In the Best of Times,
Under the Best of Conditions

Part 1 of 2

Edward J. Dodson

[1997]

Private Virtues and the Stateless Society
Part 1

Government is no farther necessary than to supply the few cases to which society and civilisation are not conveniently competent; and instances are not wanting to show, that everything which Government can usefully add thereto, has been performed by the common consent of society, without Government. [Thomas Paine]

History has shown that the state, as a socio-political entity charged with enforcing sovereignty over both territory and individuals, has most often been characterized by corrupt leaderships often also tyrannical and authoritative. History substantiates the age-old truism: power corrupts, and absolute power corrupts absolutely. Another way of looking at this aspect of history is that oppression has become more systematic and less random, more subtle and less overt, yet no less unjust than in times of public tortures and executions. This is most easily observed in the societies having adopted the voting franchise and other socio-political institutions that mitigate brute force and the exercise of criminal license in the name of governance. It is only natural, then, that an intellectual tradition in opposition to the existence of the state would arise and gather force.

By the late seventeenth century John Locke had already set in motion the mind set of intellectual dissent in the socio-political arena by maintaining that government was legitimate only so long as justice was preserved by the acts of those who governed. "Where there is no longer the administration of justice for the securing of men's rights," declared Locke, "nor any remaining power within the community to direct the force or provide for the necessities of the public, there certainly is no government left." What prevails, of course, is the power attached to the police state and the level of fear instilled in the citizenry by those who hold power. Under such conditions, those who champion any movement toward justice do so at great peril; many such individuals have perished for the cause of liberty. Fortunately, the idea of liberty could not be squelched. Others always came along to rediscover the core of transnational values grounded in the spirit of the individual.

Those individuals who throughout history have condemned statist power as inherently tyrannical -- as the enemy of liberty and in the aggregate as institutions of coercion -- have often been labeled as anarchists, as those who would destroy order and bring chaos upon the naive. What the intellectual leaders of this æanarchist' movement -- past and present -- have actually concluded from history is that justice has seldom been secured and has never been secure so long as some had acquired the power to rule over others. Where the legitimate role of the government official is to serve the citizenry, those who acquire positions of authority within the apparatus of the state too often find the unaccountable power a corrupting influence. Corruption is criminal license rationalized as the standard for accomplishing the business of governing.

Revolt has, of course, been the key hope of the disfranchised and those discontented with the centralized state . We in the United States have served as a primary, if poorly understood, example of the good that might come from popular uprisings. Similar sentiments spread throughout France in the late eighteenth century (and in Russia a century later). Hope that the violent overthrow of the existing regime would bring justice turned out to be unrealized, as hereditary tyrannies were replaced by different but no less tyrannical leadership structures, an all too familiar occurrence in history.

In the search for stateless justice, we find a rather direct line of progressive, anarchistic thought that has its origins in the literature accompanying what too many historians blindly call the American Revolution. Old World ideas about liberty had been nurtured in the North American colonies of Britain, where the long arm of the English state remained weak. As the fever for independence grew among the colonists, the arrival of Thomas Paine from England added the rather remarkable talents of this dissident practical philosopher to the cadre of voices emerging from the wilderness. Paine arrived heavily armed for the struggle. Concerning the history of the state, and of those who had governed, he would write:

There never did, there never will, and there never can exist a parliament, or any description of men, or any generation of men, in any country, possessed of the right or the power of binding and controlling posterity to the æend of time', or of commanding forever how the world shall be governed, or who shall govern it; and therefore, all such clauses, acts or declarations, by which the makers of them attempt to do what they have neither the right nor the power to do, nor the power to execute, are in themselves null and void. Every age and generation must be as free to act for itself, in all cases, as the ages and generation which preceded it. The vanity and presumption of governing beyond the grave, is the most ridiculous and insolent of all tyrannies.

Paine was indeed a dangerous man to those anywhere who possessed power held on weak or nonexistent moral grounds; which, at the time, was virtually everywhere. "That government is best which governs least," advised Paine, understanding more intuitively and explicitly than most that the new Constitution for the united States might eventually destroy what armed conflict had won for the newly freed European-Americans.

As the flame of rebellion overtook the French, Paine stood firm against the attacks of the renown English conservative Edmund Burke, who had earlier defended in Parliament the rights of the European-Americans to equality of treatment under English law. Burke now chastised the French for destroying the very institutions on which, in his view, their future happiness depended. Written as much to quell the growing radicalism in his native England as in abhorrence to the actions of the French people, Burke admonished Britain's Jacobins (i.e., those looking for a French solution to their struggle for greater liberty and participation in government) not to forget that the English republic had prospered out of a foundation of compromise. The reformers, with Paine at the forefront, demanded the restoration of ancient liberties taken away by tyrannical monarchs and parliaments who molded the law for to cement their own privileges. Conservative elements in England would have none of it; they still held the same views toward their own people as they had held toward their former colonial subjects in North America. England's ruling class was not about to allow its power to slip away thru a conscious process of democratization. And so, there continued throughout Eurasia a growing climate of unrest, of political destabilization and potential ruthlessness on the part of both ruled and rulers.

Among those who championed dramatic changes to the Old World's political systems was yet another Englishman, William Godwin -- a minister turned writer, unknown in the realm of ideas to that point in time. Strongly influenced by Paine's Rights Of Man, Godwin in 1793 introduced two volumes entitled An Enquiry Concerning Political Justice, in which he set down very specific principles by which a society might be measured as just:

The most desirable state of man, is that, in which he has access to [essential] sources of pleasure, and is in possession of a happiness the most varied and uninterrupted...

Government, as it was forced upon mankind by their vices, so has it commonly been the creature of their ignorance and mistake. Government was intended to suppress injustice, but it offers new occasions and temptations for the commission of it. By concentrating the force of the community, it gives occasion to wild projects of calamity, to oppression, despotism, war, and conquest. By perpetuating and aggravating the inequality of property, it fosters many injurious passions, and excites men to the practice of robbery and fraud. Government was intended to suppress injustice, but its effect has been to embody and perpetuate it. ...

The exertions of men in society should ordinarily be trusted to their discretion; their forbearance, in certain cases, is a point of more pressing necessity, and is the direct province of political superintendence, or government.

Godwin's ideas were absorbed into the growing body of anti-statist literature, ideas that would be refined and redefined during the next half century. In his analysis of the democratic experiment in the united States, Tocqueville would later conclude that "system[s] of castes and classes would undoubtedly disappear only by greater force." Less than a quarter century later, the anti-statist tradition found a new champion and creative voice in the person of Pierre Joseph Proudhon, who, from prison in France, denounced the state and called for the creation of socio-political arrangements and institutions based on the concept of Mutualism. Proudhon's vision of the just society was both stateless and cooperative, in the highest moral tradition of anarchist design. Proudhon was to become an important influence on European intellectuals ranging from Karl Marx to Leo Tolstoy. His ideas and detailed plans have the sound of practical application of principle that provide an important framework for contemporary discussions of reform.

Mutualism survives today in the movement for the creation of self-sustaining communities, of what is called Decentralism. People concerned with the loss of human scale and absence of community are voluntarily decided to come together to create what they feel is missing elsewhere. While some reject materialism, most Decentralists strive to make efficient use of natural and technological resources in ways that support rather than destroy habitat and the ecosystems in which human communities are established. And yet, there is no true escape from the state. There is no sovereignty granted or protected for people who seek to follow their own course as a group. The coercive power of the state is a constant, mitigated more or less effectively by countervailing power and, to a lesser extent, the inherent inefficiencies associated with bureaucracy. Even where the state is least able to act without impunity, the continued failures of governments to meet the challenge of protecting individual liberties (i.e., of serving as an agent for those who exercise both criminal and economic license) argues against the state as the appropriate organizational model for community and society.

Within the political framework of democratic-republicanism, the anti-statist tradition survives in modified fashion and has gathered momentum under the Libertarian banner (itself incorporating a range of socio-political philosophies and public policy agendas). At the heart of the Libertarian idea is the sense that only voluntary association provides the basis for a just society. The historical dilemma, libertarians point out, is that socio-political arrangements -- even those instituted by majorities after prolonged conflict -- do not follow the Mutualist, cooperative path. The historical tendency for socio-political development is to toward systems characterized by factionalism and centrist power vest in the hands of a relative few. Therefore, even if the Libertarian (or any other) model for the stateless society were found to be theoretically sound, the monopolistic tendencies in man and the socio-political institutions constructed to defend entrenched privilege place enormous roadblocks in the path toward statelessness. Or, so most of us believe. Putting such a scheme into practice is certainly quite difficult; however, under the right circumstances, there is reason to believe the task is not impossible. The challenge is to account for that side of the individual behavior directed by unenlightened self-interest.

Within the community of reformers wanting to move societies toward a socio-political structure that reduces the power of the state and returns to the individual the liberty that is our birthright, there is much disagreement over what is required to establish and maintain a just society. The remainder of this paper presents one vision of the future, a future based on a contract-based society in which the state is not permitted to interfere in the private affairs of individuals. The purpose of this story is to stimulate discussion and foster the process of consensus-building. The reader is encouraged to contact the authors and to participate in an ongoing dialogue and exchange of ideas. And so, our story begins.

SECOND CHANCE FOR A DISPLACED PEOPLE ....

Imagine if you will that the land in which so many Irish Catholics and peasants sought refuge from persecution and deprivation was not the North American continent, but a distant and uninhabited island out in the middle of the Atlantic Ocean. Irish seamen repeatedly told stories of visiting this distant island to the west, where Norse explorers had encamped but never settled or exploited. Using ancient Norse maps they assured their fellow countrymen the island could again be found.

Some tens of thousands of peasant farmers, craftsmen, seamen, clergy, teachers and merchants -- Irish from all walks of life and their families -- banded together, forming a charter company in which all became shareholders in a mutual effort to build a new society in a land where the reach of external threats and the state would be far enough away as to be nonexistent. They would call this land New Eire. In planning how their new society would be organized, the settlers recognized all too well the terrible monopoly power of the state and its traditional trappings of monarchy, elitist parliament, state religion and entrenched privilege. Theirs would be a society based on principles of nonaggression against the individual and respect for property acquired by production or exchange. There would be no central governing body, no self-appointed ruling hierarchy, no police force controlled by the state and no courts with appointed or elected judges to interpret law without. Rather, each person would be a member of and own one share in the company to be formed. Competent adults would hold and vote their shares directly; incompetent members of the society -- such as children and the mentally handicapped -- would have the same rights, but as beneficiaries of special trusts, the trustees of which would be selected by lottery to serve one three-year term.

Upon arrival in New Eire, the island would be surveyed and sectioned off into parcels of approximately equal productive potential. A leasehold estate of twenty-five years for each parcel would then be awarded by the company at auction for gold or other commodities. Those who had no material wealth could still compete for these leaseholds, provided they were able to secure letters of credit from others who would agree to insure the payment of annual lease payments. And, such payments were to be adjusted every year based on the bids received at ongoing auctions. The terms of the lease would not prohibit the lessee from assigning rights of usage or occupancy to a third party. The charter provided that company directors would be selected at random from the shareholders to serve terms of three years. Directors would be prohibited from succeeding themselves in office, thereby preventing any faction from gaining control over the company and changing its organization and structure. Recognizing full well the importance of a sound money system, the shareholders also authorized creation of a wholly-owned bank of deposit with powers to store gold, silver and other precious metals and to issue assignable certificates of deposit. The bank would also be authorized to issue coinage or make loans against any reserves it accumulated from fees charged depositors or earned from other services performed. The organizers of New fire were fairly certain that during the initial stages of development the gold and silver received from the auctioning of leaseholds would satisfy their needs for money. Until then, the settlers would be free to barter with one another. They were hopeful that the island might hold new supplies of precious metals that could be exploited. Settlers would be free to form their own banks of deposit if they so chose, or simply establish lending institutions based on the balances they owned within the company's bank of deposit. The case for competition was strongly made by those who had been victimized by the Old World's banking practices and banks that simply printed paper notes not backed by actual wealth. Regular auditing would ensure the banks of deposit were not issuing paper notes beyond the quantity of precious metals held in reserve.

Each year the shareholders would vote on proposed expenditures for the development and maintenance of infrastructure on the island. The shareholders would also approve compensation packages to senior executives recommended by the board of directors. Based on a presentation of the company's general financial strength, the shareholders would also vote for or against a dividend payment.

Because New Eire would have no government outside the shareholder-owned charter company, individuals would not be subject to taxation. The charter company would hold title to all of New Eire, and have full control over access to the waters surrounding the island. With shareholder approval, the charter company officers would auction leases to those interested in fishing, mining, aquaculture or other economic activities requiring access to the island's water ways, lakes or the surrounding ocean waters. Remembering how intense and careless use had fouled Ireland's waters, the leases carried with them regulations imposed to prevent these problems.

Other than regulations associated with health and safety, commerce would be completely free from interference. Disputes arising between parties would be settled by privately contracted arbiters, the need for such services stimulating competition among individuals to offer themselves as professional arbiters in the market. Individual property owners would also be at liberty to establish rules of behavior for those who desired access to the lands they held under lease or to use of improvements (i.e., their personal property) constructed. Failure to adhere to contracts would be dealt with primarily by denying future access and/or by negotiated financial settlements. An obvious consequence of not respecting the property of others would be wholesale banishment -- - as, one by one, property owners would refuse to deal with those who were known not to fulfill their contractual obligations. At the same time, property owners dependent upon commercial activity for their livelihood would adopt rules of usage designed to attract others. In this way certain voluntary standards would come to be accepted by the society. And, in the process, New Eire would be established on principles of private association, without the presence of a public sector.

Confident in the structure of their new society to protect individual liberty, the settlers were almost ready to set sail. However, despite their feelings of solidarity and kinship, some discontentment arose among those making the greatest contributions in resources and labor to the voyage. A general meeting of the shareholders was held and a decision was reached to compensate each person by awarding them a special class of nonvoting shares in the charter company based on an agreed-upon value for their contributions; these shares would be added to the total shares outstanding for purposes of the annual distribution of profits. This final problem resolved, at long last the settlers left Ireland and Eurasia forever in search of New Eire. Some fifty days later, they gathered on the decks of their vessels; land had been sighted on the horizon. All their dreams and hopes would, they now knew, depend on what they found in this new land.

The main ship, the Dublin, followed the island coast south, locating a deep water bay that narrowed some miles inland into the mouth of a wide and navigable river. The landscape, though tree covered, rolled gently away from the river's banks and then began to rise slowly into rolling hills. Higher peaks were visible in the far off distance. A decision was made to disembark at this place to set up a temporary encampment, search for food and water and begin the tasks of surveying the area and building temporary shelters. Several months passed during which most of the island was explored and thoroughly mapped. Its size was estimated to be around 32,000 square miles (roughly the same land area as their former homeland). Although heavily forested and apparently rich in mineral resources, other similarities in climate, rainfall, soil fertility, plants and animal life were also reported. From this information the island was divided into parcels as contemplated. In this manner, the parcels best suited for agriculture were smallest in areas evidencing great fertility and larger as the parcels decreased in fertility and other natural advantages. This attempt to equalize inherent advantages was also carried into the parceling out of land for the building of the first town and headquarters of the charter company. The shareholders also voted to preserve much of the bay and riverfront land as open space. They decided to build their town on higher ground, away from any danger of annual flooding. From one of the shareholders came a call for planning:

Let the rivers and creeks be sounded in order to settle a great towne. Be sure to make your choice where it is most navigable, high, dry and healthy, Let every house be pitched in the middle of its plot so that there may be ground on each side for gardens or orchards or fields, that it may be a green countrie towne that will never be burnt and always be wholesome.

The first years were, surprisingly, not as difficult as many people thought might be the case. Conditions were primitive at first but still far better than many had known in Ireland. Those who purchased leases to farmland worked to clear the land for planting crops; others set about to ply their trade as craftsman, merchant, fisherman, teacher, physician, or other occupation. As the settlement grew and the first clearings yielded crops of wheat, vegetables, potatoes and fruits, a market began to grow at the center of the town, near the site of the company headquarters. Those who held leases to land in the immediate area now came together to discuss the future development of the town. Although a few shareholders had pooled used a portion of their balances held by the charter company's bank of deposit to form lending institutions, these resources were still far too little to accommodate the demand for construction loans. With shareholder approval, the charter company directors agreed to establish a loan fund, with loans secured by mortgages on improvements made by recipients. The shareholders voted to approve an initial fund of 100,000 Ounces, awarded to the higher bidding borrowers (subject to their ability to meet pre-established credit worthiness requirements).

The memory of the Great Plague and other disasters that befell Eurasia were not, if they could help it, to be repeated in New Eire. The bank of deposit's loan terms stipulated certain distances had to be maintained between buildings and required the owners to find a way to discharge wastes without infringing on the leasehold rights of others. As the building began, some shareholders joined together forming ventures to offer property owners such services as a sanitation system, insurance against losses from natural disasters and other risks, security against property theft and schooling for their children. Some of the more far-thinking formed new partnerships and shareholder-owned companies, pooling their resources to sublease locations in the town and across the island to exploit natural resources. One group of investors obtained interim easements from lessees -- and permanent easements thereafter from the charter company -- to construct roadways connecting the distant parts of the town. A user fee was then charged for use of the roadways. All across New Eire, enterprise after enterprise arose, trade and exchange expanded rapidly, and the people of New Eire began to experience a standard of well-being never thought possible when back in Ireland. They had created a society built on contracts, on private arrangements and without the hierarchical institutions of the state.

As time passed, the more enterprising individuals gradually acquired control of more and more of the land of New Eire. However, unlike the wealth concentration that plagued the Old World, the leasehold fees generated continued to provide a substantial dividend to each shareholder. At the time of settlement, the original settlers had bid for access to parcels amounting to only about 1 percent of the island's total land area. As population increased and business activities expanded, the value of the charter company's land holdings quite appropriately increased. Continued hardship and political oppression back in Ireland brought new arrivals at an ever increasing pace. In less than 100 years the population reached 5 million. Leases to virtually all the land area of New Eire had been auctioned, re-auctioned and re-auctioned again; and, as a result of a constant demand, ground lease fee income (i.e., rents) became a very significant portion of the personal wealth of individual shareholders. Also, because the company's earnings were growing beyond the dividend needs of most shareholders, a larger and larger portion of this income came to be invested in various businesses and development ventures.

Descendants of the original settlers and families had not only acquired their own parcels of land but had inherited leaseholds and improvements made on the land. What few poverty-stricken there were found sympathetic care from the charter company's charitable foundation, and from other privately-funded and operated charities established with bequests from persons who had no heirs or wished to set aside all or a portion of their property for special purposes. One of the wealthiest entrepreneurs from New Eire's first generation established a fund under which most of the income was used to retain leaseholds of mountainous areas and preserve them as wilderness for scientific study.

Throughout its first century, conditions in New Eire resembled the very idyllic state of affairs as seen by Thomas Jefferson, one of the North America's great practical philosophers, who wrote in 1814 about the new united States of America:

We have no paupers, the old and crippled among us, who possess nothing ... being too few to merit notice ... The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property; cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families... The wealthy, on the other hand, and those at their ease, know nothing of what the Europeans call luxury. They have only somewhat more of the comforts and decencies of life than those who furnish them. Can any condition of society be more desirable than this?

IN THE LONG RUN ...

The societal plan described above is one that has never existed but which reflects a specific set of voluntary arrangements quite different from the natural development of social groups, as revealed by an examination of history. While far from doctrinaire libertarianism, the structure of New Eire maximizes individual liberty within a framework of control based on private arrangements. I have gone beyond what most Libertarian proponents would proscribe insofar as equality of opportunity is concerned by excluding the issuance by the charter company of titles to nature in favor of leaseholds awarded by auction. Citizenship is replaced by shareholder rights; the concept of representative democracy is replaced by direct participation in company decisions of major importance. There is no government, but there is governance.

The question before us is whether this societal structure generates and secures equality of opportunity over the long run? Or, will the people of New Eire eventually experience a gradual corruption of the contract-based arrangements under which they live. Is this structure strong enough to weather attacks by those who will surely arise to attempt to gain more than their exertions deserve? What, to raise another issue, will happen to the wages of labor? Will they remain high or begin to fall as a rising population intensifies the competition for employment opportunities? Or, will population increase be more than offset by the increased demand for labor and result in higher wages? How the future progresses will certainly have an impact on the receptivity of shareholders to issue additional shares of stock for new immigrants, or permit immigration at all.

This hypothetical world of New Eire offers us an opportunity to examine the impact of the advance of population, technology and knowledge on a model that is very different from that envisioned by the visionaries of societal ownership of nature, such as Henry George. In this experiment, every person is a stakeholder in the entity created. Every person shares not only in the rental value of locations and natural resource lands but in the income generated by the charter company's investments in the development of infrastructure.

To some, the era of Jeffersonian leadership over the early nineteenth century united States provided a similarly unique workshop, within which people lived almost beyond the reaches of the state. The vast natural frontier served as a safety valve for population growth, an escape from socio-political institutions of the East already considered by many European-Americans ascorrupted by the lingering foundations of the Old World. The historian Frederick Jackson Turner argued, in fact, that the spread of democracy and the existence of the frontier were exorably intertwined:

From the beginning of the settlement of America, the frontier regions have exercised a steady influence toward democracy... The democracy [was] a democracy made up of small landholders, of the newer immigrants, and of indentured servants, who at the expiration of their time of servitude passed into the interior to take up lands and engage in pioneer farming...

Indeed, in the period before the outbreak of the American Revolution, one can trace a distinct belt of democratic territory extending from the back country of New England down through western New York, Pennsylvania, and the South. In each colony this region was in conflict with the dominant classes of the coast. It constituted a quasi-revolutionary area before the days of the Revolution, and it formed the basis on which the Democratic party was afterwards established. It was, therefore, in the West, as it was in the period before the Declaration of Independence, that the struggle for democratic development first revealed itself, and in that area the essential ideas of American democracy had already appeared...

Those revolutionary principles based on natural rights, for which the seaboard colonies were contending, were taken up with frontier energy in an attempt to apply them to the lands of the West.

In the West (which, as Turner reminds us, represented virtually the entire continent beyond the eastern seaboard) the frontier was tamed by individuals who formed small, loosely knit communities. After the first generation passed on, these European-Americans had no experience with European-style government with which to contend. Their environment was in many places harsh and unforgiving; yet what they produced was theirs to keep and the frontier provided what seemed an infinite bounty for anyone willing and able to apply their labor to the land. For the population of New Eire, protected from outside intervention by ocean waters and by a corporate charter from the encroachment of a privileged elite, the advance of their society stood a very great chance of achieving and maintaining remarkable liberty and equality of opportunity.

The inventiveness and ingenuity of the people of New Eire would be encouraged under a structure of voluntary association that did not coercively interfere with the exercise of individual liberty. A visitor would certainly observe that there seemed to be some guiding force at work within the nature of each individual heretofore subdued. This human characteristic is described by Henry George in this way:

Men tend to progress just as they come closer together, and by co-operation with each other increase the mental power that may be devoted to improvement...

Adam Smith thought of this in terms of an invisible hand guiding the actions of individuals toward cooperative effort. And, within an environment of maximum individual liberty, the cooperative instincts of humankind seem to rise with the individual's sense of well-being and security. Nevertheless, a very real problem remains for the people of New Eire.

PART TWO