Conclusion to Part 3
Updated: 1/13/20
Christian Economics: Teacher's Edition
If a man steals an ox or a sheep, and kills it or sells it, he shall repay five oxen for an ox, and four sheep for a sheep. If a thief is found breaking in and is struck so that he dies, there shall be no bloodguilt for him, but if the sun has risen on him, there shall be bloodguilt for him. He shall surely pay. If he has nothing, then he shall be sold for his theft. If the stolen beast is found alive in his possession, whether it is an ox or a donkey or a sheep, he shall pay double (Exodus 22:1–4).
The free market is not an autonomous institutional arrangement. It was not designed by men. It developed unpredictably and slowly out of the legal protection given to private property by society. It operates as an extension of family covenants, individual covenants, and contracts. It is not an agency of violence. On the contrary, it is an agency of peace. It flourishes under a regime of peace.
In a social order that is based on the division of labor, those people who are most skilled in the techniques of violence and fraud extend their power over people who do not possess these skills. This is a threat to the free market social order. But the free market is incapable of defending itself against violence. Why? Because its fundamental principle of success is “high bid wins.” But this bidding process must not be coerced or fraudulent. Also, the system of competitive bidding depends on a legal order that allows open entry of bidders and auctioneers. The free market is incapable of providing a final earthly court of appeal with both the authority and the power to impose negative sanctions on those who employ violence and fraud on the innocent. The essence of the free market is the absence of final resolution. Everything is open to another bid. The free market therefore needs protection from outside the market order. That is to say, it is not autonomous.
Civil government is the agency of protection. It has the final say in specific disputes, short of revolution. There has to be an agency that possesses this final say in order to put an end to disputes that threaten to become violent. The state puts an end to family feuds and clan wars. By protecting private property and by enforcing the rule of law, the state furthers the extension of the division of labor through market contracts. This increases people’s wealth.
No civil government can create wealth. It is not a source of net positive sanctions. It can provide positive sanctions to members of some special-interest groups only by extracting wealth from taxpayers. The state must therefore be supported financially from the productivity of taxpayers. Inherent in the idea of limited civil government is the idea of its inability to create wealth. A major moral and intellectual problem arises from the idea of the state as a legitimate provider of net positive sanctions. This is the idea of the autonomy of the state. Whenever this idea takes hold in any society, people impute to the state the power of healing. Whenever this happens, there are no theoretical limits as to what the state is thought capable of providing. It becomes messianic.
The greater the level of self-government in any society, the less money that taxpayers must spend on civil government in order to suppress evil acts. Self-government restricts the expansion of the jurisdiction of the state. Self-government is therefore basic to liberty. It restricts the call for the creation of a messianic state.
In Part 4, I explore examples of false ideas that rely on the idea of the state as a provider of net positive sanctions. These ideas have become common in the era of scientific Darwinism. So has the idea of the messianic state.
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For the rest of this book, go here: https://www.garynorth.com/public/department193.cfm