Isabel Paterson’s God

God of the Machine

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

Letter to the editor of the Daily Beacon, 02.05.10

My following letter appeared in the Daily Beacon, the University of Tennessee’s student newspaper, on February 5th:

Sam Smith’s Feb. 1 column was written with the journalistic integrity of a White House spokesperson.

Of President Obama’s unprecedented social reforms, he says that “it’s clear the policies being proposed would greatly benefit the American people.” This clarity is imaginary. The real lack of clarity in legislation today is a government failure, not to mention a broken campaign promise. If asked what exactly is being proposed in Washington, Smith would not know. Nor would anyone else. I suspect that general benefits to the people never require 2,000 pages of statutory language. While the reforms being proposed by Obama’s administration may arguably benefit some, it is a mistake to say that they would benefit the people in general. A law enforced always injures someone.

Smith also called Supreme Court Justice Samuel Alito an “idiot” for mouthing the words “not true” and then challenged Alito to explain this. Just in case Judge Alito forgets to read Smith’s column, I will explain for him. Obama said that because of the Citizens United decision, American elections could be “bankrolled by foreign entities.” This is, as Alito correctly mouthed, not true. The opinion contains language specifically preventing this from happening. Obama was lying. If Alito had any chutzpah (which Smith incorrectly spelled hootspa), he would have channeled Joe Wilson and yelled, “NOT TRUE!”

Smith opines that the Republicans are “no longer a ‘serious’ opposition party,” with no serious ideas and no serious leaders. Republican leadership is serious to the extent that it is truly Republican—it is not. Serious Republican ideas do exist, even though the party’s official leadership does not acknowledge them. That human existence involves some degree of suffering that cannot be legislated away is an idea as serious as it is true, but it makes the political tinkerers in Washington seem irrelevant, so they selfishly refuse to give credence to it.

Alex Winston

Senior in political science

Letter to the editor of the Daily Beacon, 11.09.09

I am not sure if this letter ever appeared in the U. of Tennessee student newspaper.  If it did, I missed it.

I am writing in response to Amien Essif’s November 9 column, “Media miss drama of demonstration”.  In it, he distinguishes the political environments of Europe from ours in the United States, and his distinction deserves further exploration.

Essif laments the quiet politics of U.S. citizens, and wishes there were frequent raucous protests.  In Europe, crowds of people partake in what he calls “real action.”  Going to work, minding your own business, and expecting the same of others is the American political tradition, but apparently these activities do not qualify as “real action.”

Then again, Americans have never walked en masse to the enlightened despot’s palace to request food, or travelled to the democratic tyrant’s outpost to request medical attention.  Even before the United States ratified a constitution to prevent those European follies, their citizens had begun a very different tradition.  That tradition began every time a group of colonists stepped off of a boat and into a vast wilderness, finding no postal roads, no gendarmerie, and certainly no royal granary.

In his journal, William Bradford, leader of the religious separatists that founded Plymouth colony, wrote that within a few months of landfall, half his company was dead.  Back in the Old World, the key to survival was “real action,” but rowdy demonstrations proved futile in the colony.  The harsh winter of Massachusetts Bay heeds neither protest nor prayer.

How did colonists survive?  They took the unreal action of providing for themselves, and in so doing began the American tradition of personal responsibility.  This tradition has endured through countless authoritarian regimes in Europe, all of which began with moral intentions for the greater good and “real action.”

Essif complains about “the uniquely American relationship to government, a strange concoction of cowardice and contempt,” and believes that “in Europe, the government is afraid of the people, while in the United States, the people are afraid of the government.”  This begs the question: what have the European governments done that makes them so fearful of their people?

The answer is that European governments have promised their citizens an end to fear, and an end to want, and their citizens believed them.  A digressive lesson for citizens and single women: if a man ever promises to bring an end to your fears and wants, you believe him at the risk that he will thereafter control you.  No government can deliver on those promises, and those that try not only exceed their true purpose (to defend natural rights) but act against it, by becoming instruments of plunder.

When government pursues its true purpose, the political environment is very calm.  Essif sees the absence of massive demonstrations as a negative; on the contrary, it is a sign that society is working well.  As Frederic Bastiat points out, “No one would have any argument with government, provided that his person was respected, his labor was free, and the fruits of his labor were protected against all unjust attack.”

Our government has stepped outside of the boundaries of its purpose, but it has not been doing this as long or as extensively as its European counterparts, and the effects are not yet as visible.  While Americans were running their own lives and expecting the same of others, their leaders in Washington–perhaps envying European governmental power–were patterning their legislation on the unwisely set examples of Europe, and then destroying the constitution accordingly.  After more than a century of this insidious legal process, the American political stage is finally set for some “real action.”

Europeans demonstrate to their governments because their governments run their lives, and in all likelihood this will soon be true for us, and then Thomas Paine’s words will apply to America for the first time since before he penned them: “The enormous expense of government has provoked men to think, by making them feel.”

Sincerely,

Letter to the editor, 10.27.09

My following letter to the Daily Beacon, the U. of Tennessee’s student newspaper, appeared on October 27, 2009.

For an exemplary misunderstanding of economics, freedom, and human action, refer to Amien Essif’s October 19 column, “Resisting self-interest an act of freedom”.

 In order to understand the human world, we must first recognize that each and every person is responsible for his/her own actions.  External authorities can restrict individual actions, but cannot force individuals to act.  You picked up a newspaper today and began reading.  You are reading out of your own volition.  No government, no religion, no community, no party, no corporation, no family, no philosophy department, nor any other authority outside of yourself can force you to read this letter.  

 Human freedom is a fact that can only be escaped in the imagination, and Essif’s column is an escapist’s trip down the rabbit-hole.  He who will publicly complain about the restrictiveness of capitalism’s conveniences has strayed far from reality.

 Essif admonishes “private institutions whose first interest is making money–and I’m not talking about people.”  If he is not talking about people, he imagines the animate in the inanimate.  His column, however intriguing, becomes fictional when he asserts that corporations–and not the people within them–have any interests at all.  No corporation has ever had any interest that was not in fact a human interest.  Pick any corporation, and remove all of its human interests; you will then find it has no interests whatsoever.

 Essif says that “Nabisco, acting individually, can practically force me to buy a package of crackers.”  Forgetting the absurdity of this statement, let us examine reality.  What have the generally good, honest, hard-working people of the Nabisco corporation done?  They have fed the hungry, and they have done so by acting in their own interests.  Essif’s purchase of crackers, far from restricting his freedom, is evidence that his freedom is relatively unhindered by false authorities.

 The false authority Essif worships is the community, an entity incapable of thought or action.  So, predictably, all of his faulty logic culminates in the exaltation of communal living.  Communal life is simpler in the sense that it is less complex, but it is harder in the sense that it requires much more work.  To spend five minutes of labor on a pack of crackers would be impossible for a practicing communist, whose mere sustenance hangs often in the balance.  Essif should be free to go forth and live as he pleases, on a commune, but neither he nor anyone else should ever have the authority to force the restrictions of communal living on those of us who understand freedom and cherish it.

Respectfully,

Alex Winston

Junior in political science

Debunking the “beauty of the two-party system” myth

Republicrat beast
“Government is a beast” – Thomas Paine

I copy the following from a conversation I had with a Democratic friend, because I think his is one of the most common arguments in favor of the status quo, and I think it is faulty.   My friend said,

“The compromise of Democracy or Republicanism or whatever you want to call it (I think you’re splitting hairs – nobody is advocating mob rule) is what makes our country great… the constant push-pull of left and right that always eventually ends up in the middle.”

My response was this:

Is it great to bomb Pakistan?  Is it great to invade Iraq?   Is it great to detain people without evidence?  Is it great to start wars and support the pre-emptive first strike doctrine?  Is it great that the government can listen to your phone calls, read your emails, etc.?  Is it great to condone torture?  Is it great to imprison non-violent drug users?  Is it great to reward failed business practices?  Is it great to call dissenters terrorists?  Is it great that both parties support all of these measures?  When policies like these have become your cherished middle ground, is the push-pull of left and right really so great?  I think justice is great.  Many have died willingly for it, and i think they were all great.  Supporting moderation in the pursuit of justice is the mark of a person who is not great.”

There is nothing beautiful about two parties whose petty quarrells never fail to bring more government, more police, more imperialism, and less freedom.

The Second Amendment’s wisdom

Weapons, in the hands of a free people, are a general danger to none but tyrants and criminals. The leader who would ban private ownership of arms considers the citizens enemies, and himself above the law. To attempt such a measure without properly amending the sacred contract upon which our government is founded, is a gross denial of justice. It is to assert that there are no laws, but only rulers.

AIG spells nationalization of entire insurance industry

A I Jeez

The Wall Street Journal reports that since receiving government aid, insurance giant AIG has begun greatly underbidding its competitors in the insurance industry.  Fed Chair Ben Bernanke acknowledges this practice, and believes it is necessary for AIG to do this, in order to gain enough marketshare to become profitable.

With billions of government handouts, AIG is able to offer peerless premiums.  In a free market, offering such low premiums would be corporate suicide.  But AIG is not a free market participant.  It has government backing.  Bernanke and Treasury Secretary Timothy Geithner have, on numerous occasions, voiced their intent to do whatever is necessary to keep AIG from folding. In this context, risks that would normally bankrupt the company do not restrict its behavior, because its liquidity flows from a seemingly bottomless barrel, the purse of the citizenry.  Losses from these risks will continue to be subsidized, and those subsidies will encourage more risks, and bring on more losses.

Other insurance companies cannot compete with a company that has unlimited liquidity.  This leaves their executives with a dilemma: they can keep their premiums high and non-competitive, and lose all of their customers; or they can lower their rates to meet AIG’s, keep their marketshare, and become illiquid when they are forced to pay out to misfortunate customers.  Both of these options will end in bankruptcy.

When AIG’s competitors are nearing bankruptcy, one of a few results may play out:  they may fail outright, leaving their marketshare available to AIG; they may be bailed out by the government, which starts them on AIG’s path of neverending losses; or, they may be purchased by AIG.  In each of these results, a government-funded monopoly over the insurance industry is established.  This monopoly, like all monopolies, will suffer unnecessary costs and miss opportunities to innovate.

The added costs of a non-competitive insurance industry will be great, even in the unlikely circumstance that it is fully funded by premiums.  It is likely, however, that the monopoly would evolve into a nationalized insurance company, or a government service, rather than revert back to a private insurance corporation.

If AIG’s insurance role becomes a government service, it appears that the costs of that service will be borne by everyone who uses dollars, as the Treasury has started printing large amounts of currency to pay its bills.  This inflation is perhaps the most regressive form of taxation, because it hurts those who are not wealthy enough to protect themselves properly from its effects.