DemocracyThe God That Failed (28 page)

Regarding socialist property that is not reclaimed in this way, syndicalist ideas should be implemented; that is, the ownership of assets should immediately be transferred to those who use them—the farmland to the farmers, the factories to the workers, the streets to the street workers or the residents, the schools to the teachers, the bureaus to the bureaucrats, and so on.
¹¹
To break up the mostly over-sized socialist production conglomerates, the syndicalist principle should be applied to those production units in which a given individual's work is actually performed, i.e., to individual office buildings, schools, streets or blocks of streets, factories and farms. Unlike syndicalism, yet of the utmost importance, the property shares thus acquired should be freely tradeable and a stock market established so as to allow a separation of the functions of owner-capitalists and non-owning employees, and the smooth and continuous transfer of assets from less into more value-productive hands.
¹²

¹¹
The reference to "syndicalist ideas" here is not to be interpreted as an endorsement of the program of syndicalism. See also the following note 12. Quite to the contrary, the syndicalist slogan "the railways to the railway men, the mines to the miners, the factories to the factory hands" was originally meant to be a program of the
expropriation
of the private owners of capitalist enterprises. "Syndicalism like Socialism," writes Mises,

aims at the abolition of the separation of workers from the means of production, only it proceeds by another method. Not all workers will become the owners of all the means of production; those in a particular industry or undertaking or the workers engaged in a complete branch of production will obtain the means of production employed in it.
(Socialism,
p. 240)

The use of syndicalist ideas here is proposed to the very opposite effect, i.e., as a means of
privatizing
previously socialized factors of production
in
such
cases
where
no
identifiable
original
(expropriated)
private
owner
of
these
factors
exists.
Furthermore, the ethical rationale for the application of the syndicalist slogan in those—and
only
those-- cases lies in the fact that such a privatization scheme approximates most closely the method described by John Locke of the first (original) just appropriation of previously unowned resources. The railwaymen have in fact "mixed their labor" with the railroads, and the miners with the mines. Hence, their claim to these resources must be deemed better founded than anyone else's.

¹²
According to the original syndicalist program which aims to abolish permanently the separation of the worker from the means of production [see note 11 above], any trade or sale of his "property-share" by the worker must be precluded. "If syndicalist reform is to mean more than the mere redistribution of productive goods," explains Mises,

then it cannot allow the property arrangements of Capitalism to
persist in regard to the means of production. It must withdraw productive goods
from the market. Individual citizens must not dispose of the shares in the means of production allotted to them; for under Syndicalism these are bound up with the person of the owner in a much closer way than is the case in the liberal society.
(Socialism,
p. 242)

Two problems are connected with this privatization strategy. First, what is to be done in the case of newly erected structures—which according to the proposed scheme would be owned by their current productive users—built on land that is to revert to a different original owner? While it may appear straightforward enough to award each current producer with an equal property share,
¹³
how many shares
should go to the land owner? Structures and land cannot be physically separated. In terms of economic theory, they are absolutely specific complementary production factors whose relative contribution to their joint value product cannot be disentangled. In this case there is no alternative but to bargain." This—contrary to the first impression that it might lead to permanent, unresolvable conflict—should hardly cause many headaches, for invariably there are only two parties and strictly limited resources involved in any such dispute. Moreover, to find a quick, mutually agreeable compromise is in both parties' interest, and if either party possesses a weaker bargaining position it is clearly the landowner (because he cannot sell the land without the structure owners' consent while they could dismantle the structure without needing the landowner's permission).

In effect, under syndicalism the worker is not "owner" in the normal sense of the word; for ownership, as Mises notes, "is always where the power to dispose resides. . . . Private property exists only where the individual can deal with his private ownership in the means of production in the way he considers most advantageous." (pp. 244-45) In fact, if workers were permitted to dispose of their shares, conditions would quickly return to the capitalist
status
quo
ante
with a clear separation of owner-capitalists (property) on the one hand and workers (labor) on the other. However, if this is not permitted, explains Mises, then insurmountable difficulties arise, unless it is unrealistically assumed

that no changes occur in the methods of production, in the relations of supply and demand, in technique, or in population. ... If changes in the direction and extent of demand or in the technique of production cause changes in the organization of the industry, which require the transfer of workers from one concern to another or from one branch of production to another, the question immediately arises what is to be done with the shares of these workers in the means of production. Should the workers and their heirs keep the shares in those industries to which they happened to belong at the actual time of syndicalization and enter the new industries as simple workers earning wages, without being allowed to draw any part of the property income? Or should they lose their share on leaving an industry and in return receive a share per head equal to that possessed by the workers already occupied in the new industry? Either solution would quickly violate the principle of Syndicalism.... if the worker on his departure from an industry loses his share and on entering another industry acquires a share in that, those workers who stood to lose by the change would, naturally, oppose energetically every change in production. The introduction of a process making for greater productivity of labor would be resisted if it displaced workers or might displace them. On the other hand the workers in an undertaking or branch of industry would oppose any development by the introduction of new workers if it threatened to reduce their income from property. In short, Syndicalism would make every change in production practically impossible. Where it existed there could be no question of economic progress, (pp. 242-44)

See further on syndicalism Mises,
Human
Action,
chap. 23; idem,
Money,
Method,
and
the
Market
Process
(Boston: Kluwer, 1990), chap. 18.

¹³
Instead of awarding equal property shares to all current producers, for justice to prevail it would actually be preferable to award unequal shares in accordance
with the time that a worker has served within a given production unit. This would also permit the inclusion of currently retired workers in the proposed privatization scheme and thus solve the so-called pension problem.

Second, the syndicalist privatization strategy implies that producers in capital intensive industries would have a relative advantage as compared to those in labor intensive industries. The value of the property shares received by the former would exceed the wealth awarded to the latter, and this unequal distribution of wealth would require justification, or so it seems. In fact, such justification is readily available. Contrary to widespread "liberal" (i.e., social democratic) beliefs, there is nothing ethically wrong with inequality.
¹⁵
Indeed, the problem of privatizing formerly socialized property is almost perfectly analogous to that of establishing private property in a "state of nature," i.e., when resources are previously unowned. In this situation, according to the central Lockean idea of natural rights which coincides with most people's natural sense of justice, private property is established through acts of homesteading: by mixing one's labor with nature-given resources before anyone else has done so.
¹⁶
Insofar as any differences between the quality of
nature-given resources exist, as will surely be the case, the outcome generated by the homesteading ethic will be inequality rather than equality. The syndicalist privatization approach is merely the application of this homesteading principle to slightly changed circumstances. The socialized factors of production are already homesteaded by particular individuals. Only their property right regarding particular production factors has been ignored so far, and all that would occur under the proposed scheme is that this unjustifiable situation would finally be rectified. If such rectification results in inequalities, this is no more unfair
than the inequalities that would emerge under a regime of original, unadulterated homesteading.
¹⁷

¹⁴
On the economic theory of bargaining see Rothbard,
Man,
Economy,
and
State,
pp. 308-12; also Mises,
Human
Action,
p. 336.

¹⁵
See Murray N. Rothbard,
Egalitarianism
As
a
Revolt
Against
Nature
and
Other
Essays
(Washington, D.C.: Libertarian Review Press, 1974); also: Robert Nozick,
An
archy,
State,
and
Utopia
(New York: Basic Books, 1974), chap. 8; Helmut Schoeck,
Envy:
A
Theory
of
Social
Behavior
(New York: Harcourt, Brace and World, 1970); idem,
Das
Recht
auf
Ungleichheit
(Munich: Herbig, 1979); idem,
1st
Leistung
Unanstandig?
(Osnabrueck: Fromm, 1978); Erik von Kuehnelt-Leddihn,
Liberty
or
Equality
(Front Royal, Va.: Christendom Press, 1993).

¹⁶
See John Locke,
Two
Treatises
of
Government,
book 2, sect. 27, where he writes:

Though the earth and all inferior creatures be common to all men, yet every man has a "property" in his own "person." This nobody has any right to but himself. The "labor" of his body and the "work" of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state Nature placed it in, it hath by this labor something annexed to it that excludes the common right of other men. For this "labor" being the unquestionable property of the laborer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others.

See also note 11 above. In order to forestall any misunderstanding, the endorsement of Locke here refers exclusively to his central "homesteading" idea. It does not include an endorsement of the first statement of the just quoted passage or of the infamous "proviso" which concludes the passage. To the contrary, the first statement regarding the "common" ownership of nature requires unnecessary as well as unsubstantiable theological presuppositions. Prior to an act of original appropriation, nature is and must be regarded as simply unowned. Thus, the proviso is plainly inconsistent with Locke's main idea and must be abandoned. See on this also Richard A. Epstein,
Takings
(Cambridge, Mass.: Harvard University Press, 1985), pp. 10-12. From the rejection of Locke's initial premise it follows that criticisms of Locke's theory of original appropriation such as Herbert Spencer's in
Social
Stat
ics,
chaps. 9-10, must be rejected as invalid, too. Spencer shares Locke's initial premise, but based on this he concludes that this prohibits any private ownership in ground land whatsoever. Land, according to Spencer, can only be leased from "society" by paying a "ground rent" for its use. For a criticism of this proposal and similar ones made by Henry George and his followers see Rothbard,
Power
and
Market,
pp. 122-35.

For proponents of modem variants of the Lockean proviso and/or Spencer's land-egalitarianism, see Nozick,
Anarchy,
State,
and
Utopia,
pp. 178ff., and Hillel Steiner, "The Natural Right to the Means of Production,"
Philosophical
Quarterly,
27 (1977); for a refutation of these theoretical variants as self-contradictory see Jeffrey Paul, "Historical Entitlement and the Right to Natural Resources," in
Man,
Economy
and
Liberty.
Essays
in
Honor
of
Murray
N.
Rothbard,
Walter Block and Llewellyn H. Rockwell, Jr., eds. (Auburn, Ala.: Ludwig von Mises Institute, 1988), and Fred D. Miller, "The Natural Right to Private Property," in
The
Libertarian
Reader,
Tibor R. Machan, ed. (Totowa, N.J.: Rowman and Littlefield, 1982).