Enclosure Revisited

The post on amending our social order by enclosing the commons generated by the universal franchise provoked an animated discussion, not just at the Orthosphere but in the comments thread of a post devoted to the proposal over at Nick Steve’s site, The Reactivity Place. I also had some interesting email exchanges with Orthosphere readers on the proposal. Out of these various threads, there are four topics that I think merit further discussion.

The first and most important thing I should like to say is that the proposal to enclose the commons is not intended to heal all our woes. Christ is in charge of that. If the commons were enclosed, people would still be wicked, stupid laws would still be passed, there would still be social conflict and disorder all over the place – things in general would be just as problematic as they have ever been. The only thing that enclosing the commons would fix is the tendency of polities governed by an electorate composed of just everyone who can fog a mirror to vote themselves into economic and moral catastrophe (NB: “economic catastrophe” is another way of saying “moral catastrophe”). That vicious cycle would be replaced by a cycle that moved in the opposite direction. Don’t get me wrong: that’s a lot of fixing. It would do us a lot of good. But enclosure would not usher in the Golden Age, it would just make us all a lot more prosperous, sane and prudent than we now are, *so that* we could all get on with the business, mess, and moral challenge of life a bit more directly and efficiently.

In this, the proposal to enclose the democratic commons is no different than any other traditionalist proposal for the renewal and repair of the social order, from monarchy to subsidiarity, from hierarchy to patriarchy. Those traditions worked well, we would argue – this being the reason they became traditional – but they didn’t make everything all nice and self-actualized for everybody. That just ain’t in the cards for sublunary life. Commenter JM Smith beautifully expressed the properly modest ambitions of a truly traditionalist political project, that, like any such project, is subject to gnostic utopian temptations:

As traditionalists we are in danger of equating a return to tradition to a return to prelapsarian existence, but as Christians we must refuse to make this equation. If every traditionalist plan were fully realized, the world would still be fallen and men would still feel alienated. This is why we are not like the communists or Nazis [or liberals, radical ecologists, & al. – K]. We propose no political solution to this problem of alienation …

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Terry Morris wrote me with a question about enclosure, that prompted some interesting further thoughts:

… my understanding is that one’s political rights under the system would be contingent [on] owning a share in the corporate body; that the sale of one’s share would divest [the seller] of direct political rights and influence [attached thereto] [yes, although not, of course, of his civil rights or duties, or of his indirect political influence (as, say, a blogger)], and that this would ultimately (long term) result in very good effects, not just for the society as a whole, but for the individual non-shareholder and his family as well.

The question [then was], “but then could one eventually buy back his share once he’d made the mistake of selling it?” I said that “yes, this is my understanding.” It occurred to me that one could even “mortgage” his share to a lender for whatever reason (say he wanted new carpet in his home, and a new Harley to ride or something), and that in so doing he would voluntarily suspend (or I guess transfer) his political rights as a condition of the loan contract. In any event, though, no one is harmed if the borrower decides at some point he just doesn’t want to pay the loan. He still has a Harley and new carpet, and the lender has yet another share in the corporation. My assumption is also that a single share (whatever its initial value is determined to be) could be sub-divided into half-shares, quarter-shares and so on.

But the one point I tried to stress … is that after so many decades in which we have systematically encouraged the masses to think and act irrationally, enclosing the commons would (not immediately, but over the long haul) introduce a fundamental change in this vein. … it wouldn’t be too awful long under the new system before people began to realize that it is in their interest to think and act rationally, instead of irrationally, and that this would result in a return to such things as traditional gender roles, the exercise of individual self-government (self-control; self-restraint), of keeping the government within strict limits, of paying the national debt, reducing the deficit, balancing local, state and national budgets, controlling the immigration problem, and so on and so forth.

I responded:

I hadn’t thought of splits in shares, or mortgaging. I see no problem with the latter, so long as ownership of shares is restricted to natural persons and no person may own more than, say, 1,000 shares. [But note that if I were to mortgage my share, I would still own it (as we now do the houses we mortgage), and so would still be able to vote it, and enjoy the dividends it generated, so long as I didn’t default on the note that it collateralized. In the event of default, I would lose the share to my creditor, and with it my franchise.]

Splits are interesting. [Upon consideration, I doubt they would work, or be a good idea – I think it best that total shares outstanding should track the number of natural lives in the polis.] I suppose all sorts of derivatives would arise, too: options, futures, and indexes – and then futures on those indices, and so forth. People might sell the income from their share for a fixed period without surrendering ownership of the underlying share.

The index of share value would be very carefully followed by the people, not just as an index of their personal wealth, but also as an index of the national health – rather as the DJ 30 and S&P500 are now followed. But popular interest in the national share index would be much more widespread than interest in the Dow.

There would presumably also be an index of expected dividends. If dividends were paid monthly, as I think makes sense [so as to tighten the feedback loop], then focus on national rationality would be *intense,* because every bit of financial, political or economic news would hit dividends almost immediately. Tornadoes in TX? Expect next month’s dividend to go down a bit, not inappropriately.

When tornadoes devastated the Midwest, no one would blame politicians or bureaucrats for the marginal hit to dividends in subsequent months. But there would be a great deal of attention to how the Federal funds allocated to disaster relief were actually expended. The news media would have a *huge* incentive to dig into the details of such things, far more than at present. Indeed, one of the most important sequelae of enclosure would be that the media, realizing that eyeballs were attracted to news of state irrationality, would dig for it like terriers. They’d emerge from the burrows with all sorts of rats. I.e., they would change sides in the culture war. Not because their moral or political convictions would have changed, mind you. It would just be good business for them, in just the same way that they are now interested in publishing stories that Drudge might find interesting to his readers.

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Over at the Reactivity Place, commenter Candide III suggested that enclosure of the type that I propose had already been tried after the collapse of the USSR, with perverse results; so that the Russian experience might constitute a counterexample:

After the break-up of the Soviet Union, Russia attempted to reallocate the capital of the nation by issuing shares in same (privatization vouchers) equally to all citizens. The results were instructive, but very much against the stated expectations of the reformers. Many of the greatest Russian fortunes were made in that time, as vouchers were sold or even traded for food by the sack or other necessities – say, a quarter-truckload of coal or a dozen square yards of slate, whatever was available to the “red director” managers.

There is however a crucial difference between the Russian experience and any similar measure that might be taken in the West, at least as things now stand: when Russia issued shares to citizens, the state owned *all* the productive capital, with the result that the *only* people in a position to buy shares were the nomenklatura who, under the old Soviet system, had run the country. When the nomenklatura purchased shares from the proletariat, they used the same blandishments they had always used to purchase slave labor: real goods, generally consumables necessary for life, that would not enable anyone in the proletariat to amass capital of their own.

In responding to Candide’s comment, Nick Steves already made this point. I believe it is crucial.

It is nevertheless interesting to observe what has happened in Russia since the privatization of the economy, even despite the fact that the privatization was botched. It’s not a bed of roses, but it is a lot better than it was, and private capital that is not under the thumb of the former nomenklatura has developed nicely. The Russians are learning. Russia has crawled back out of the grave.

After enclosure of any Western democratic commons, I would expect that many of the poor and foolish would sell their shares and squander the proceeds. But this would be their choice. At least as things now stand in the West, there would be nothing to prevent an enterprising young fellow from selling his share to raise capital to start a business. He would not be forced by the poverty, corruption and disorder of the surrounding society to trade his shares for bread or coal enough to survive for the next month.

Not yet, anyway. If something like enclosure is not soon initiated, we shall all soon enough be in a situation not unlike that of the proles in the latter days of the USSR.

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In the comments thread to the original post, Skeggy Thorson proposed another counterexample:

The East India Company, before Government intervention and the Hastings trial, was an atrocity, whose misrule led to the deaths of millions in Bangladesh alone. It was King George and his ministers that led to the better governance of India and the increased focus on missionary activity as a driving force for the Empire. In fact, the colonists often went native and engaged in polygamy. Furthermore, we know what unregulated economies look like. They involve every member of a household men, women, and children working 18 hours a day and eating food laced with the poisonous chemicals they had been working with. Thankfully Tory, yes Tory, M.P.s put a stop to it with regulations. Capitalism and all its associated evils is a whiggish position.

As with the counterexample proposed by Candide III, this is interesting and valuable. I don’t believe the misrule of the East India Company is an apt counterexample, but it does lead to some further thoughts.

The East India Company is not a good analogy to enclosure because ownership of the shares therein was not widely distributed among the people it governed. The executives of the Company had every interest in exploiting the economy of the subcontinent just as quickly as they could, before their privileged position in the catbird seat came to its inevitable end.

The predatory behavior of the East India Company is, in fact, rather a good example of what happens when the feedback circuit between governed and governors is severed, as at present in the West.

Skeggy inveighs against unregulated economies, but there is in enclosure no great likelihood thereof. The zero of regulation is chaos, which is extremely bad for business. Rational electors would not therefore elect it. They would elect *rational* regulation, that, by promoting virtue and true human flourishing across the population as a whole, optimized production and revenues.

I might as well take this opportunity to point out that there is nothing in enclosure per se to prevent electors from the institution of any sort of social order whatever; for, after enclosure, the Constitution would be under the control of the electors, as at present, and they could amend it as they wished, as we now may. There would be nothing, e.g., to prevent the electors of an enclosed democracy from instituting a monarchy, or a nobility, or an established religion. Nor for that matter would there be anything to prevent them from opting for pure communism, if they thought that a good idea. I doubt they would, because it would put their share value in the toilet. But they could.

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There is always an oligarchy. Some oligarchies are loyal to their subjects, and others are not. Either sort may be either prudent or imprudent.

The examples of the East India Company and of Russia after the fall of the USSR illustrate what can happen when the oligarchical function or office of a polity is hijacked by foreign invaders or domestic parasites, or by a pack of short-sighted fools. To prevent this from happening to an enclosed democracy, the number of shares that can be owned by any natural person should be strictly limited. What the right limit might be, I do not know. 100 shares? 1,000? It’s a good question for the mathematical end of political science, or (what is pretty much the same thing) the game theoretical end of economics.

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10 thoughts on “Enclosure Revisited

  1. Thank you for this clarification! I still think that there are some severe problems in attempting a partial systemic fix for what is at heart a moral failing. And I think we “traditionalists” tend to be far too ready to propose systemic fixes rather than accept the burden of getting on with individual and cultural moral exhortation — which is probably a sign of cowardice on our parts. (And is an indicator of the effect of progressivism, which always sees solutions to human problems in the abstract, material, and technical rather than in the personal and spiritual.) However, the way in which you’ve clarified your statements make your argument more clear and indicates you weren’t going quite as far as some of us were afraid you seemed to be. It’s heartening to see you respond cogently and without rancor to all of the argument and criticism this conversation has stirred up — definitely a good sign!

  2. Thanks for clarifying Kristor. Like you I think the analogies between Enclosure as it would happen today in the US and what transpired in the break-up of the USSR are not as close as strong as they seem at first glance. But there has been an alarming rate of socialization of (once) purely private or corporate business. We have essentially socialized TBTF banks. Obamacare socializes health insurance. Etc. We are becoming the Soviet Union. (Remind me: Who won the Cold War?) This means that if something like Enclosure ever occurs, the window for it happening in an orderly, relatively non-lethal, manner may be closing.

  3. The Skeggy Thorson comment is actually an endorsement of the “enclosure” idea. The East India Company was supposed to benefit the shareholders of the East India Company, and it did so remarkably well. The actual East Indians did not have shares in the company, and it is no wonder they were exploited.

    Now, in which situation do we find ourselves, that of the East India Company’s shareholders, or that of the East Indians? Mmmm…

    • Excellent question. Ostensibly, we are more like the shareholders of the East India Company than we are like the East Indians. But our oligarchs are trying to change that. They are hijackling the oligarchy.

    • My comment was meant more as a response to another commenter suggesting that the British rule of India was a net positive before the Crown and Whitehall got involved, in a discussion about the Enclosure causing more wars for profit. As for the author’s idea I am skeptical, but perhaps only because I am completely incompetent when it comes to economics. I only dislike completely free markets and their opposite extremes because they violate fundamental moral duties. Sorry if I caused any confusion.

      • No worries, Skeggy. Your input is welcome.

        How do free markets violate fundamental duties? Which duties? We’ve never actually had any free markets, but it is an interesting thought experiment.

  4. Well, it is impossible to expect every person to look up the company history and all the fine details of the products that they buy to make sure they are safe and it is quite easy to be confused into a contract that is not fair without it technically being the sort of outright fraud that would still be banned in free-market system. Furthermore, just as employees have duties to those who they are entering service to,namely to serve them dutifully and well, there employers have duties to their those serving them to treat and lead them well. Also, just as it is the duty of the intelligent to enlighten the ignorant and the strong to protect the weak, it is the duty of the wealthy to look after the poor. In a family it is ultimately the father who has to keep order and it is his duty to the rest of the family to make sure they are fulfilling their duties to each other. Likewise, it is the duty of the king to make sure his subjects are fulfilling their duties to each other. Also, he may be required to impose tariffs to secure his nation’s culture. And usury is evil and the such. I hope that is an adequate enumeration. It was a bit rambling because I cannot think of the names of the duties off hand at the moment.

    • OK. But those sound like defects of human beings, rather than defects of the economic system they happen to be defective in. I mean, all those defects – shoddy products, cruel employers, tendentious contracts, corrupt and selfish rulers, and so forth, were rampant in the USSR, and in every other economy that was characterized by pervasive state control. Far more so than in the somewhat more liberal West.

      Understand, I am not arguing for the free market, although I have little doubt that its operations would be more humane than those of any system of tyrannically controlled markets, which are far more vulnerable to corruption. Absolute power corrupts absolutely, and all that. Yet I do not argue that the market should be free, if only because it simply *can’t* be free. There is always an oligarchy. That this is so should convince us that the order of being is such that reality *wants* us to have an oligarchy. The question then is how to arrange things so that we are likely to get good, prudent, sapient oligarchs, who will find that their self-interest aligns with the interest of their subjects in their truest prosperity.

      • My ultimate point was that it is the state’s duty to make sure that its subjects are fulfilling their duties to one another. Obviously they will fulfill that duty imperfectly, as everyone fulfills their duty imperfectly. Communism also causes fundamental violations of the sovereign’s duty, in that it is their duty to protect their subjects property, which communist systems fail to do. I do not suggest total state control, merely that justice be performed to the best of the government’s ability, which, while allowing a certain amount of freedom, would still be incompatible with the designs of at least the more libertarian free-marketers. As far as oligarchs, while I think that what you say may be a good start, it is still necessary to imbue them with a sense of chivalry and noblesse oblige. How that would be achieved, I don’t have the slightest idea, but I don’t think any valuable improvements can be made without it. I realize it is popular amongst the more ecumenical adherents of the neo-reaction to look up to pagan Rome and Greece, However after close study of those cultures, I don’t see how they were substantially better than the Soviet union. I would rather have an incompetent ruler that at least tries to be just, over a cynical and self-interested, though brilliant, one. Better Henry VI than Napoleon. My apologies if I am misunderstanding or not making myself clear.

      • Don’t worry, Skeggy, you are being quite clear. You write:

        As far as oligarchs, while I think that what you say may be a good start, it is still necessary to imbue them with a sense of chivalry and noblesse oblige. How that would be achieved, I don’t have the slightest idea, but I don’t think any valuable improvements can be made without it.

        Amen, amen! Enclosure would be, just as you say, nothing more than a start. And it might not even be good: the human capacity for evil being what it is, there is every chance that it would be somehow corrupted from the very start, and ruined. It would at least however provide an opportunity for us to establish a system of rewards and punishments that would more or less automatically increase the hedonic returns to virtuous acts, and decrease the returns to wickedness provided by our present system. All other things being held equal, that change should marginally increase the ratio of virtuous to wicked decisions about policy. It should, that is to say, train us all to virtue. And that should marginally increase the number of noble men in our civilization.

        Law regulates, but it also teaches.

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