Economic Bullshit

Government and Land Rights

Centralized Government

Decentralized Government

Free Land



No Free Land





In the past, the subject of economics was called “political economy”; nowadays it is called simply “economics.”  Why the change?  Let me explain.  There are alternative economic arrangements possible as to who owns what. Specifically, we can have alternative laws about land rights.  Compare, for example, how indigenous native Americans dealt with land with the British colonial policy in America.  American natives did not have a concept of land ownership; whereas the British did.  Which system prevails is a political matter; hence “political economy.”

Since the 19th century,  the economic system which has predominated is that of capitalism.  And books with the title “Economics” are really about the workings of capitalism.  Now, what is capitalism?

Max Weber, in the 22nd chapter: “The Meaning and Presuppositions of Modern Capitalism” of General Economic History (Wirtschaftsgeschichte, 1923), translated by Frank H. Knight, 1927, lists six necessary conditions for modern or “rational” capitalism. What interests me, and on which I want to focus attention, is the 5th necessary condition, which is:

“The fifth feature is free labor. Persons must be present who are not only legally in the position, but are also economically compelled, to sell their labor on the market without restriction. It is in contradiction to the essence of capitalism, and the development of capitalism is impossible, if such a propertyless stratum is absent, a class compelled to sell its labor services to live; and it is likewise impossible if only unfree labor is at hand. Rational capitalistic calculation is possible only on the basis of free labor; only where in consequence of the existence of workers who in the formal sense voluntarily, but actually under the compulsion of the whip of hunger, offer themselves, the costs of products may be unambiguously determined by agreement in advance.”

What people is he talking about? He is talking about people who do not possess property, which really means the people who have no free access to land on which they can have a home, have a garden, have some animals: in short, on which they can subsist. They are people who have no access to free subsistence land. Since such people tend to aggregate in cities, they are called proletarians; George Orwell in 1984 calls them “proles.”

It is ironic or euphemistic to call them “free laborers.” They are free relative to the law in not being slaves or serfs. But, as Weber notes, they are compelled to work to avoid starvation. Marx, I think, is more accurate in calling them “wage-slaves.”

See my articles: “Land and Liberty”

Milton Friedman’s Hidden Anarchism in Capitalism and Freedom