One of the great pleasures of releasing an ebook every week is this: I face the pressure to edit, read, and digest books at a regular pace, rain or shine. I prepare videos and articles on them and send announcements, which means that I must know the material well. The demands can be intense but the personal benefits are enormous.
This is because these are all fantastic works. New or older works, they are all smart, on topic, and packed with penetrating insights. It’s the best of the best, rolled out systematically, week by week, toward the building of a vast library.
It’s like studying under a new master of the universe on a rotating, seven-day schedule.
This week, my master has been Isabel Paterson. Reading God of the Machine, released today in the Laissez Faire Club, is a super jazzy experience. How could someone have been so wise, so insightful, so correct on issue after issue, and to put all this on display in 1943? It is nothing short of dazzling. It might have been written about our exact political moment, right now. It all applies, whether talking about debt, war, invention, bailouts, guarantees, spending or the desire for universal provision at the point of a gun.
I can see why Paterson had such life-changing influence on those who read and knew her at the time. What I can’t understand is how this book dropped down the memory hole! Or maybe we already know. An entire generation of writers from this period were essentially banned from public discourse.
Wendy McElroy discusses this point more in the extended and erudite introduction.
As I went through the book, I highlighted some key passages that you just have to see. Some are long and some short but it’s all unforgettable.
There is no means by which “the rich” can be taxed without ultimately taxing “the poor” far more heavily. And one tax tends to increase all other taxes, instead of lessening them, because tax expenditure goes into things which require upkeep and yield no return (public buildings and political jobs).
Political power has a ratchet action; it works only one way, to augment itself. A transfer occurs by which the power cannot be retracted, once it is bestowed. In the lowest illustration of this, a candidate for office may promise the voters that he will reduce taxes, or the number of offices or the powers of office. But once he is elected, he can use the taxes, the officeholders or the powers to ensure re-election; therefore, the motive of the promise is no longer operative. By cutting down expenditure or the number of officeholders or graft, he will certainly create enemies, so the reverse motive, impelling him to evade his promise, is doubled. The voter can only vote the incumbent out; but the next officeholder will come into those augmented powers, and be still harder to get rid of in turn.
Government cannot “restore competition,” or “ensure” it. Government is monopoly; and all it can do is to impose restrictions which may issue in monopoly, when they go so far as to require permission for the individual to engage in production.
Two bodies cannot occupy the same space at the same time. This is the reason why private property belongs to man as a creative being (a right both natural and divine).
The free economy produces its money as it produces steel, by going and getting it, digging the ore out of the ground…
Gold was not and is not given value by fiat, any more than cheese or cotton or leather were given value by fiat. It has value because it serves a vital need. Nothing can be given value by fiat. If a gold coin of the Roman Republic were dug up now, it would have its original value, though the Roman Republic perished two thousand years ago. So would a Russian gold ruble minted under the czars, or a gold coin of Germany or France dated before 1914; though the last czar was shot in a cellar, the last German emperor fled the country and died in exile and France has suffered invasion and conquest. But paper currency of Russia, Germany or France before 1914 is now waste paper.
There was once a government which really prohibited gold, and kept none itself, in the belief that gold was bad for people. That was Sparta. But the Spartans believed that comfort, convenience, industry, were bad; and work was ignoble. The Spartans used iron for money, because nobody could carry enough of it around for general exchange. The object was to keep the nation poor, to keep the citizens on a bare subsistence economy. The plan succeeded perfectly. That is just what the prohibition of gold will effect; it will reduce a nation to a dead level of poverty and keep it in that condition. But the rulers of Sparta were willing to remain poor themselves. They enjoyed no more luxury than anyone else; no more than the very slaves who did the work. Yet even in Sparta, where food was doled out at a common soup kitchen, something had to be used for money, and that material had to have intrinsic value.
The modern despots do not wish to be poor themselves. They wish to grab every luxury an industrial economy can supply. What they want is to keep the producers poor, by taking the product and doling a little back again for subsistence…
When paper currency is depreciated, the difference has to come out somewhere; and the main cut is in wages. The fact is that heavy government expenditure must always be taken from the workingman’s wages; there is no other possible source. But the depreciation in currency comes out of wages immediately; whatever anyone gets in his pay envelope will simply buy him that much less in goods.
All the inventions of man have individualism as their end, because they spring from the individual function of intelligence, which is the creative and productive source…
Because man is not deterministic, there can be no set order of his discoveries. Progress is always possible, but it depends upon the unpredictable use of intelligence. From the known record, it does not appear that men have ever wholly lost any important body of knowledge once attained; though it might lie unused for a time, until the moral principles were affirmed by which material science could be applied beneficially. The precedence of the moral order is clear, since useful discoveries occur only when men secure liberty by restraint of the political power. Such discoveries were made at various times and places, and brought together; but the principles involved are universal.
What was the cause of the panic? Enormous government loans abroad which were not repaid; and the existence of the Federal Reserve system, a political creation, which made an inordinate credit extension possible.
If a financial system is unsound, it can only be so by the possibility of overextension of credit, and paper currency. A true remedy could only consist of limiting such facilities. Government “guarantees” merely put the property of prudent men at the disposal of speculators in case of loss. There is no such thing as a “money panic”; a financial panic occurs from collapse of credit.
Men enslave themselves, forging the chains link by link, usually by demanding protection as a group. When businessmen ask for government credit, they surrender control of their business. When labor asks for enforced “collective bargaining,” it has yielded its own freedom. When racial groups are recognized in law, they can be discriminated against by law.
Most of the harm in the world is done by good people, and not by accident, lapse or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends. This is demonstrably true; nor could it occur otherwise. The percentage of positively malignant, vicious or depraved persons is necessarily small, for no species could survive if its members were habitually and consciously bent upon injuring one another. Destruction is so easy that even a minority of persistently evil intent could shortly exterminate the unsuspecting majority of well-disposed persons. Murder, theft, rapine and destruction are easily within the power of every individual at any time. If it is presumed that they are restrained only by fear or force, what is it they fear, or who would turn the force against them if all men were of like mind? Certainly, if the harm done by willful criminals were to be computed, the number of murders, the extent of damage and loss, would be found negligible in the sum total of death and devastation wrought upon human beings by their kind. Therefore, it is obvious that in periods when millions are slaughtered, when torture is practiced, starvation enforced, oppression made a policy, as at present over a large part of the world, and as it has often been in the past, it must be at the behest of very many good people and even by their direct action, for what they consider a worthy object. When they are not the immediate executants, they are on record as giving approval, elaborating justifications or else cloaking facts with silence, and discountenancing discussion….
Then there must be a very grave error in the means by which they seek to attain their ends. There must even be an error in their primary axioms, to permit them to continue using such means. Something is terribly wrong in the procedure, somewhere. What is it?…
The root of the matter is ethical, philosophical and religious, involving the relation of man to the universe, of man’s creative faculty to his Creator. The fatal divergence occurs in failing to recognize the norm of human life…. No one person, though his income be $10 million dollars a year, can take care of every case of need in the world. But supposing he has no means of his own and still imagines that he can make “helping others” at once his primary purpose and the normal way of life, which is the central doctrine of the humanitarian creed, how is he to go about it? …
There is only one way, and that is by the use of the political power in its fullest extension. Hence, the humanitarian feels the utmost gratification when he visits or hears of a country in which everyone is restricted to ration cards. Where subsistence is doled out, the desideratum has been achieved, of general want and a superior power to “relieve” it. The humanitarian in theory is the terrorist in action. …
Why do kindhearted persons call in the political power? They cannot deny that the means for relief must come from production. But they say there is enough and to spare. Then they must assume that the producers are not willing to give what is “right.” Further, they assume that there is a collective right to impose taxes, for any purpose the collective shall determine. They localize that right in “the government,” as if it were self-existent..
But if taxes are to be imposed for relief, who is the judge of what is possible or beneficial? It must be either the producers, the needy or some third group. To say it shall be all three together is no answer; the verdict must swing upon majority or plurality drawn from one or other group. Are the needy to vote themselves whatever they want? Are the humanitarians, the third group, to vote themselves control of both the producers and the needy? (That is what they have done.) The government is thus supposed to be empowered to give “security” to the needy. It cannot. What it does is to seize the provision made by private persons for their own security, thus depriving everyone…
If the full roll of sincere philanthropists were called, from the beginning of time, it would be found that all of them together by their strictly philanthropic activities have never conferred upon humanity one-tenth of the benefit derived from the normally self-interested efforts of Thomas Alva Edison, to say nothing of the greater minds who worked out the scientific principles which Edison applied. Innumerable speculative thinkers, inventors and organizers have contributed to the comfort, health and happiness of their fellow men — because that was not their objective.
Amazing, isn’t it? And that’s just the beginning. This sampling is long, but for the article, I cut back dramatically from what I wanted to quote. And as you can see, she is not only prophetic and highly intelligent; she was able to write like very few others of her day. As Douglas French has written, she was clearly one of the great minds of the century, however tragically overlooked she has been.
The political establishment of the time wanted this book suppressed. But with digits and technology, we can subvert their intentions and distribute her words to the multitudes, thereby subverting their plans for Paterson to be forgotten. Reading this book means to never forget her and the lessons she taught.