The following is a review of Isabel Paterson’s The God of the Machine, a 1943 book arguing for free market capitalism. I wrote this for a college course called Modern Political Thought:
The year was 1943. Hitler’s Germany was in the midst of all-out war with Stalin’s Russia and Franklin Roosevelt’s United States. Isabel Paterson, a Canadian-American author, published The God of the Machine, which has become one of the more influential libertarian works of the twentieth century. Paterson was a radical individualist. Hitler and Stalin were avowed collectivists, and the well-known human suffering in Russia and Germany during their reigns was too great to be ignored. Roosevelt’s New Deal represented by far the greatest economic intervention in American history. The tendencies of world powers toward collectivism were Paterson’s main focuses, but societal attitudes also concerned her. Many believed that the war economy was healthy, and some even believed that Germany and Russia had gotten it right, increasing their powers by collectivization. John Maynard Keynes’ interventionism was emerging as the new textbook standard for economic theory. Radical sloganeers were advancing such ideas as “property is theft” and “capitalism means war.” Paterson addressed all of these developments. Her book is an overview of the logic and history behind her answer to the great question that still stands before the political actor today: which interest should be the focus of our political attention, society’s or the individual’s?
If not for its analyses of ancient, modern, and contemporary histories, The God of the Machine may have been criticized as a knee-jerk reactionary critique of world leaders’ current collectivist policies; Friedrich Hayek’s The Road to Serfdom was widely brushed aside by the political establishment as reactionary. While the Nobel Laureate’s criticism of Keynesian economic theory was much more influential, Paterson published hers earlier, and she conveys the same message, that government cannot spend an economy back to health.
The individualist political philosophy was first described by John Locke, and there are clear similarities between Locke’s philosophy and Paterson’s. Obviously both are individualists. Both believe that government exists to protect the natural rights of life, liberty and property, and that those rights are gifts to man from God. With respect to property, there are differences between the two thinkers. For Locke, ownership of objects in nature is initiated when people mix their labor with those objects. Paterson, contrarily, claims that ownership exists because of the physical laws of space and time. She explains this in a matter-of-fact manner, stating “two bodies cannot occupy the same space at the same time” (180). Elaborating upon this obvious statement, which at first sight appears irrelevant to the matter at hand, she points out that no one would farm if his land could be used–without restraint–by anyone who stumbled upon it, nor would any family build a dwelling, if every man were permitted to come in and go out of it as he pleased; the man farms and builds for his own private purposes (180).
David Hume’s legitimate criticism of social contract theory was precisely that it was a theory. It was based on thought experimentation, and had no historical evidence. Locke was a social contract theorist, and Paterson accepts his theory, but she is not a social contract theorist; she is a social contract historian. She makes little reference to an imaginary social contract, as Locke did, because, unlike Locke, she can point to a historical social contract, the United States Constitution.
The modern liberal, socialist, utilitarian, and utopian thinkers came after John Locke. The father of classical liberalism was long dead before any opportunity to rebuff their arguments presented itself. In The God of the Machine, Paterson plucks Locke’s intellectual sword from the grave and carries it into battle against the likes of Keynes, Jeremy Bentham, John Stuart Mill, Karl Marx and Pierre-Joseph Proudhon.
Before that battle can be understood, however, it is necessary to explore Paterson’s social philosophy. Paterson uses a metaphor extensively throughout the book, comparing society to an electrical circuit. She perceives individual free will as the “dynamo” in society; in the metaphor, free association and exchange is the “electricity” of the circuit. She argues that all progress comes from individual action. Only individuals can think–groups cannot–and “in human affairs, all that endures is what men think” (18). Paterson’s high potential energy circuit is closed and circulating maximum energy in a free enterprise system, when men are left to think and act however they wish. It is static under a totalitarian system, when nearly every action must be commanded or permitted (78). Government intervention into the market is represented by a “leak” in the otherwise complete high potential energy circuit. A free enterprise society, then, will gain more and more prosperity and power, while a totalitarian society will tend to lose both. The society in which government is most limited will be the most powerful society, in production and in war (61). Societies that are more powerful and prosperous become that way because they devise political systems that allow the greatest freedom of human action (13). Their circuits of energy are least broken.
Paterson borrows heavily from Herbert Spencer’s ideas. She replaces Spencer’s “social organism” with her “high potential energy circuit,” and does so with favorable results. Spencer laboriously pursues metaphors between government types and various biological organisms, flying over the heads of readers possessing even above average biological understanding. Paterson clarifies Spencer’s message, by using a metaphor the average person can understand, a simple electrical circuit, and she simplifies his message by condensing it.
Paterson draws her “Society of Contract” and “Society of Status” from Spencer verbatim. The society of contract recognizes the divinely given freedom and responsibility of each individual. In the society of contract, “society consists of individuals in voluntary association. The rights of any person are limited only by the equal rights of another person” (41). The society status, on the other hand, institutes privilege. In Paterson’s mind, instituting a privileged status for anyone in society will lead to a class division between rulers and subjects. She believes the society of status works against nature. “The logic of status,” she says, “ignores physical fact. The vital functions of a living creature do not wait upon permission; and unless a person is already able to act of his own motion, he cannot obey a command” (42). Paterson says that her ideal societal relationships are best exemplified in what is called today’s middle class, which is not a class at all, but a classless society of contract (49).
Paterson bolsters her argument with the historical example of ancient Roman civilization. She claims that Rome failed because it was a society of status, and the bureaucracy, the privileged class, became too big (and I am unqualified to argue this point with her). Too much energy was diverted from production into the bureaucracy, so that almost no energy was making it all the way around the circuit. When the productive class could no longer support the bureaucracy, the bureaucracy came down on the productive class and attempted a planned economy. Prices were fixed and the currency was debased (39). Roman civilization was torn apart. Paterson writes, “Men who had formerly been productive escaped to the woods and mountains as outlaws, because they must starve if they went on working” (40).
Paterson says that the founding of the United States was the first and only time a society of contract was ever attempted. The famous principle of the Declaration of Independence, that all men are endowed by their Creator with the inalienable right to life, had never previously been used as a basis of political structure (41). The United States was an experiment in liberty. Paterson points out that in the United States, for the first time, freedom was recognized as an indivisible whole; to speak of various “freedoms” was to revert to European terminology (68). The proof of the society of contract’s worth was the unprecedented power and prosperity of the United States. Paterson derides European social philosophy as “mechanistic,” saying that it forgets that each individual naturally has freedom and responsibility, and it essentially reduces people to automatons. She blames this on the arrogance of “academic planners” and the lust for power of self-described humanitarians. (145-147)
Paterson’s objection to “academic planners” returns us to the aforementioned intellectual battle between Paterson and thinkers like Keynes, Bentham, Mill, Marx, and Proudhon. She says that John Stuart Mill, under the banner of liberty, in fact sacrificed it to society, saying that it was only justifiable insofar as it “served the collective good.” “Then,” writes Paterson, “if a plausible argument can be put forward that it does not–and such an argument will seem plausible because there is no collective good–obviously slavery must be right” (150).
Paterson views Bentham in much the same light, as another prominent philosopher who sold out liberty to the collective good. Bentham is famous for attempting to devise a political system according to the principle of “the greatest good for the greatest number of people.” Paterson says that this “is a vicious phrase; for there is no unit of good which by addition or multiplication can make up a sum of good to be divided by the number of persons. Jeremy Bentham, having adopted the phrase, spent the rest of his life trying to extract some meaning from his own words. He meandered into almost incredible imbecilities, without ever perceiving why they couldn’t mean anything” (90).
Paterson calls Karl Marx a fool for thinking his utopian idea was an accurate prediction of the future (155). She says Marx was a “parasitic pedant, shiftless and dishonest, he wanted to put in a claim on ‘society’ solely as a consumer” (96). His theory of class war, she says, is “utter nonsense.” Elaborating, she says, “it is physically impossible for ‘labor’ and ‘capital’ to engage in war on each other. Capital is property; labor is men” (97). She also criticizes Marx’s dialectical materialism, claiming that it “reduces verbal expression to literal nonsense” (96). Paterson compares the phrase “dictatorship of the proletariat” to the phrase “roundness of a triangle” (96).
Keynes famously prescribed increasing government employment as a remedy for recessions. Because recessions come with unemployment and slumping consumer demand, the theory goes that government can augment demand and employment by hiring more people, who will be consumers, multiplying demand. In criticizing Keynes, Paterson employs reductio ad absurdum. She brings up the example of paying a man to stand on the beach and throw pebbles into the ocean, arguing, “it would be just the same as if he were in a ‘government job,’ or on the dole; the producers have to supply his subsistence with no return, thus preventing the normal increase of jobs” (192).
Paterson says that Proudhon is responsible for “perhaps the most senseless phrase ever coined even by a collectivist” (179). She is referring to Proudhon’s famous slogan, “property is theft.” Clearly this statement is non-sensical, because theft presupposes property (179). The slogan follows in the footsteps of Jean-Jacques Rousseau, who may well have agreed with its spirit, if not its words. Both Rousseau and Proudhon saw property as an unnatural institution, and the source of inequality and unfairness. Paterson contends otherwise, asserting that unfairness and inequality are unavoidable in any system, and that sacrificing property rights for the sake of fairness is foolish (200). She explains, “The incidental hazard of a free society, which is that of nature, that some individuals may be temporarily unable to command a livelihood, is the permanent condition of every man living in a collective society. In giving up freedom, the individual gets nothing in return, and gives up every chance or hope of ever getting anything” (200).
Paterson criticizes collectivists by analyzing their language and showing its errors. She frequently uses “nonsense” as a descriptor of their rhetoric. There is a tinge of hypocrisy in her critique, because she does not hold herself to the same exacting standards. Proudhon’s “property is theft” is “senseless” to Paterson, but Paterson herself, in no uncertain terms, asserts that “profit is production,” which is evidently “senseless” to anyone with an understanding of economics (221).
Even accepting Paterson’s political principles and her criticisms of the collectivists, there remains a very important question: What is the alternative? What political system does Paterson suggest? Her ideal society is the “the private property, free enterprise society of contract,” but in The God of the Machine, the political apparatus responsible for protecting property and enforcing contracts is difficult to pin down. The absence of a comprehensive, alternative political system may be the most prominent weakness of her argument. Paterson thinks the very idea of political “leadership” is a threat to civilization, because every free man must lead his own affairs (80). She echoes classical liberals in saying that, ideally, government is a necessary evil. Paterson explains, “since human beings will sometimes lie, shirk, break promises, fail to improve their faculties, act imprudently, seize by violence the goods of others, and even kill one another in anger or greed, government might be defined as the police organization” (69). Her ideal system seems to be liberty with a police man, a system that completes her high potential energy circuit for the machine of society, maximizing the creative use of human energy. It requires equal protection of the laws, with privileged status for no “type” of person, be they impoverished, wealthy, numerous, or within government. Paterson never even posits a method of determining who will make up the “police organization” that is government.
Some aspects of Paterson’s political system are clear. She dislikes passports, or any other national identification (45). She thinks “democracy inevitably lapses into tyranny” (16). She favors a metal currency, saying the economist who advocates fiat money is “below the mental level of savages” because he has “forgotten how to apply number” (202). She rejects compulsory public education as “the complete model of the totalitarian state” (258). She also rejects licensing and regulation, which are impediments to free association (50). However, Paterson’s political structure remains enigmatic. As long as every individual is treated equally by the law, their natural rights are protected, and contracts are enforced, it does not concern her who governs, or how they are chosen.
Paterson, Isabel (1943). The God of the Machine. New Brunswick, NJ: Transaction Publishers. ISBN: 1560006668
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