A Basic Introduction to the Four Monopolies
By Sean Jobst, 10 January 2011
Usury is not merely an economic procedure, but a fundamental feature of its operation. There is perhaps no better way to describe modern economics than its result: a concentration of wealth into the hands of a few, who enjoy their privileges due to extensive state intervention in the market. Politics has been subverted by economic interests, such that it is not possible for politicians to operate except with the blessing of their financial backers and others who operate the economy.
One of the leading observers of this political economy was the American individualist anarchist Benjamin Tucker. He further developed the Mutualism of the French anarchist Joseph Proudhon, who had recognized the Economists were a new sect and Economics a modern religion, and combined it with the work of an early American anarchist thinker named Josiah Warren, to create a new form of Market Anarchism that was uniquely American. Examining the nature of the state and the development of its economic procedures, Tucker was able to identify four distinct monopolies that had developed.
The first is the land monopoly, “the enforcement by government of land titles which do not rest upon personal occupancy and cultivation.” (1) Capitalism is certainly unthinkable without two actions of the feudal classes: the abolition of the guild and replacing it with the corporation, and the enclosure of the commons. The latter was founded on artificial “property rights” of the landed aristocracy, so “the landed classes were given full legal title, and the peasants were transformed into tenants at will with no customary restriction on the rents that could be charged.”(2)
In this historical sense, Proudhon made an important distinction between the idea of “property,” certainly as it exists now has derived from an artificial basis, and “possessions,” an organic view of land based on actual use and occupancy. This is the only just notion of land, one that is actually used and occupied through one’s labor. Yet in the capitalist West there are large areas of land set aside for absentee owners, whether it is the government or big corporations.
Ironically, it has allowed for the land to be ecologically abused by these big corporations, which have polluted the land and air, even while the government has confiscated much land under the cover of “conservation.” This keeps the resources artificially scarce and confers a monopolitic privilege on those who control the land.(3) In practice, this withholding land from production means “the state gives favored capitalists preferential access to it.”(4) The land monopoly is the first to have occurred, as “economic exploitation is impracticable until expropriation from the land has taken place.”(5)
Leading to such economic exploitation, this led to the second monopoly upon which all other monopolies rest, and this is the money monopoly. It is the privileged ability of some to issue and circulate the medium of exchange, denying the right of people to choose their own medium of exchange. Although initially vested within the government, this has been given to a cartel of private banks which then make up the central bank; laws are further passed making it a criminal offense for one to choose a medium of exchange other than the one issued by the central bank.
This monopoly more than anything else demonstrates how the state is really the merger of government and banking, just as the other monopolies demonstrate the further merger of the state with the corporation. In actuality, the bank doesn’t loan anything since the financier “invests little or no capital of his own, and therefore, lends none to his customers, since the security which they furnish him constitutes the capital upon which he operates.”(6) At the same time, the government intervenes with laws called capitalization requirements, that restrict this “service” to only those with enough available capital, so that the bankers are able to charge usurious prices on the loan.(7)
The money monopoly is central to understand, for it has reinforced the monopoly of land and capital. The key to ending this unnatural privilege called usury, is to give back to people the ability to choose their own medium of exchange. “I expect lending and borrowing to disappear, but not by any denial of the right to lend and borrow. On the contrary, I expect them to disappear by virtue of the affirmation and exercise of a right that is now denied, – namely, the right to use one’s own credit, or to exchange it freely for another’s, in such a way that one or the other of these credits may perform the function of a circulating medium, without the payment of any tax for the privilege.”(8)
The third monopoly is that of tariffs, “fostering production at high prices and under unfavourable conditions by visiting with the penalty of taxation those who patronize production at low prices and under favourable conditions.”(9) Tariffs are the result of the cartelization of labor. The late nineteenth century saw the rise of large corporations, which through the state privileges they enjoyed were able to have such an unfair advantage over smaller competitors that were more efficient.
The result has been “an economic system in which industry cartelizes behind the protection of tariff barriers; sells its output domestically for a monopoly price significantly higher than market-clearing level, in order to obtain super-profits at the consumer’s expense; and disposes of its unsellable product abroad, by dumping it below cost if necessary.”(10) It is nothing but the impetus behind more wars to guarantee corporate interests. Politically, this is the perogative of both the neo-liberal Democratic Party and the neo-conservative Republican Party.
In practice, this is the reality behind the so-called “free trade” agreements that are anything but either “free” or “trade,” relying on state-guaranteed privileges of select multinational corporations to exploit cheap labor abroad and then dump products on the domestic market, that could otherwise have been made cheaper and more efficiently. With the privilege they enjoy from these treaties not between the peoples from the bottom, but rather the capitalist-ridden governments at the top, these corporations are free to exploit labor by paying less, so that their own profits can rise.
The fourth monopoly is that of patents, which along with tariffs and transporation subsidies, developed monopoly capitalism as exists currently. “The patent privilege has been used on a massive scale to promote concentration of capital, erect entry barriers, and maintain a monopoly of advanced technology in the hands of western corporations.”(11) To enforce these “intellectual property” laws, or the notion of “property rights” in ideas, naturally requires the invasion of the natural rights of those independent discoverers of an idea or an invention who made the discovery after the patentee.(12)
Like so-called “free trade” agreements, these patents have been enforced by the governments of the world, through global agreements such as GATT, to ensure more monopolies of the multinational corporations over what should be natural rights of health, medical care, and technology. It actually prevents a free market from operating to its full potential, because it suppresses innovation and imposes barriers on free competition. It is imperialistic, as for example it has prevented the natural right to health for people throughout the world, particularly sub-Saharan Africa, by allowing the multinational corporations to control the medicine and resources. Usury exists because the state stifles free competition.
This economic imperialism operates likewise through the usurious loans the International Monetary Fund (IMF) levies on the “third world” nations. Rather than attracting investors as part of the capitalist phantom of “development,” it actually cripples those nations with an interest that far exceeds the amount borrowed. This is surely part of the emerging Global State, with an even greater concentration of wealth into the hands of a few yet extrapolated on a global scale. These internationalist institutions make important decisions behind closed doors, yet their policy decisions are implemented by governments. It is no longer about the “first world” nations lending to the “third world” nations. “The IMF is now in the position of dictating policy to the governments of debtor nations and not just in the third world.”(13)
Impressive accomplishments have occurred in the so-called “third world” nations, even while poverty remains. The causes of this poverty is not through any inherent fault of the people themselves, but rather a collusion of the governments at the top with multinational corporations and Western banking interests. And this phantom of “aid” has merely led to proliferation of government corruption and compounds the economic problems of those nations, whether it is usurious loans or grants which nevertheless always have strings attached. “Aid is defined as the sum total of both concessional loans and grants. It is these billions that have hampered, stifled and retarded Africa’s development.”(14) Western liberal humantarian do-gooders are inherently paternalistic, and they promote policies that can only be described as economic imperialism.
There has been a massive centralization of the power of the state, which historically occurred with the transformation of government by merging with banking, which created the modern state, as well as its transformation of the subject into a citizen. This process is also closely intertwined with usurious economics. It also created a new administrative apparatus based on budgets and regularity created by covering the deficits with paper-money. Indeed, the creation of money out of nothing has been crucial to the state’s centralization of wealth.(15)
The problem of these monopolies are naturally founded upon the money monopoly, and it is opposing the money monopoly that must be our first consideration. As Proudhon noted, this monopoly has created a false scarcity of money, so that if other monopolies are addressed before tackling the rule of usury, it would only intensify this scarcity by leading to an excess of imports over exports. Likewise, without first ensuring the free trade in money at home – or the right to choose one’s medium of exchange – it would force workers adrift to face starvation.(16) Usury is at the root of economic exploitation.
In conclusion, the centralization of wealth into a class hierarchy is due to state intervention in the market – which is the very antithesis of a free market – to protect the ruling class, through the following means: using a money monopoly of usury and the central banks controlling the right to issue and circulate the only allowable medium of exchange; granting patents and subsidies to favored corporations; imposing discriminatory taxation; and intervening militarily in order to gain access to international markets.(17)
NOTES:
(1) Benjamin Tucker, “State Socialism and Anarchism: How Far They Agree & Wherein They Differ,” Liberty, March 10, 1888.
(2) Kevin Carson, “The Subsidy of History,” The Freeman, Vol. 58, No. 5, June 2008.
(3) Murray Rothbard, Power and Market: Government and the Economy, Kansas City, MO: Sheed Andrews and Mcmeel, Inc., 1970, p. 68.
(4) Kevin Carson, Studies in Mutualist Political Economy, Fayetteville, AR: 2004, p. 205.
(5) Albert Jay Nock, Our Enemy, the State, Delevan, WI: Hallberg Publishing Corp., 1983, p. 41n.
(6) Benjamin Tucker, “Economic Hodge-Podge,” Liberty, October 8, 1887.
(7) Carson, op. cit., p. 220.
(8) Benjamin Tucker, State Socialism and Anarchism And Other Essays, Colorado Springs, CO: Ralph Myles Publisher, 1972, p. 6.
(9) ibid., p. 19.
(10) Carson, op. cit., p. 230.
(11) ibid., p. 224.
(12) Rothbard, op. cit., p. 71.
(13) Ibrahim Lawson, “Economic Imperialism,” in Banking: The root cause of the injustices of our time, eds. Abdalhalim Orr and Abdassamad Clarke, London: Diwan Press, 2009, p. 124.
(14) Dambisa Moyo, Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa, New York: Farrar, Straus and Giroux, p. 9.
(15) Umar Vadillo, The Esoteric Deviation in Islam, Cape Town, South Africa: Madinah Press, 2003, pp. 164, 326.
(16) Tucker, “State Socialism and Anarchism,” op. cit.
(17) Kevin Carson, “The Iron Fist Behind The Invisible Hand,” <www.liberalia.com/htm/kc_iron_fist.htm>.