The Violence Economy

Recently I’ve been working on an economic idea of sorts, one on the economy of the state, or as I like to call it the violence economy. It’s an expansion of my previous idea regarding the value of fiat currency.

The base of the idea is the fact that the state is an entity that exists entirely by violence. As explained by Albert J. Nock in his book Our Enemy, the State there are two means of obtaining wants, the political means and the economic means. The political means is voluntary trade amongst individuals whereas the political means it the use of the state’s violence to extract wealth from others.

Because of the state’s method of obtaining wealth it has a keen interest in helping and protecting the wealthy. Likewise the wealthy have a keen interest in protecting the state. The state requires the wealthy to leech off of while the wealthy desire the state’s gun to prevent competition and otherwise increase their wealth through political means. A good demonstration of this is how the state treats the poor.

Many people on the political “left” demand the state help the poor. This isn’t surprising as it is typical of a cooperative species such as our own to help those in need. The “left” believe the state is the best mechanism to assist those in need. Their belief is a mistake though because the state has no interest in the poor since the poor have nothing to take. Of course this doesn’t stop the state from claiming to help the poor, after all they are able to gain popular support for wealth stealing programs if they are disguised as methods of assisting those in need. With such justification the state is able to get public acceptance for new taxes, fees, subsidies, and other wealth stealing mechanisms.

Let’s look at subsidies for a second. During the New Deal the Agricultural Adjustment Act of 1938 was passed into law. This act established subsidies for various agricultural goods. One of the provisions of the act was to limit the area farmers could dedicate to growing wheat. This restriction created an artificial shortage of wheat, which increased the price. The act was passed under the guise of helping poor farmers eek out a better living but the shortage it created meant many could not afford wheat-based products such as bread. The Supreme Court upheld the law, claiming it was Constitutional under the Commerce Clause in Wickard v. Filburn.

What benefit did the subsidies have? Making the farmers money. Why would the state want to make farmers money? To take a portion of that wealth. Farmers are producers of a needed good so it’s a safe assumption that they will continue to generate wealth. The more wealth they can generate the more wealth they have for the state to take. To ensure the farmers continue to give wealth to the state they are allowed to keep a portion of what they make (usually a greater portion). The state learned its lesson during feudal times when the nobility took almost everything form the peasants causing them to revolt periodically.

Looking at the economy of any developed nation leads one to realize how tightly the state and big producers are tied together. Every industry eventually gets regulated in such a way as to protect established producers. In turn more wealth is given to the protected businesses, a portion of which the state takes as “protection” money.

What we end up with is a vicious cycle, a violence economy. I plan to expand on this idea over time but I think the foundation of this idea is pretty solid at this point.