Are Benjamin Tucker’s Four Monopolies Constitutional?

kylerearden (48)in #constitution • 8 years ago (edited)

Given that I have already made the chief arguments on this question during the 1/25/16 special edition of Liberty Under Attack Radio, what I will be doing here is simply putting those same arguments in the form of an article, and extrapolating somewhat more so than I did on the broadcast. I am unaware of anyone else who has made these arguments before, so to my knowledge, I am the original author of them. It is my hope that I have borne my burden of proof, and in case I have not, I wish any and all critics to act in good faith when they are poking holes in the reasoning and evidence presented here.

Benjamin Tucker was an individualist anarchist and the editor of the periodical Liberty, which ran from 1881 – 1908. In 1888, he published State Socialism and Anarchism: How Far They Agree, and Wherein They Differ, where he first laid out his political theory of the Four Monopolies. Upon reviewing his theory, I realized that it could be argued that these Four Monopolies are constitutional, pursuant to the United States Constitution of 1787.

Conceptually, what are Tucker’s Four Monopolies and how might they be constitutional? Briefly put, these Four Monopolies are as follows:

The money monopoly
The land monopoly
The tariff monopoly
The patent monopoly

So, if my contention is right, then there ought to be constitutional clauses that justify these monopolies, don’t you think? Arguably, there are seven constitutional clauses that could be said to legitimize these Four Monopolies. If true, then the value of the federal constitution in securing liberty would be brought into serious question.

What of this money monopoly, then – is it constitutional? Tucker himself described the money monopoly thusly:

“First in the importance of its evil influence they considered the money monopoly, which consists of the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, of issuing the circulating medium, a privilege which is now enforced in this country by a national tax of ten per cent., upon all other persons who attempt to furnish a circulating medium, and by State laws making it a criminal offense to issue notes as currency. It is claimed that the holders of this privilege control the rate of interest, the rate of rent of houses and buildings, and the prices of goods, – the first directly, and the second and third indirectly. For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the labor cost, which statistics show to be less than three-fourths of once per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for capital with which to start and carry on business will find their difficulties removed. If they have property which they do not desire to convert into money by sale, a bank will take it as collateral for a loan of a certain proportion of its market value at less than one per cent. discount. If they have no property, but are industrious, honest, and capable, they will generally be able to get their individual notes endorsed by a sufficient number of known and solvent parties; and on such business paper they will be able to get a loan at a bank on similarly favorable terms. Thus interest will fall at a blow. The banks will really not be lending capital at all, but will be doing business on the capital of their customers, the business consisting in an exchange of the known and widely available credits of the banks for the unknown and unavailable, but equality good, credits of the customers and a charged therefore of less than one per cent., not as interest for the use of capital, but as pay for the labor of running the banks. This facility of acquiring capital will give an unheard of impetus to business, and consequently create an unprecedented demand for labor, – a demand which will always be in excess of the supply, directly to the contrary of the present condition of the labor market. Then will be seen an exemplification of the words of Richard Cobden that, when two laborers are after one employer, wages fall, but when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product. Thus the same blow that strikes interest down will send wages up. But this is not all. Down will go profits also. For merchants, instead of buying at high prices on credit, will borrow money of the banks at less than one per cent., buy at low prices for cash, and correspondingly reduce the prices of their goods to their customers. And with the rest will go house-rent. For no one who can borrow capital at one per cent. with which to build a house of his own will consent to pay rent to a landlord at a higher rate than that. Such is the vast claim made by Proudhon and Warren as to the results of the simple abolition of the money monopoly.”

Since Tucker wrote this after the Second Bank of the United States underwent liquidation in 1841, yet before the Federal Reserve Act of 1913, then what is he referring to here? I would suggest that he is expressing his grievances over legal tender laws and banking regulations. Consider that both the Borrowing Clause (Art. I § 8 cl. 2) and the Coinage Clause (Art. I § 8 cl. 5) say, respectively, that:

“The Congress shall have Power…To borrow Money on the credit of the United States…To coin Money, regulate the Value thereof, and of foreign Coin…”

If you ask me, there ought to be a separation of state and the economy (just as there is a separation of church and state), but I fail to see how the U.S. Constitution does that; at best, it gives the government “limited” power over the issuance of currency and credit. Delegating to the Congress the power to borrow and coin money has led to the ongoing currency wars, and potential sovereign default, due largely to the unbelievably astronomical costs of social insurance. Most revealingly, Bernard von NotHaus was persecuted for his issuance of the private Liberty Dollar currency, so much so that it was described by U.S. Attorney Ann Tompkins as “a unique form of domestic terrorism.” Is such a constitutional monopoly on the borrowing and coinage of money really worth the price of freedom?

Next up, is the land monopoly. Tucker said:

“Second in importance comes the land monopoly, the evil effects of which are seen principally in exclusively agricultural countries, like Ireland. This monopoly consists in the enforcement by government of land titles which do not rest upon personal occupancy and cultivation. It was obvious to Warren and Proudhon that, as soon as individualists should no longer be protected by their fellows in anything by personal occupancy and cultivation of land, ground-rent would disappear, and so usury have one less leg to stand on. Their followers of today are dispose to modify this claim to the extent of admitting that the very small fraction of ground-rent which rests, not on monopoly, but on superiority of soil or site, will continue to exist for a time and perhaps forever, though tending constantly to a minimum under conditions of freedom. But the inequality of soils which gives rise to the economic rent of land, like the inequality of human skill which gives rise to the economic rent of ability, is not a cause for serious alarm even to the most thorough opponent of usury, as its nature is not that of a germ from which other and graver inequalities may spring, but rather that of a decaying branch which may finally wither and fall.”

Although it is true that the anarchic school of individualism usually disliked the concept of making money from money (especially in the forms of interest, rent, and dividends), might I proffer the notion that Tucker was right in his conclusion, if not necessarily in his reasoning? Take into account the Enclave and Military Installations Clause (Art. I § 8 cl. 17), the Property Clause (Art. IV § 3 cl. 2), and the Takings Clause (Fifth Amendment), which, respectively, say that:

“The Congress shall have Power…To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;…”

“The Congress shall have Power to dispose of and make all needed Rules and Regulations respecting the Territory or other Property belonging to the United States…”

“..nor shall private property be taken for public use, without just compensation.”

I remember earlier this month when Pete Santilli read aloud the Enclave & Military Installations Clause, which he claimed was the constitutional basis behind the Citizens for Constitutional Freedom (C4CF) group who conducted a sit-in at the Malheur National Wildlife Refuge. In short, Santilli claimed that the FBI did not want the public to learn the “true meaning” of the Enclave & Military Installations clause, mainly because “other needful buildings,” according to his interpretation, includes only federal buildings and post offices. Well, I guess the $64,000 question is, does a wildlife refuge count as an “other needful building?” If you were the federal prosecutor slapping those C4CF demonstrators with felonies, wouldn’t you be arguing in court that the wildlife refuge was an “other needful building,” and therefore, it would well be within the bounds of the Constitution for the Congress to exercise its like authority by (presumably) ordering the FBI to conduct its “enforcement action” that it did earlier this very week?

What Santilli failed to realize is that the Constitution legitimizes the land monopoly through eminent domain and this horrid fee simple arrangement. The Takings Clause is the eminent domain power, which is only possible because the citizenry, by and large, does not hold allodial title over their own land; only these nation-states enjoy allodial title, which is why those who “own” their property in fee simple not only owe property taxes, but are also subject to eminent domain as an existential threat, even if the property had originally been homesteaded. The Property Clause is really only an afterthought once the property has been seceded to the federal government, and the Enclave & Military Installations Clause is just simply nothing other than a more palatable way to transfer allodial title from one of the sovereign state governments to the national government; so, whether it be by way of inter-legislative agreements or compulsory purchase, the United States government enjoys a constitutional monopoly on land ownership.

As if that wasn’t depressing enough, the next one is the tariff monopoly. Tucker says:

“Third, the tariff monopoly, which consists in fostering production at high prices and under unfavorable conditions by visiting with the penalty of taxation those who patronize production at low prices and under favorable conditions. The evil to which this monopoly gives rise might more properly be called misusury than usury, because it compels labor to pay, not exactly for the use of capital, but rather for the misuse of capital. The abolition of this monopoly would result in a great reduction in the prices of all articles taxed, and this saving to the laborers who consume these articles would be another step toward securing to the laborer his natural wage, his entire product. Proudhon admitted, however, that to abolish this monopoly before abolishing the money monopoly would be a cruel and disastrous policy, first, because the evil of scarcity of money, created by the money monopoly, would be intensified by the flow of money out of the country which would be involved in an excess of imports over exports, and, second, because that fraction of the laborers of the country which is now employed in the protected industries would be turned adrift to face starvation without the benefit of the insatiable demand for labor which a competitive money system would create. Free trade in money at home, making money and work abundant, was insisted upon by Proudhon as a prior condition of free trade in goods with foreign countries.”

Of course, tariffs are the taxes imposed upon imports and exports. The Taxing & Spending Clause (Art. I § 8 cl. 1) says:

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts, and Excises…but all Duties, Imposts, and Excises shall be uniform throughout the United States…”

In other words, a customs duty or impost is a tariff. Granted, tariffs do not upset American patriots like the federal income tax as enforced by the IRS, yet Tucker pondered that the economic consequences of tariffs, constitutionality aside, wrecks havoc with Say’s Law, just as the money monopoly does.

Finally, there is the patent monopoly. Tucker describes it thusly:

“Fourth, the patent monopoly, which consists in protecting inventors and authors against competition for a period long enough to enable them to extort from the people a reward enormously in excess of the labor measure of their services, – in other words, in giving certain people a right of property for a term of years in laws and facts of Nature, and the power to exact tribute from others for the use of this natural wealth, which should be open to all. The abolition of this monopoly would fill its beneficiaries with a wholesome fear of competition which would cause them to be satisfied with pay for their services equal to that which other laborers get for theirs, and to secure it by placing their products and works on the market at the outset of prices so low that their lines of business would be no more tempting to competitors than any other lines.”

As I’ve mentioned before, Stephen Kinsella convinced me that so-called “intellectual property” is illegitimate. Unfortunately, there is the Copyright Clause (Art. I § 8 cl. 8):

“The Congress shall have Power…To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

When you consider how “copyright infringement” has been used to censor the alternative media, I can’t help but wonder if constitutionality is little other than a glaring liability. If American republicanism is truly the justification for this Leviathan known as the State, then I want nothing to do with it.

Upon this evaluation, I can’t help but conclude that Benjamin Tucker’s political theory of the Four Monopolies are, in fact, constitutional. Given this realization, it would support Gustave de Molinari’s contention that the monopoly on security enables all other monopolies; in this case, Tucker’s Four Monopolies. The takeaway here is that just because something is constitutional does not therefore make it right, much less anything that anyone with a smidgen of economically literacy ought to wholeheartedly endorse.