. From a transaction cost standpoint, it reveals exactly how socialist property rights over labor actually function in practice. The state owns your labor. The state therefore decides what you may do with it. Brodsky had made himself a poet without society's permission. He had allocated society's labor, now it's his labor, but it belongs to society, to poetry without society's authorization. He had, in effect, stolen grain from the warehouse. Now, notice the monitoring and enforcement apparatus this requires. You need a system for deciding which professions are socially sanctioned in the first place, and in what quantities. You then need to track who's practicing those professions, whether they have social authorization to do it. You need courts to adjudicate violations, and you need serious punishments that are sufficient to deter the behavior. Brodsky was sentenced to five years of hard labor for stealing his own labor by buying, writing poetry. Not bad poetry, just unauthorized poetry. Tens of thousands were convicted under Soviet anti-parasite laws. In just one republic, the Russian Republic, in just one year, 1961, 20,000 people were convicted and sent into internal exile. Now, one of the most revealing aspects of socialist parasite theory is the breadth of who gets classified as a parasite. Once you accept the property rights premise, that is, society owns your labor, and the premise that each of us has a responsibility for producing all that we're capable of or we're stealing from society, the class of parasites expands almost without limits. And it is politically arbitrary to be able to identify someone, because almost all of us are producing something less or something different from what someone else wants us to do. Parasitism involves what you do and how hard you do it. Since those are hard to measure, since those are defined by government bureaucrats or by politicians who have their own objectives, the ability to withhold your ration card implies you can starve on a whim. So it's not just that if you don't work, you don't eat. So there are levels to this, of course. The most wasteful level for the socialist is financiers who produce nothing but consume more than their share. We all know about those. Leo Huberman in The ABCs of Socialism, 1953, said. Ownership, once functional, is now parasitic. The capitalists as a class are no longer needed. If they were transported to the moon, production need not stop even for a minute. Well, since they produce nothing then, we could transport them to the moon. And of course, by the moon, if you were a socialist, you meant Siberia. Of course, the list was extended quite a bit further beyond just financiers. John Karacher's producers and parasites said the legal profession, insurance, advertising, and a host of other parasitic enterprises cling to the body of the real parasite, capitalism. That is, it is capitalism that creates parasites by allowing people to work on what they want. Lawyers, insurance agents, advertising professionals, all parasites. They will be put to work. Then artists and writers, L.G. Money wrote in 1912, as for the great army of writers, journalists, ministers of religions of all denominations, dancers, philosophers, lecturers, and others who now escape from legitimate labor, there will be no room for them as professionals in the great state. And again, that's Money's work. It's great that his name is Money. Work in the Great State. It's from Essays in Construction, 1912. So maybe the problem is just since I do not actually work in the fields producing grain, I'm just upset at socialism because I'd actually have to provide productive labor. So the this is all self-interest. If you look at it, it's really all self-interest. I'm just afraid of socialism because I'd have to stop making podcasts and I'd have to work. Charles Peggy, socialism will spare human labor, the waste of which is immoral. This saving will be achieved by several methods. Idleness will

When Everyone Becomes A Parasite

SPEAKER_00 23:57

be suppressed. And that's from the socialist city. End of quote. One way we can do is to shoot every tenth person, and that will certainly affect the others. So Lenin in How to Organize Competition said, one out of ten idlers will be shot on the spot. It's not hypothetical. Tens of thousands of slackers and idlers in China were in fact beaten to death, in summary judgment by worker tribunals in the fields and factories in the 1950s and 1960s. They were buried in mass graves by the side of the road with grave marker that said sluggards, not their name. They're just put in piles because it was the opinion of the workers' tribunal that some of the workers were not working as hard as they could. Now, if there's someone that I don't like, I'm probably not going to say I don't like them. We should kill them. What I'm going to say is, they're lazy, they're parasites, they're stealing grain from the collective warehouse, and then we'll kill them. So I get the same effect. George Bernard Shaw, in his letter to Adler in 1927, said, We as socialists have nothing to do with liberty. Our message, like Mussolini's, is one of discipline, of service, of ruthless refusal to acknowledge any natural right. End of quote. So that's George Bernard Shaw. He was the one talking about how it's really a shame that working people have to work or starve. Our message, like Mussolini's, is one of discipline. So many professions are just not going to be allowed, even as hobbies. Now, even if a socialist society approves of a profession, even if it decides that poetry or art of philosophy is socially useful, that doesn't mean just anyone can pursue it. It means the state will allocate some of society's labor to that activity. How much? Well, as Karl Marx put it in The Poverty of Philosophy in 1847, the time of production devoted to different articles will be determined by the degree of their social utility. End of quote. Well, that makes sense. In a capitalist system, we decide what their social utility is by how much people are willing to pay for it. There's some problems with that. There's willingness to pay. Not everybody has the same ability to pay because there are differences in wealth. Prices may not reflect all of the cost and benefits of a particular activity. Maybe we can do better than that. Who is going to decide what social utility is? Well, Karl Marx knew who it was, and it was the guy he saw in the mirror every morning. That's one of the things that's the consistent common denominator for socialists. All socialist theories are pretty confident that come the revolution, they will be in charge. And of course, they're smarter than we are, so that's okay. Richard Lehoutier made the practical implication explicit. There must be many farmers, but not too many writers. And that's from the catechism of the socialist reforms. 1839, very early on, before Marx was really writing. Not too many writers. Even if you're a very good writer, doing work the state considers socially useful, if there's already enough writers, you are a parasite. Partly, though, writing is going to be commodified. We will decide how much writing and of what type is enough. Society's quota has been filled. Stop writing. Report to the minds. Now, that is Brodsky's problem, fully generalized. The state doesn't just decide what kinds of work are permitted, it decides how many of each

Transaction Costs Drive Authoritarian Control

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kind, and that selection is based on service to the state. Every person beyond the quota, or if you want to write about something other than what the state commands, is by definition a parasite and therefore a criminal. Now many people claim that there is a puzzle. Why have socialist systems always end up being authoritarian? There are no exceptions. All socialist systems end up being authoritarian. Well, that's a question. And if it's a question, you know what the answer is. The answer is transaction costs. Society's claim on your labor is a property right that's extraordinarily expensive to define, monitor, and enforce. That's the heart of transaction cost. How hard should you work? The answer is as hard as you are able, from each according to their ability. But ability is private information. I know and only I know how hard and how well I could work. The state, and that means the foreman, who is employed by the state, does not know that. So there's a massive informational asymmetry, exactly the kind of problem that Hayek identified as the central challenge facing any central planner. And the socialist response to this information problem has always been the same. Coercion, often brutal coercion. Lucienne Delaniers stated the plan with admirable directness. These useless workers, socialism will suppress them. It will make them useful. Instead of being parasites, they will become producers. And that is from the beginnings of socialism, 1901. Well gosh, Lucien, how's that going to happen? How are they going to become producers? You can change their job, but the amount that they produce, we're still going to have to make judgments. So suppress, make useful, return to production. That's the enforcement mechanism. Che Guevara, decades later, used language that was almost identical in Against bureaucratism. So the charmingly, he was against bureaucrats because he was pretty sure bureaucrats couldn't do this. I don't know who he thought was going to do it. Uh his answer is the party, but for some reason he thought that the Communist Party would not be bureaucratic. In any case, what Che Guevara said is socialism must take, quoting, drastic measures to eliminate the parasites. Be they the ones who hide in their attitude a deep hostility towards socialist society, or ones who are irredeemably against work. We might note in passing that Guevara never actually worked a day in his life. He just went around either giving speeches or killing people. But still, notice the two categories that Guevara identifies. The first category, people who are hostile to socialist society, that's a political category. It'll be defined politically. Second, people who are irredeemably against work is an economic category. Both of those get the same treatment. Drastic measures. How drastic? Well, drastic enough that they will either be eliminated, as several people have suggested, or you will be broken and forced to work in the way that the state wants. Sylvia Pankhurst connected the whole thing explicitly to the rejection of liberal individualism. We aim, quoting, we aim at the common service. We desire that all should serve the community. The individualist cries, freedom! We answer, thou shalt not exploit, thou shalt not be a parasite. That comes from the Sylvia Pankhurst reader in 1932. Thou shalt not be a parasite. That's the socialist law, stated in the imperative mood. The imperative mood, when backed by state power, means guys with guns beating on you. The transaction cost analysis tells you it's actually unavoidable. If you're going to claim ownership of a person's labor, you must have a mechanism to enforce that claim because they may not use it right. The enforcement of a claim on something as difficult to monitor as human effort and effectiveness necessarily requires an extensive surveillance apparatus, a legal system of anti-parasite laws, courts, labor camps, and at the extreme, executions. One out of ten will be shot. Not because socialist leaders are uniquely evil. They're not, in fact, evil. It's the system that requires this. The logic requires this. The property rights claim that they have staked requires enforcement machinery of this kind. Now, Hayek, in his essay, Why the Worst Get on Top, may have recognized a reason that they are evil, but they need not be. All you have to do is accept the logic of this system and you start doing evil things. Friedrich Engels acknowledged that many people's work would be considered, under socialism, quoting, at best, superfluous. But rather than saying those people are going to be suppressed or compelled or eliminated, he said an amazing thing. He he really was, uh he should have been an advertising executive. He said that under socialism, quoting, these workers would become free to engage in useful labor. That's uh speeches in Elberfeld from the Marx-Angled Collective Works in Volume 4. They'll become free to engage in useful labor. Free! We're not going to take away your job. We're going to liberate you to do something more useful. It's what you really always wanted to do in the first place. You just didn't know it. August Babel picked up the same phrasing, writing that a socialist transformation would mean, quoting, a large army of persons of both sexes is thus set free for productive work. Now, to be fair, he was mostly talking about women that now were prevented from working. And there it is certainly true that at the time these folks were writing, women were very much repressed, were not welcome in the workplace, were not allowed to do any of the things that the shiny, gaudy liberal theory claimed all human beings should be able to do. So they they they actually do have a point, but it didn't mean that women were going to be free to decide what they wanted to work on. They were now free to work as slaves. So it's a remarkable rhetorical jujitsu. The compulsion to give up your current occupation and take up a state-approved one, or in the case of women, to be allowed now to work on a state-approved job, is reframed as liberation. The transaction cost analysis reveals that if you call it suppression or being set free, it makes a big difference. But the economic reality is identical. The state is reallocating labor from uses it considers parasitic to uses it considers socially useful. The mechanism requires identifying who's doing socially useless work, removing them from that work, and directing them to socially useful work. That can't possibly be done by majorities. It has to be done, and it always has been done, by a centralized authority that assumes control over who eats, who dies, and who is sent to

Fascism And Socialism Converge

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prison. Before Benito Mussolini became the world's first fascist dictator, he was a thoroughgoing socialist, not a minor one. He was a leader of the Italian Socialist Party, editor-in-chief of Avanti, the national socialist newspaper in Italy, gave dozens of speeches selling socialism, wrote hundreds of articles on its behalf. Founded a theoretical journal of socialism called Utopia. And as a socialist, he used the parasite rhetoric we've been tracking. He praised the Socialist Party by saying that it told the peasantry the earth is yours and not of the parasites that exploit you. That's from socialist Dalla Lima in 1908. 1923 speech to workers, Mussolini declared, We are the generation of builders craving for the greatness of the nation of tomorrow, which will be a nation of all producers and no parasites. Now, I won't bring this up again. I'm sorry to keep saying it. He meant Jews. He straight up meant Jews, but there's nothing inherent in the logic of socialism that means that all parasites, most parasites, are Jews. It just happened that Mussolini was already moving in a fascist direction. We can compare that directly to Fidel Castro's socialist promise. A country of workers without parasites of any type. And that's from Castro speaks at Uvero Battle Commemoration in 1965. A country of workers without parasites of any type. And Castro did not mean Jews. He just meant people that didn't do what he said. So both fascism and socialism, in their authoritarian forms, make the same property rights claim. The state or the nation, the Volk, the proletariat, the collective, whatever you want to call them, has a claim on individual labor. Both, therefore, fascism and socialism generate the same logical consequence. And that's why to an outsider they look so much alike. And that's why Friedrich Hayek dedicated his book, The Road to Serfdom, in 1944, to socialists of all parties. Both fascism and socialism generate the same logical consequence. Those who withhold their labor from the collective are parasites. Both require the same enforcement mechanism, which is compulsion. The liberal tradition, the tradition of Locke, Smith, Hayek, rests on a specific assignment of property rights. You own yourself, and everything else flows from that. You own your labor, you own the fruits of your labor. Government exists primarily to protect those rights, the rights to the fruits of your own labor. The socialist tradition makes the opposite original property rights assignment. Society, represented by the state, the party, the collective, owns your labor. You have duties, not rights, as the primary category. And the failure to discharge those duties is not merely irresponsible or selfish, it's actual theft. Enforcing a social property right over dispersed privately held information, your labor effort, your capabilities, your choices, requires a surveillance and enforcement apparatus of extraordinary scope and intrusiveness. There's no cheap way to enforce this claim. The monitoring costs are essentially infinite,

Sweden Turns Back To Markets

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which means the enforcement response must be correspondingly extensive and draconian. Now the claim is not that everyone who calls themselves a socialist today endorses forced labor camps or the execution of kulaks. Most don't. There are many versions of socialism that look much more like regulated capitalism with a robust welfare state. People often point to Scandinavian social democracy, for instance, and they don't raise these issues in the same way at all. But that's because those societies are liberal and they are capitalists. They are not socialist. They have a different political system, they're more democratic, but their economic system is thoroughgoing capitalism, as I have often argued, including in my article, How Capitalism Saved Sweden. 1992, 1993, Sweden looked down between its toes at the yawning abyss if they continued with socialism, and they said, nope. They became capitalists. They sold off almost all of their state-owned enterprises, so many parts of Swedish, especially, but all of northern Europe, of their economies, are thoroughgoing capitalism with profound levels of inequality, that those countries are just not socialist. And so saying, well, that's what I want from socialism means you want capitalism. Congratulations. So what I'm claiming is that the classical socialist tradition, the tradition that runs from Fourier and Cabet through Marx, Engels, Lenin, Castro, most literature professors, contains within it a specific theory of property rights over labor that generates, by its own internal logic, the parasite problem. And the parasite problem, once you take it seriously as a matter of enforcement, requires the kind of state power that's just incompatible with liberal freedoms. As Ramsey MacDonald put it, all that socialism and a socialist system of distribution can claim is to want to destroy social parasites. That was in Socialism and Society 1908. If that's all socialism can claim to do, if parasite destruction is the mechanism by which socialists' promises are to be kept, then understanding what parasite destruction actually requires in practice, in transaction cost terms, is not an optional analytical exercise. It's the essential one. So let

Galbraith And Exploitation Reversed

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me close that this first section with a famous quote from John Kenneth Galbreth. I tried to track down exactly where it had first come from, and apparently it's been around for a long time. But John Kenneth Galbraith really did say this in A Life in Our Times, 1981, and it's on page 352. I've heard people say he never actually said it. I tracked it down, he did say it. So here's John Kenneth Galbreth, quoting Under capitalism, man exploits man. Under communism, it's just the opposite. End of quote. Well, I'm not sure that man exploits man under capitalism. There certainly are big differences in power and wealth. And if that's what you mean by exploitation, fair enough. But it's absolutely true that under communism, man exploits man. What happens is that the collective exploits the individual with a kind of ideologically motivated slavery, where you do not own your own labor, you don't own the fruits of your own labor, you make get to make no choices about how your labor is allocated or how you spend your time. If that's not slavery, I don't know what is.

Jokes About Planning And Taste

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Whoa, that sound means it's time for the twedge. The first joke a socialist firebrand orator is standing on a soapbox in the square of the city, shouting about what will happen? Come the revolution. At one point he describes the delights of the socialist table. Comrades, come the revolution. All of you will be eating strawberries and cream for breakfast every day. A mousy looking young man in the fifth row of people murmured something. The firebrand bunched his bushy eyebrows into a scowl and said, What? What did you say? The quiet fellow was mortified to be called out. He hadn't realized he'd said it out loud, but he said, I well, I I said I don't really like strawberries and cream. The socialist firebrand roared with laughter and then shouted back triumphantly, Oh son, that's the beauty of socialism. Come the revolution, everyone will like strawberries and cream. The second joke, and this is from the Soviet Union, actually comes from the 1970s. A manager submits his monthly productivity report to the Central Planning Office. It reads Of our 200 workers, 50 are ill, 30 are on approved leave, 40 are attending mandatory political education sessions, 20s are search 20 of them are searching for supplies that were promised in 1974, and the remaining 60 are monitoring the other 140 to assure there is no slacking. And the main office writes back, Ah, efficiency up 12% from last quarter. Congratulations. Well, that captures the absurdity of Soviet style or just basically socialist style anti-parasite campaigns, which are of course largely a mechanism for more bureaucratic surveillance rather than less idleness. That system, based on eliminating parasites, is going to take more and more people away from productive work and just charge them with monitoring how much work other people are not doing.

Permits And Corporate Bureaucracy

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Well, I got two letters. The first is from DC. And it's about the episode about permissions. I hope that your summer is going well. I loved the episode about permissions. It hits home as I am currently employed at a large telco being merged or bought by a larger telco to form the largest one. This, of course, requires government. Permission. The California Public Utilities takes one year to approve this type of action. They only meet occasionally during a given month. This may put prior permits in jeopardy as they have expiration days. Seeing this from the perspective of a large company with vast resources, as it still feels like Kafka's the castle or the trial. Bureaucracy is hard for a single person and the large company with lots of people who should help make it more efficient, and probably did, but California wanted to make a statement politically. No insider information was released in composing this email. It's public record if you have insomnia. Thank you for your amazing podcast and now the work on liberalism.org. I will keep consuming what you keep creating. Well, thank you, DC. And you really do make the essential point. This kind of permiso logia is difficult for large companies. It's literally impossible for small companies, and so there aren't any. So we we often hear complaints from the left about all these companies are becoming larger. Capitalism is creating larger and larger companies, more concentrated industries. No regulation is doing that. Permiso Lochia is doing that. And so if we get rid of the permits, we can then have smaller, more nimble companies that don't have to borrow enough to be able to have zero cash flow for four years, which is the current situation. It takes you that long to start getting to the point where some bureaucrat has decided, well, all right, I will sign this piece of paper. I had it a minute ago. I'll have to find it.

Dumping Claims And Free Trade

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Letter two from B. Professor Munger, I don't recall a discussion about Adam Smith's views on subversive trade practices. For example, countries are sometimes accused of dumping in order to capture a market and drive out competitors. This may not fall under the umbrella of national security interests, but I think it can affect trade and national prosperity. Does Smith express views on this type of issue relative to free trade? B. Well, thanks, B. Um, this was not seen as so much of a problem during Smith's time. It would now be called dumping. The most common accusation of dumping is industries like steel, where the there's a difference between the average cost and the marginal cost of production. Um I worked at the Federal Trade Commission and I've kept up with this some sense. The usual definition of dumping is when a country sells below its own cost in a foreign country in order to try to increase its market share. Now, you can say that a lot of American companies have been doing that. I think that Uber has still not made a profit, or if it has, it's only within the last couple of years. So, in a sense, for at least a decade, Uber was selling below its cost in order to try to increase market share. It is a little bit different with steel. That is a mature industry. Um, but remember, that definition of dumping is when a country is selling below its own cost. The usual definition of dumping that's used politically in the United States is when another country is selling its products below my cost in the United States. That's really quite different. That's just competition. And so Smith does talk about that, that the very idea of protection is usually to protect a lazy, inefficient, basically worthless domestic industry against having to change its practices. And it's much easier to do that with tariffs than it is by trying to get your act together. So I don't think there were many instances of actual dumping, although allegations of dumping are common. You are right that Smith ignored the possibility of strategic dumping, and it is certainly possible. As you rightly mentioned, this could be a question of national security. But when it comes to domestic economics, it's very difficult to imagine that a firm would be willing to accept long-term losses unless this is a way of changing its market share. And like I said, many countries do companies do this domestically because you try to get your market share established. By that standard, Uber was dumping for at least 10 years. But uh, thank you for the question. It was something I had left out for the discussion of Smith. And you're absolutely right that there is a potential problem for national security, but I think the our discussion of it should be relegated to that arena. The book of the week is Lennon's What Is

Lenin Reading And Final Warning

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to Be Done? Burning Questions of Our Moment, 1901. Uh, my version is from International Publishers. It's a reprint from 2020. Uh, but the the title of the book is What Is to Be Done? And I strongly recommend it. I don't think most people understand what socialism actually entails, and it is useful to understand what Lenin thought correctly socialism would require, because this is basically a blueprint for what happened, the incredible long-term destruction of human rights and human lives that were required to implement socialism. So everybody reads Mein Kampf and they say how bad the Nazis were, and they were, there's no question. Hitler told the world what he was going to do, and then he tried to do it. But Lenin did the same thing. Socialists did the same thing. What I've tried to emphasize in this episode is that socialists have never pretended that they care about your rights. Socialists have never pretended that you, under a socialist system, would own your own labor. We need to face up to the terrifying force and oppression that are required to achieve the socialist utopia. And it's important to recognize that at its base, it is a problem of transaction cost.