Monday, January 21, 2013

The New Deal in Old Rome

"The attempt of Diocletian and his successors to save an empire that was crumbling resulted in complete regimentation under a totalitarian state.  In the reign of Marcus Aurelius many villages and towns had been virtually wiped out by a great plague…On a diminished population with greatly impaired resources taxes were increased to support the enlarged army and the vast bureaucracy.  Heavy contributions of grain were extracted from farmers to feed the soldiers and the population of the large cities.  There were land taxes, property taxes, occupation taxes, poll taxes.  It has been said of this period that 'the penalty of wealth seemed to be ruin.'  The heart was taken out of the enterprising men. Finally the burden became so intolerable that to escape the imperial levies tenants fled from the farms and business men and workmen from their occupations.  The government intervened and bound the tenants to the soil--the beginning of serfdom--and the business men and workmen to their occupations and trades.  Private enterprise was crushed and the state was forced to take over many kinds of business to keep the machine running.

"As oppression by the central authority increased, many Romans in the frontier provinces escaped from its heavy hand to find refuge among the Germans and even the Huns.  It is recorded that a refugee with the Huns told a Roman ambassador that 'he considered his new life with the Huns better than his old life among the Romans.'  To the poor, it was said, the enemy was kinder than the tax collector. "

--H.J. Haskell, The New Deal in Old Rome, p. 221. 


Doug Plumb said...

I think socialism is inevitable, probably necessary for a technological state. But its the titles of nobility that are not necessary. Titles of nobility lead to other kinds of unjustified entitlements.

The nobility in the USA and other countries has reinforced the value of a currency not backed by substantiative value nor promise.

Titles of nobility are a replacement for reason in governance.The most well known is "esq".

Whether new deals have worked in the past or not, our technological society will be having them. They will be necessary for the planning that must come from this type of society. People's desire for comfort and technology will always outstrip everything else.

Mitchell Langbert said...

Doug, I respectfully disagree that technology has anything to do with a need for socialism. Socialism was present in prehistoric times, for example in Sparta, which was largely a communistic state. It was also present through the Middle Ages in various forms of communism, communally plowed fields, and religious orders. In fact, the original mandate of both the Massachuesetts Bay Colony and the original settlement in Virginia was to adopt a socialistic form. Both settlements found that socialism led to poverty, and therefore adopted private property independently. Mercantilism of the late 1400s to 1700s and after was very close to socialism and today's form of government in America in many ways.

The problem with mercantilism and socialism is that it inhibits technological growth and development. Very little new technology comes out of socialist states like North Korea and Cuba. The only advances China has made have been as it has discarded socialism.

Ludwig von Mises and Friedrich Hayek show that a modern economy cannot function efficiently under socialism. The reason is that the information needed for decision makers to respond to economic fluctuations is too subtle and complicated for a central planner to grasp and to apply to the billions of economic transactions that occur in America each day.

The problem of technology is for socialism. Innovation requires experimentation; experimentation requires access to capital and the absence of inhibitors on experimentation. Socialism does not allow flexible allocation of capital and inhibits experimentation. Government boards rather than individuals allocate capital.

Therefore, progress and modern life decline as socialism is adopted. We are seeing that occur in America today. The average American is no better off than he was in 1970. When America had less socialism, from 1800 to 1950, progress was quicker, considerably quicker, and the average American's wages increased .5% to 2.0% each year. Socialism ended that increase.