Spencer Heath Archive

Item 2992

Annotations by Heath in Willis J. Ballinger, By Vote of the People, foreword by John Chamberlain. Charles Scribners’ Sons, 1946.

 

Original is missing.

 

 

xiv        /Chamberlain: I do not share his faith that government can do much of a positive nature to break up concentrated wealth; only the people themselves can do that, through the development of consumer cooperatives and mutualizing associations of their own./

 

Why should wealth not be permitted to accumulate as capital? Don’t we want large-scale efficient production and employment?

 

All efficient production comes from concentration of wealth under unified administration.

 

 

29        /Ballinger: The economic force which has caused under-production in every previous capitalist system is the concentration of wealth./

 

          The very reverse is true.  S.H.

 

 

37        /Ballinger: It is not merely the unearned increment in land which has widened the gulf between Dives and Lazarus and has made the struggle for existence more intense under conditions of progress. [Emphasis by Heath]/

 

            No such thing! Anything received in a free market is recompense for something given.

 

 

38        /Ballinger: Sooner or later, concentrated wealth makes it possible for a few men to stand legally across the market, to levy toll on industry and commerce, to prevent production, and to force upon a people an economy of scarcity. [Emphasis by Heath]/

 

            Only government and not wealth can do this. Only by disabilities imposed on many and privileges conferred on the few.

 

 

39        /Ballinger: At one time in the history of the Republic, the land had been fairly well divided among the people./

 

          And taxation small, bureaucrats few.

 

 

          /A few centuries later, this situation was reversed and the land ownership was highly concentrated. A large part of the old agricultural population had been dispossessed of their farms and forced to go into the city./

 

          Taxed out of business and employment.

 

 

/Immediately this ownership exercised a sterilizing effect upon the natural capacity of the land to produce food for the people. A good portion of the land, instead of producing corn, wine, cereals, and milk to feed thousands of Romans, had been put to other use by millionaire landlords. The people were left to eke out a bare existence in the slums of the city. The land had been used to make artificial ponds bigger than the Lucrine Lake; or to create vast pleasure parks and game preserves for the rich./

 

As landlords they could get no income but from the produce of their lands. They must have been tax lords if they got income without producing.

 

 

/Olive groves that once had produced a living for the small Roman farmer had been destroyed to make elaborate flower gardens or magnificent terraces. Of the free agricultural population remaining, most had become tenants barely able to keep alive under their onerous rents. [Emphasis by Heath]./

 

No onerous taxes? Tenants pay only what they wish (what they bid). Tax payers give up what they must.

 

 

/A substantial portion of all Roman land stood completely idle. The rich owners had no need to cultivate it; so its natural productive power was kept in thralldom to symbolize the owner’s greatness. [Emphasis by Heath]/

 

Did they live on taxes, then?

 

 

41-42     /Ballinger: Suppressing competition has been a prolific source of great business fortunes. [Emphasis by Heath]/

 

          Government alone can do this.

 

 

          /Monopoly causes a tremendous distortion of exchange values. The monopolist through his power to dictate price can force consumers to pay a higher price for his product or service than they would have to pay under conditions of competition. The effect of the higher price is to compel other people to give more of their wealth in exchange for his product than they would otherwise have to do. Thus the monopolist appropriates other people’s wealth./

 

          All monopoly is the result or effect of taxation or some other repressive government action.

 

265       Government creates all monopolies, directly or indirectly.

 

266       Monopoly always is the creature of government.

 

 

48        /Ballinger: Land affords a perfect illustration of how wealth can be acquired without producing any wealth. Other forms of wealth require human labor before they can be brought into existence. The surface of the earth, however, was in finished form when man appeared to found community life. Through mere ownership of land, some men have been able to levy a vast toll on the productive efforts of others. [Emphasis by Heath]/

 

          But by performing a service — exercising a contractual jurisdiction (non-coercive) over sites and resources.

          Blind to contractual distribution as an essential community service.

 

 

49        /Ballinger: Henry George taught many forward-looking men and women to recognize that land values created by community effort are a source of unearned wealth. He contended that ground rents may not fairly be paid to anyone except society, which, by its presence, causes the scarcity value of land./

 

          Total fallacy due to total ignorance of the essential service performed by land ownership and of its vast importance to the society that enjoys it and automatically pays for it.

 

 

49-50     /Ballinger, quoting Franklin D. Roosevelt’s campaign address on public utilities, Portland, Oregon, September 21, 1932: “Instance after instance of pillage, deceit of the public and even of the prostitution of public agencies and officials may be found in the files of the Federal Trade Commission investigation of public utilities.”/

 

          Public service corporations have none but delegated powers. All their acts are the acts of their creators — governments.

 

 

63        /Ballinger: If .. government spending is unaccompanied by any effective program to free the productive powers of private business, the economic system will continue to lean on state aid until it is eventually absorbed by government, and dictatorship becomes firmly entrenched. [First emphasis by Heath]/

 

          It always makes unemployment. Government spending always burdens business and destroys it. “Free” government thus always leads to dictatorship.

The best government causes some unemployment. Then people spend themselves into slavery by public works and largesses./

 

 

74        /Ballinger quoting: “One year after the battle of Plataea a league of Greek maritime states was founded under the leadership of Athens to provide for a common defense against the Persians. In the beginning, this Delian League was a union of equal partners, each state contributing its quota of military supplies and manpower to maintain a common defense force. Athens acted as the executive of the confederacy, determining the quotas of the constituent members and seeing that the obligations assumed were fulfilled. In a short time, however, the other members of the League began to commute their quotas of military supplies and manpower into annual money payments. Then Athens had at her command a rich treasury with which she built and maintained a powerful fleet. Under the spur of this military might, Athens proceeded to reduce the other members of the League to a state of vassalage. What had started out with lofty sentiments about the protection of free government against Persian autocrats, degenerated into an Athenian empire.” [Emphasis by Heath]/

                       

          Like the proposed United Nations.

 

 

75        /Ballinger quoting: “The victories of the Delian League over the Persians resulted in a steady infiltration of slaves into the economic system. The growth of large estates in the agricultural regions was characterized by absentee ownership, administration by a bailiff and slave labor. Pitted against this cheap labor, which drove agricultural prices downward, the small Athenian farmer began again to go to the wall.” [Emphasis by Heath]/

 

          Slavery is authorized and enforced by government, never by any economic system. Like unemployment, it is caused only by political action.

 

 

90-91     “After the flight of Superbus, an oligarchical government run by the great land holders who had opposed him was established. The concentrated wealth of this group, after the overthrow of the commercial nobility, immediately elevated them to power. The kingship was abolished and two annually elected consuls were substituted. Legislative power was vested in a legislature consisting of the Comitia Centuriata, an assembly of all the people, and a Senate, composed of a small group of selected persons. The consuls were first selected in the Comitia Centuriata and, if their election was approved by the Senate, they took office. Both the Comitia Centuriata and the Senate, however, were highly undemocratic. Voting in the Comitia Centuriata was based on property qualifications so that the wealthy commanded a clear majority. The Senate consisted entirely of representatives of the patricians, descendants of the original settlers who had populated the hills of Rome; the plebeians being freemen who had migrated to Rome after this early period. In general, the patricians were great landed proprietors while the plebeians were small landholders or artisans. No one but a patrician could be nominated for the consulship and, thus, the patrician class completely controlled the executive and the legislature of the republic. All legislation, furthermore, had to be initiated by the consuls, and so, even in the Comitia Centuriata, the minority votes of the plebeians could be cast only for or against laws proposed by the patrician order.

                  “In this first period of the republic, there were two basic trends: a steady diffusion of wealth among the lower classes, and, accompanying this diffusion of wealth, a steady diffusion of political power among the people. When the diffusion of wealth had become sufficiently great, a vigorous free government flourished in Rome, with an agrarian capitalistic system providing a livelihood for any citizen willing to work.

                  “. . . Thus though the government of the patricians was oligarchical in nature, it dealt with the people cautiously and generously.” [Emphases by Heath]

 

          Republic set up by land owners.

          Monarchs are overthrown usually by land owners. They establish a proprietary — hotel-type — of community, landlords and free-men, which is productive. Demagogues institute “democracy” with taxation in place of rent for public revenue. Then follows poverty and concentration.

          Diffusion under the Oligarchy.

 

 

95-96     /Ballinger quoting: “As democratic government emerged in Rome, the people battled to preserve the economic condition which had brought it into existence. The people bent their energies to protect the diffusion of wealth that had been achieved and to further that diffusion.” [Emphasis by Heath]/

 

          Under the land-owning Oligarchy.

 

 

          /”Laws were passed prohibiting any Roman from owning more than a certain amount of public land, the source of the people’s economic power. The people, too, made war on other economic practices which caused wealth to concentrate unfairly. Chief among these was usury. War often compelled the Roman citizens to borrow money — to mortgage his farm or his business. At intervals, the accumulation of debt and impending foreclosures threatened to deprive many citizens of their means of relative economic equality. So free government periodically took steps to protect the people from unjust debt.” [Emphasis by Heath]/

 

          Is lending unjust, or is it “unjust” to owe it back — or to be paid back?

 

 

          /“Government commissions were appointed to scale down debts. Sometimes the government bought up claims so that debtors would be given more lenient terms; or the government advanced new credit to avert foreclosures. When foreclosures took place, the government came to the rescue of the evicted. … Government then saw to it that capital could be obtained at fair rates of interest.”/

 

 

198-200   /Ballinger quoting: “So long as the sources of capital — banks, insurance companies, trust companies and non-financial corporations — were competitive in their quest for investment opportunities, and so long as investment bankers acted competitively to appraise requests for capital on the basis of whether a business was likely to prosper competitively and reward investors, the new financial order represented genuine economic progress.

                  “By 1911 it was common knowledge among informed people that the new financial order had been perverted from its alleged purpose of administering more efficiently to the legitimate capital needs of business enterprise. In that year Woodrow Wilson, then Governor of New Jersey, charged that a ruthless and concentrated control of credit in the nation had been established. Said Wilson:

                  ‘The great monopoly in this country is the money monopoly. So long as that exists, our old variety and freedom and individual energy of development are out of the question A great industrial nation is controlled by its system of credit Our system of credit is concentrated. This is the greatest question of all; and to this, statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men.’” [Emphases by Heath, quoted by Louis D. Brandeis in Other People’s Money, page 1]

 

          Page E.C. Riegel.

          The increasing hazards of small business drove savings into larger and more efficient ones and those best able to resist government or command its favors.

 

 

          /“The control of capital was also used to exploit capital itself — to siphon off into the pockets of the controllers of capital riches gained by robbing investors. Worthless securities were marketed in bales. Security values were manipulated on stock exchanges to the profit of insiders. Corporations were loaded with debt — debt often created to enable insiders to sell property owned by them which they had deliberately overvalued. In addition, the exploiters would receive splendid underwriting commissions for raising the capital which was to be thus plundered. Handsome banking fees were charged for reorganizing corporations which had landed in bankruptcy from debt imposed by the same men who undertook their financial rehabilitation. … These and other techniques were developed by the controllers of capital for the exploitation of capital.”/

 

          Small capital, like small labor, being disemployed by government, falls into the hands of racketeers. Capital savings bosses same as labor union bosses.

          Political restrictions on productive power resulted in monopolies. Restriction is always invidious.

 

 

331       /Ballinger: “Are patent monopolies necessary to secure either the discovery of new inventions or their development?”/

 

          No, they are not.

 

 

347       /Ballinger: The condition which always depletes the productive powers of a capitalistic system is plutocracy. When a plutocracy generates within such a system, its natural capacity to produce is immediately restricted. In a soundly functioning capitalism, plutocracy does not exist and the system is free to produce. A desirable condition of relative inequalities in wealth exists, but extreme inequalities caused by the flourishing of predatory business techniques are prevented. [Emphasis by Heath]/

 

          “Plutocracy” always dependent on taxation and other government seizures and restrictions unbalancing the exchange system — making competition one-sided and thus inducing monopolies. The evil is not noticed until it becomes severe, as it in time always does.

 

          /Extreme inequalities in wealth creates plutocracy, and from such inequalities stems the economic and political power which is invariably used to restrict production in a capitalistic economy. If democratic government provides proper regulation for the system, particularly maintaining competition in it, no individual or group of individuals has the power to stop production. The natural selfishness of human nature is then so organized that its expression promotes and does not interfere with production./

 

          There are only two kinds of power — contractual and coercive. The one causes production, the other stops production. Government has none but coercive power. It is non-competitive — makes no free contracts. First it lends, then imposes its power.