I’ve been writing the last year or two about tariffs, transaction taxes, tolls and tonlieux as just and fitting ways – and, indeed, economically efficient ways, Pareto optimal ways, ways that should gladden the hearts of Austrians and Chicago Scholars – for a sovereign to farm revenue from the domains under his sway. Implicit in all that talk of justice, fitness, optimality, and so forth, is the presupposition that the sovereign has the right to collect such revenues – that, i.e., it is not wrong per se for him to collect them, but rather, possibly, quite correct and proper, and true to the ontological and moral facts of the matter.
Notice then that collections of such transaction taxes are effected by free and uncoerced exchanges by his customers of something they possess for something the sovereign possesses. To put it bluntly, such revenues are collected from sales by the sovereign of something he owns: the control over who shall participate his realms, and on what terms. It is that ownership which confers upon the sovereign the rights of ownership, such as the right to transfer title, to sell, let, give, bequeath, rent, permit, tax – and by extension to exert any sort of control, rule, command, etc.
[I stumbled the other day on a recent post by the invaluable Free Northerner on the topic of owned markets, that lays out this notion much more clearly and succinctly than I have ever done. I recommend it. His key argument: when markets are not explicitly owned and so optimally farmed for revenues, a commons ensues from the misleadings of the resulting whacked price signals, which is then inevitably exploited to death. More on that in a moment.]
The sovereign does not then simply reign. He owns. If he did not own, then his reign would be unjust, and men would adjudge it illegitimate; for, his reign in that event would not commensurate with the ontological facts, and as ill fit to reality would therefore be immoral, unjust.
Is there an orderly market? Then is it constrained by rules. And then is there some sovereign who constrains it – who exerts upon it the control of an owner, to enforce those rules. Orderly markets are always owned and ruled, whether ostensibly or not. And rule of a market is ipso facto rule over the spatial and temporal domain or Receptacle of its motions, be it a transnational empire or a coffee shop. To reign over a market is to reign over some bit of material reality as property, and to control it authoritatively.
That reign derives from ownership is another of those eternal verities of civilized order: as there is always an oligarchy, always an established religion, always taboo, always some limit on permissible speech, and so forth, so likewise the sovereign always owns his domains, and his powers of rule are powers of ownership. We delude ourselves, to think it ever otherwise. We now in the West delude ourselves that no one owns our nations. Even our sovereigns delude themselves in this fashion. So all the discourse of our politics is hobbled, noisy, inapt, and incapable of any completely rational account of political affairs that is adequate to what is really happening. Because furthermore the connection between sovereignty and ownership is obscured by the terms of our politics, so that no one can see how any government might possibly be ontologically correct, or therefore morally justified in its rule, and as a consequence truly and duly authoritative, so that it obliges their duteous fealty, all the men of the West suspect that their governments are illegitimate, and feel resentment thereat, feel alienation and indeed some measure of hatred. Men love their nations, some of them; a few love their leaders; but no man today loves his government. So while they may serve their nation or follow a leader, they seek for government only to maximize what they can get from it, as cheaply as possible.
The sovereign reigns only because he owns his domains; reign just is a right of ownership. So long as he is sovereign, so long has he as their owner the right to farm them for revenues. And so he shall, ever; taxes are as certain as death (that’s one way we can tell that domains are always owned). The only question is whether they be collected well, or ill.
The farmer is right to farm. That is not in question. What is in question is whether his methods are good. How prosperous then is his farm? By their fruits shall ye know them, etc.
[E.g.: Taxes on property or incomes? Bad idea; like cutting down your orchards to sell for cordwood.]
What good does the sovereign sell in exchange for the various sorts of transaction levies he collects? He sells the right to participate for a time in the market that he owns and maintains: to enjoy its protections, benefits, liberties, obligations, rules, risks, and so forth; and to benefit from the quality of its other participants, their wealth, honesty, reasonableness, reliability, intelligence, enterprise, ingenuity, number (large markets are nicer than small, usually) and so forth. Transaction taxes on all his subjects and tonlieux levied on persons entering or remaining in his domains, tolls on their vehicles and tariffs on their goods all purchase their enjoyment of the protections of his laws, of his police and magistrates, and of his men at arms.
Where levies on these goods are set too low, more business will be transacted in a domain than is ontologically warranted. It will be busier than it ought to be. Its sabbath rest and rituals will be neglected, its jubilees forgotten, its commensal feasts impoverished, its communal affections and loyalties withered, and – eventually – its great and purely public works derelict and fallen into desuetude. In the limit, all its social bounds and bonds will be vitiated, and the regularities they subvene disrupted: its borders, language and culture all porous, indefinite, and finally altogether ruined.
There are two sorts of agents whom such distortions of market signals will mislead: subjects of the realm who are permanent – who, i.e., owe a debt of fealty to the sovereign, extending in extremis to the expenditure of their very lives in defense of the realm – and those who are temporary – immigrants, tourists, merchants, and so forth, who are not obliged to the defense of the realm with their bodies.
Take the former, permanent sort of subject. Call him John. Assuming he and his are fed, sheltered, clothed, and so forth, how shall John dispose of the marginal bit of his wealth? He may consume it, donate it to charity, give it to some other, or invest it. Assume again that, as he rationally should, John’s sovereign taxes consumption but not those other sorts of transactions. If he sets consumption taxes to a rate lower than is optimal, his subject John will be suboptimally inclined more to consume that marginal bit of his substance, rather than to invest, give, or donate it – or for that matter to do nothing at all with it for a time, but rather simply to rest, to read or to pray, to play with his children or to monitor the progress of the clouds. And this is just what we see happening with the consumer society of the West. The cultural assets that make the West a good place to live and do business are become a commons; we devour our seed corn; we neglect and forget our patrimony.
In that neglect and amnesia, and the social devolution and derangement they produce, are the pricks that traditionalist critics of capitalism feel as defects inherent in it, and essential. They are indeed defects, and the symptoms of defects. But they are neither inherent nor essential. Rather, they are the natural result of the mistaken political creation of a commons. Consumption has been subsidized, and investment, charity, and stillness penalized. So we eat, and eat, and eat.
Take now the latter, temporary sort of subject. Call him Juan. If the rents on presence in the realm of his person and his assets are set suboptimally low, he will be suboptimally inclined to remain in it rather than decamp to some other when he properly ought. At the going rate, Juan will reap more from his presence and commerce there than he properly should. He would be foolish not to take advantage of such a steal. And this is just what we see happening with immigration to the West. Again, the cultural assets of the West are being devoured.
The geese and hens are being slaughtered, the milk cows butchered, the orchards and forests laid waste, the soil depleted, the aquifers emptied, the cities ruined, the children killed or perverted, the young men and women rendered infertile, the aged mocked, the cathedrals profaned, the treasure houses evacuated, the coin of the realm debased, the truth denied, the right derided, the good hated.
It can’t go on forever, thanks to death – thanks be to God for death. So, it won’t. Sooner or later, the King will Return, and with him his second body, the people. Let it be soon.
None of the foregoing should be taken to suggest that markets are not like language, society and culture the organic and natural, unforced products of communities. They are. Markets are not instituted from on high, ex machina deus, but rather only formalized, recognized ex post facto. They arise first from the quotidian exchanges in which all men must perforce engage in order to live together. Viz., the old American Stock Exchange, which was first called the Curb Exchange because it started on the sidewalk of Wall Street, where traders loitered to smoke or gossip, and then as traders are wont to do, to trade with each other informally (and cheaply); eventually its business got so substantial that it had to be formalized, and housed, and owned.
Exchange per se, whether formalized or not, presupposes property. I can’t trade you my hammer if I don’t have that hammer, or a way to get it. And property relations too are ontological before they are socially formalized. If I possess a hammer when we first meet, we both will take it as evident prima facie that the hammer is mine. Later we may formally agree that my title to the hammer is legitimate.
But then too the property relations implicit in sovereignty likewise arise organically with society. Like property, language, exchange, families, and so on, sovereignty arrives with humanity as an aspect of a package deal, that cannot be brokered without sundry. There is always a sovereign. And true sovereignty is not imposed upon a society from without and against its will, but is rather always properly an unforced social project: a sovereign’s ownership subsists in the free iterated agreement of his men that his reign is good, and proper, and just, so that they ought all to recognize it and pledge him their fealty, and be his men, rather than some other’s.