The fact is that the government, like a highwayman, says to a man: “Your money, or your life.” — Lysander Spooner

This post is the third in a series on free-market money. In the previous post I laid out the concepts of work, value, and price. We answered the question “why did you go to work today” by referencing values. But where did those values come from, and what does this imply? We need to expand the concept of value to fully understand free market money, and how to achieve it. That is the subject of this post.

Economics & Ethics

As important as it is, the scope of economics is limited. It has a lot to say about means, but less to say about ends. For Mises, a man’s ends are assumed as given; man acts to attain ends, but the Misesian economist does not judge the ends as “right” or “wrong”, “good” or “bad”. It can at best inform whether a man’s means are appropriate to the ends chosen — economics is not a normative discipline.

But economics is not everything. There certainly are good and bad actions in the world, even if economics remains a value-free science with respect to them. A man’s means can be bad even if they achieve his ends. And a man’s ends themselves can be bad. To understand this, we must turn to morality and ethics.

In general “ethics” are generally understood as pertaining to interpersonal relations, where “morals” are typically more personal. The terms can be used somewhat interchangeably, however, as I will in this post.

Contemporary scientific communities typically classify ethics as a subjective field of study, limiting its scope and relevance. This is wrong. Ethics are definitively objective, and this fact does not depend on religious notions; the nature of ethics can be discovered through man’s reason alone. This is the field of natural law.

Natural Law

We see in the world a variety of distinct elements, compounds, lifeforms, etc, each possessing a given nature — inherent qualities and attributes. The physical sciences explore and catalog the nature of physical things. Of course not all things are physical. Logic for example, is not physical, but is none-the-less worthy of inquiry and study.

Like all things, man has a nature. Man’s nature includes, but is not limited to his physical makeup. The social sciences explore man’s non-physical nature. We discover through reason that part of man’s nature is that he acts to achieve ends. Just as man’s physical nature is inescapably subject to physical laws, so are man’s actions inescapably governed by law, natural law.

Natural Law: Principles of human conduct that are discoverable by “reason” from the basic inclinations of human nature, and that are absolute, immutable and of universal validity for all times and places.— Edwin W. Patterson

Natural law is a study of cause and effect, specifically within the context of human action. Certain causes have certain effects, including affecting man’s happiness.

This is the foundation of what we call ethics, or natural law…demonstrating that this or that action tends to man’s real happiness, and therefore very justly concluding that the performance of it is a part of the law of nature; or, on the other hand, that this or that action is destruction of man’s real happiness, and therefore that the law of nature forbids it.— Sir William Blackstone.

Philosophers have long debated the nature of ethics, and what constitutes happiness, or “the good life”. Despite the many differences in opinion, theory and history affirm the following:

Man requires scarce goods to sustain life (part of his physiological nature) Man employs means to achieve ends (part of his praxeological nature) Man’s primary means are labor (his nature) and land (external nature) Man’s primary end (so long as he chooses) is to sustain his life

Synthesizing the above, the primary “good life” is man employing his labor and nature-given resources to sustain his life.

Although sustaining one’s life is not one’s only end, that seems a good place to begin when developing a human ethic based on natural law. Man must be unrestrained from employing his labor and nature-given resources to sustain his life. But what about going beyond simply sustaining life, and what about interpersonal considerations?

Natural Rights

Man has, through reason and experimentation, discovered physical laws to aid him in the physical domain. There are right ways and wrong ways to accomplish certain physical designs, rightness being governed by the laws at hand. The same exists for the domain of human action, rightness being governed by natural law.

Human action is “right”, “moral”, and “ethical” when it accords with natural law. The set of all such right actions, we call “rights”.

Human action is “wrong”, “immoral”, and “unethical” when it prohibits a man from acting within his rights.

When we say that one has the right to do certain things we mean this and only this, that it would be immoral for another, alone or in combination, to stop him from doing this by the use of physical force or the threat thereof. — James A. Sadowsky, S.J.

All laws, fully understood, are universal, including the natural law that governs human behavior.

Despite Kant’s failings, his famous categorical imperative — that one should act only according to that maxim whereby you can, at the same time, will that it should become a universal law — provides a reasonable framework for a non-contradictory interpersonal human ethic.

The “good life” discussed above expands to the “good society” to the degree that its members are secure in their natural rights. In our discussion above we limited the scope the good life to be a man unrestrained from employing his labor and nature-given resources to sustain his life. Of course, there is no logical break point that separates merely surviving from fully thriving. Man seeks not only to sustain his life, but his lifestyle, and so long as he does not interfere with his fellow man in doing so, his actions accord with natural law.

In other words, all men should be at liberty to pursue their happiness, provided they do not restrict others in the same. In the words of the Declaration of Independence, these truths are self evident.

Positive Law & Violence

Law is two-fold — natural and written. The natural law is in the heart, the written law on tables. All men are under the natural law — Saint Ambrose

Given the existence of natural law and its accompanying natural rights, how do governments, states, and the endless “laws” erected by man, fit in?

In short, they don’t. But it’s a little more nuanced than that.

Ask a hundred people on the street what “the government” or “the state” is and you’ll get at least that many different answers, but they will probably have a common thread — it’s the people and/or laws that regulate society in a given territory. Regardless of semantics, the colloquial understanding of “the government” and “the state” generally includes two concepts: people and law.

In the literature, natural law is usually contrasted with positive law. Whereas in natural law people discover law(s), in positive law people decree law(s) — they say what it is, literally defining it, as they presume. Hence the name “positive” law; a man posits a law, and henceforth expects, or rather, demands, that others obey his decree.

There are two possibilities regarding the relationship between natural law and positive law. Either the positive law embodies and codifies natural law, or it does not. In the former (not likely or common) case, positive law is at best illuminating as a form of education, more likely simply being superfluous owing to the fact that most people understand natural law through common sense. In the latter (likely and common) case, positive law contradicts, or “violates” natural law, and is thus immoral, unethical, wrong, bad, whatever word you want to use.

When you see two men fighting, you may say “this is violent”, and therefore conclude that it is wrong, bad, etc. But is it? The correct answer is “it depends”. It depends on whether or not the fight is voluntary. You see, violence implies an assumed law. If the two men are professional boxers who have voluntarily agreed to fight (for their income and others’ entertainment for example) it is not violent, at all. It does not violate natural law. If, on the other hand, one of the men initiated the fight against the other man’s will, then he is violent — he violates natural law. In either case, it’s not the fight that’s violent; only people can be violent.

Law & Order

Why does all of this matter? What’s the point?

Most people want to live peaceful, prosperous lives marked by justice and order. Yet, the ideal seems so elusive. Why? Because too many have rejected the natural law ethic. They have instead embraced the positive law ethic — what is “law” here is not law there, what is “right” now is not right later — this is neither law, nor order.

Our “governments” are imposters — cheap, yet magnificently dangerous, counterfeits for law and order. They are the not simply inefficient providers of justice and protection, bumbling about with good intentions, they are a walking (sometimes marching) contradiction. They claim to protect your rights, and that their laws are necessary for peace and order. Nothing could be further from the truth, by their very nature they cannot:

This theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: Your money, or your life. And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the road side, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful “sovereign,” on account of the “protection” he affords you. He does not keep “protecting” you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave. — Lysander Spooner

Too many of us have been duped, seduced by a small band of robbers that maintains sole control of the government. If the situation were not so tragic it might be laughable — men promising “hope and change”, and to “make America great again” through violent means. It cannot happen that way, and we cannot afford to be duped any longer. It can only happen through refining our understanding of natural law, and adjusting our values accordingly.

Vicious means cannot yield virtuous ends. We can’t expect governments that violate our natural rights to protect our natural rights; we must employ appropriate means. Economics, properly understood, can help inform our means. Ethics, properly understood, can help inform our ends. Money is one of society’s most powerful means, but it can be used for both good and bad ends. Choose your end, and choose your means. Let us choose FREEDOM as our end, and free-market money as our means.

Looking Ahead

In the next article(s) we’ll look closer at how governments have historically transformed free-market money into a tool that enriches themselves at the expense of society. Using this as a backdrop I’ll offer a framework for modern-day free-market money projects (cryptocurrencies), and how they can avoid the fate of monies of the past.

Despite any desire to the contrary, free-market money is not and cannot ever be simply a value-free economic matter. Its very nature involves ethical considerations, and its chief competition (state-issued money) uses moral arguments as its primary weapon.

State-issued money relies on government for its success. Similarly, market-issued money needs a mechanism for good and proper governance, not just as it relates to technical needs, but also (and more importantly) as it relates to social needs. We can hope for a future separation of money and state, but there can never be a separation of money and morals. The fate of money goes hand in hand with the fate of social government.