Skeptic’s View of Defensive Force

Spencer Heath MacCallum, a social anthropologist, first tried out these ideas at the Libertarian Party State Convention in Los Angeles, February 14-17, 1986. The silence, he remembers, was deafening. Twenty-five years later he offered them again in this talk at the second annual Libertopia Conference in San Diego, California, October 21-23, 2011. This time the ideas got a very different reception, the author receiving many comments and several requests for copies. Perhaps the times have changed enough that people are more open to examining their attitude towards force.

My brother and I scrapped a lot as kids. Since he was a couple of years older and I was a brattish little brother, I was on the receiving end of a lot of rough behavior which I usually knew how to provoke to a point just short of really getting hurt. In the years since then I’ve given a lot of thought to the question of force, especially when asking the question, what is social behavior?
Years later, in an introductory sociology course at Princeton, my alma mater, the professor told the class that social behavior was anything involving lots of people interacting together. My grandfather, Spencer Heath, had been invited to sit in on the class. He asked if war was an example of social behavior. “Preeminently so,” said the professor. “Then if war is an example of social behavior,” Heath replied, “could you give the class an example of anti-social behavior?”
The professor wasn’t taking into account the quality of relations among people. Heath’s view, on the other hand, was that it is useful to define society not merely as population, but as that fraction of a population — its boundaries ever permeable — engaged in voluntary, reciprocal kinds of behavior such as trading in the market place. The violent behavior to be found in the excluded fraction, he would say, including most notably that practiced by the state, is indicative of a failing, a lack of, or immaturity of social organization.
My subject here is not social behavior, however, but its antithesis, force. Doubtless force, or violence, will always be with us in some degree, since we are limited, finite beings. But if we want to enlarge that fraction of the population that constitutes society, it behooves us to ask if there are some ways of thinking about force that are more conducive to that end than are others. Are there ways that might tend to damp it out rather than inflaming and escalating it?
Many libertarians I’ve known don’t oppose violence as such; they are not pacifists. They distinguish aggressive and defensive force and eschew the one, but are entirely comfortable with the other. Most strongly advocate using force “under the right circumstances,” and I’ve known many who spend a great deal of time carefully defining what those circumstances are.
Make no mistake, I’m not suggesting that anyone not stand up for her or his legitimate interests. I am not one to merely turn the other cheek or supinely give in to the aggressor. Gandhi, who was often misunderstood on this score, set the record straight in these words:
He who cannot protect himself or his nearest and dearest or their honour by non-violently facing death, may and ought to do so by violently dealing with the oppressor. He who can do neither of the two is a burden. He has no business to be the head of a family. He must either hide himself, or must rest content to live forever in helplessness and be prepared to crawl like a worm at the bidding of a bully.

The question is simply whether it is conducive to our purpose to say that one has a natural right to defensive violence. To speak in such terms is to launder violence; it is to say that, exercised under the right circumstances, it is good and just — perhaps even akin to the angels — rather than a leftover from our animal heritage that we must sometimes resort to when we can’t think of a more intelligent alternative.
The reluctance of many libertarians to critically examine what they hold to be their “natural right” to defend themselves violently is wholly understandable. For they are the holy keepers of an iridescent dream — and the dream is one in which they believe violence has a proper place.
The dream is to live in a world devoid of the state, its taxation, compulsions, and war, releasing human energy for creative play — from the inmost world of the human psyche to the farthest reach of the cosmos. But immediately comes a question. Absent government exercising a monopoly of violence, who will protect people from theft and other aggressions? Libertarians normally answer that this is the responsibility of each individual person, who must be prepared to forcibly defend himself or to delegate his ‘natural right’ to private agencies from whom he’ll purchase protective services. Consequently he must defend to his last breath that ‘right.’
But there is little agreement as to precisely how this force should, would, or could be handled; some argue, as did Bob LeFevre, against using any force at all, while others argue for heavily arming themselves and retaliating on the slightest provocation. Fundamental to the argument for privatizing defensive violence is the distinction between initiated and defensive force. Libertarians condone only the latter, but how to distinguish the two in real-life situations is no simple matter. Aggression itself is ill defined. Moreover, how much violence is justified by a given kind and degree of trespass is subject to many interpretations, the most extreme of which would simply brand any aggressor at all “fair game.” David Friedman has written a compelling critique of the natural-rights argument for defensive violence, showing the utter inadequacy of most libertarian theory in this regard.
May not this problem arise, not from the need for individuals to look out for themselves, but from their gratuitously assuming in the first place a “natural right” to respond violently to a perceived aggression?
The question of self defense is a thorny distraction from the merits of the libertarian position. Many who at first find themselves attracted to libertarianism subsequently abandon that overarching vision for the more limited dream, which to them appears more realistic, of minarchy, or limited government. To them, their former fellows are impractical or self-deceiving in supposing that everyone could rely on self-help in this regard and the situation not degenerate into endless feuding, strife, and confusion. They themselves, however, while suffering the stinging accusation of having compromised their ideals, must now contemplate the conundrum — the veritable riddle of the Sphinx — of how to police the policeman.
The irony is that such discord is needless. If libertarians and minarchists were to modify their thinking in just two ways, the problem might evaporate as dew from the morning grass. These two ways which I offer as propositions may at first seem unlikely. But I offer them in the spirit of Emerson, who observed that “senates and sovereigns can confer no honor like the presenting of a worthy thought and presupposing its intelligent consideration.”
The first would be to relinquish the idea that anyone possesses a natural right or moral obligation to use any kind of interpersonal violence in any situation whatever, even defensively.
The second would be to make the productive assumption that, for any conflict situation, there are always and without exception non-violent solutions.
Bear with me, as I elaborate these points and explain how, together, they may offer a strategy for greatly diminishing reliance on violence in human affairs and so promoting cooperation, expanding that ever permeable fraction of a population Heath called “society.”
First: Defensive Force
As noted, Friedman and others have pointed out both practical and theoretical problems with a natural-rights approach to defensive force. There may be many ways to resolve the problem, but one would be to cultivate a more dispassionate, clinical, non-judgmental attitude by looking at interpersonal force from a functional rather than either a moral or a legalistic viewpoint, seeing it as neither good nor bad in itself but accepting it for the limited purpose it sometimes serves as a response to crisis.
Well and good, you may say, but what is a crisis? For this discussion, a crisis will be any situation perceived by someone as demanding action, but where the person doesn’t know what action is appropriate to achieve her or his objective. In such a case the person may run away if it’s that kind of a situation, or he may try to dominate it by forcing it to his will. For a simple example of the latter, the television goes crazy during the last game of the World Series and the viewer doesn’t know the least thing about fixing it. What shall he do? He may try kicking it. That at least is doing something. Such a response is irrational in that it involves no understanding of how a television works and, consequently, has no assured outcome. Still, it might work. But kicking the set is a desperate sort of an act. It may or may not serve any purpose at all, and it’s often counterproductive.
While force is distinctly second-best to acting from understanding, it nevertheless allows a person to respond in a situation demanding action, even if he can’t act so as to control the outcome with any degree of assurance. In some situations the mere fact of responding can have value. It is nature’s primitive way of responding to an urgent situation in the absence of understanding.
Looked at in this light, force need no more be condemned than any other natural function. A simple example. When I was but a couple of years old, I had observed my nanny turning my pajamas right side out by a maneuver that, to me, looked like simply shaking them; I had yet to master the understanding that one reaches into the leg and takes hold of the cuff to pull it through. The next time the pajamas were inside out and nanny wasn’t there, I shook and shook and shook them. I applied a lot of force, and got no results.
Our examples of television sets and pajamas are harmless, because they involve only things. The situation becomes enormously more complex and dangerous where people are involved.
Do crises exhaust all possible occasions for force? What of the deliberate criminal who sees the use of force as simply a tool for acquiring the good things of life? His lack of those good things may be perceived by him as serious, but our definition of crisis requires that he not know how to respond appropriately. Ask him, and he’ll say he knows perfectly well what to do and is skilled in the tools of his trade. There is clearly no crisis. But if wealth is the goal, the entrepreneur has infinitely greater potential for obtaining it in the marketplace than the criminal has by stealing. The criminal is acting inappropriately for his goal — out of ignorance.
Force or submission — fight or flight — is ignorant behavior, inappropriate behavior. But we all engage in ignorant behavior. Such behavior doesn’t demand moral condemnation of the perpetrator. Where is the culpability in someone not being smart enough to cope adequately with the situation at hand? Looked at in this light, the person has simply fallen short. He is finite as are we all and, as with each and every one of us, there are other situations where he excels. If any emotional reaction at all is in order, it is compassion for someone who is unequal to his or her immediate situation.
If the goal is to see cooperation increase and conflict diminish, a supreme advantage in adopting such a purely functional perspective is that it no longer is necessary to differentiate between kinds of force. No longer is it necessary to distinguish aggressive from defensive violence. All is now seen in the same light, whether the violence be one’s own or the other fellow’s.
Not having to make such a distinction has a number of advantages. One is that in real-life situations, it is unrealistic to demand of anyone that he distinguish consistently and accurately between kinds and degrees of force in order to determine the rightness or wrongness of a strong action he may be about to undertake. We are finite beings, limited in all our faculties — as each of us is all too often and painfully reminded. Consequently our judgment is imperfect; we can’t know or take account of all the factors in any real-life situation. Due to each person’s unique makeup and background and the different filtering and reinforcing effects of his own experiences, no two witnesses perceive a given situation alike.
Another advantage is that we are often called upon to act on the basis of our imperfect observations at stressful times when our powers of discrimination and judgment are least available to us. When threatened, the body mobilizes its energies for action, whether fight or flight, by shutting down the higher brain functions in order not to be distracted by reflective thought. Have you ever noticed that our most creative thoughts often come when lying down — our least likely position for confrontation. It is probably no accident that many people must learn to think on their feet. Yet it is precisely at the most stressful times that legalistically minded people demand of themselves and others fine discriminations of the sort that juries might deliberate for months without reaching agreement.
Add to this that we are rationalizing creatures, and the difficulty soars. Being conscious and self aware, we each interpret our own behavior in ways consistent with our particular need for self esteem. Hence the common saying that there are two or more sides to every question. We never escape the necessity of interpreting experience, but because we are finite beings, our information is necessarily incomplete. Accordingly, we always have some — and often a great deal of — latitude in the interpretations we make. Naturally we’ll give ourselves the benefit of all reasonable doubt. As goal-seeking creatures whose all-encompassing goal is to live as fully and as effectively as we can, we would hardly do otherwise given any option at all — and our imperfect observation and information nearly always gives us the option.
Judging Others
If now to this already volatile mixture we add a fourth, wholly optional, ingredient, that of moral condemnation, the volatility rises dangerously.
The passing of moral judgment on others is a tricky and dangerous matter at best. Judgments are properly applied to behavior, not persons, and most especially one’s own behavior. Because of the uncertainties of life and the finitude of our knowledge, however, any of us is bound on occasion to rub the fur of our fellows the wrong way, and vice versa. We may then be inclined to resort to force if we know of no alternative. At such times it is all too easy to judge the other fellow. This act of judging removes one’s normal self restraint and is prelude to force. Fortunately, it’s an option that we control. We are never under necessity of judging others. It is always our choice.
When we do choose to condemn persons as morally bad, we alter the situation for the worse in at least four ways:

The first thing that we do is reduce the likelihood of discovering a non-violent course of action. Moral condemnation shuts off deliberation, suspends conscience. Social amenities no longer govern. The antagonist is thrust beyond the pale, becoming the stranger, the witch. He is a threat to be combated; for the logic of morality requires combat with evil. There is no compromise, no room for discussion. Battle lines are drawn. No one has a choice but to be for or against — to be one of us or one of them. To engage in moral condemnation is to equip oneself with blinders like those put on the war-horse prior to battle lest he be distracted by happenings to his right and left.
Secondly, we increase the probable intensity of the violence. Despite its frequent use by professed followers of established religion, moral condemnation is a mind-set for combat, not reverence. It is a powerful propaganda aid to brand the other fellow “immoral” and therefore deserving whatever might befall him. Not only does it justify violence; it encourages it by de-personalizing the other fellow — by labeling him, reducing him to a symbol, and one of evil, at that. We no longer identify with him as a fellow human being. Such lack of identification with the victim is well-known to predispose toward violence. During World War II, Americans who were horrified when Hitler killed several thousand Allied civilians by bombing Rotterdam showed little concern at all for more than 100,000 so-called “enemy” civilians who died in the Allied fire-bombing of Dresden.
Thirdly, we lessen the chance of learning anything from the experience that might help avert future violence. Consider a hypothetical case: The intended victim of a mugging has succeeded in knocking his assailant unconscious and is walking away. He has used violence and hurt a fellow human, possibly disabling him for life. What is the burden of his self-talk? How will it be affected by the presence or absence of a judgmental attitude? The staunch moralist might be oblivious of any involvement in a human tragedy. He might be preoccupied, instead, with classifying the event as one in which he was within his rights to retaliate, rationalizing his resort to force in the name of natural justice. In his self-talk, he would be saying the fellow asked for it; if it happened again he’d give it to him even better. The tone might well be self-congratulatory.
A non-moralist, on the other hand, feeling no compulsion to justify himself by analyzing the matter in such abstract categories, would simply be confronted by what had happened. He would be far more likely than the moralist to see the tragedy in the situation and to search his mind to think how he could have avoided the encounter or, failing that, handled himself differently in it. Which of the two would be more likely to learn something from the encounter and less likely to find himself in another like it?
Fourthly, adding yet more to the flammability of our mixture is the moralist’s conviction that, in combating evil (defined as any violation of his abstract ‘rights’), his action was not only justified, but commendable. If we entertain in our mind a class of situations in which violence is not only morally justified but virtuous, we will surely rationalize our experience to fit that ever so convenient category.
Indeed, the moral involvement so distorts perception that at times it becomes difficult even to recognize violence. Blumenthal’s 1972 study of attitudes of American men toward violence illustrates this. He found that only thirty-five percent of American males defined “police shooting looters” as violent, whereas fifty-eight percent thought that “burning a draft card” was violent.
A final dividend from adopting a non-judgmental attitude toward a perpetrator of violence is that it takes the machismo out the situation. What is more macho than judging people as morally bad and dishing out to them their “just desserts?” How different it might be if compassion or pity replaced admiration among the emotions commonly expressed when talking about violent people. If seen as objects of compassion, could bullies and war hawks then strut about?

The wise man of Galilee was blunt in his admonition to his followers, “Judge not, that ye be not judged.” For those inclined toward exegesis, consider also the following. Of the two fruit trees in the garden, one was forbidden to man. But the other was not. The tree that was forbidden to Adam and Eve, and that they ate of, was the tree of the knowledge of good and evil, which is to say, the tree of moral judgment. The other tree was not forbidden. It was called the tree of life. The message could scarcely be put more plainly than in this Old-Testament image.
Second: A Productive Assumption
Thus far, I have argued for adopting a non-judgmental approach toward persons behaving violently by conceiving of interpersonal force as simply a natural response to crisis. That may be good so far as it goes, but it is not enough. A second important step is called for. The second step is to make a productive assumption in such situations. That assumption is that there are always appropriate alternatives to violence (appropriate, that is, to our objectives).
It can’t be proved, of course, that there will always be such alternatives, but it is productive to make the assumption. Science gives ample precedent. Causality cannot be proven. The scientist cannot prove that the universe is rational — that it is a cosmos and not a chaos. But she or he assumes it is, and that assumption, that article of faith, makes exploration and discovery possible. That powerful assumption underlies the whole of modern science and all the technology derived from it.

We may not always be able to think of an appropriate, non-violent solution when a crisis is thrust upon us. But the mere act of assuming that there are any number of solutions will increase the odds of our discovering one, and our self-talk after the experience will work in the direction of discovery and new understanding that will serve us in the future. A personal story illustrates the difference this can make.

When World War I broke out, my grandfather was manufacturing airplane propellers in Baltimore. He had just developed the first machine-mass-production of propellers, replacing the workman who stood at a bench and carved them out by hand. Because his was the only plant at the time that could turn out propellers in volume, he produced more than three-quarters of the propellers used by the Allied governments in that conflict.
Not all of the propellers made in his plant during the war were of his design; frequently the War Department ordered propellers made to its own specifications. On one occasion specifications for a large government order came in, and my grandfather detected a design flaw that would cause the blades to have a tendency to break up in the air. He studied the problem, came up with the least modification that would make the blades safe, and went to the War Department with a revised design.
My grandfather had never enjoyed a warm rapport with the War Department. Franklin Delano Roosevelt was then Assistant Secretary of the Navy, and my grandfather had strongly resisted his introduction of cost-plus contracting on defense orders on grounds that it created the wrong incentives and led to featherbedding and corruption. Consequently the War Department was not now sympathetic toward his suggestion of altering a propeller specification and adopted the attitude that he was a “war profiteer” attempting to line his pockets. Nonetheless, my grandfather persisted. The dialogue was brought to a stop with blunt words: “Mr. Heath, this is wartime. You make those propellers, or we’ll shoot you.”
What would a reasonable person do in such a situation? What would you do? The answer isn’t obvious; so think about it. Would you have made the propellers as specified and endangered the lives of the pilots? (And you know who would be blamed for that after the war, the propellers having been made in your plant.) Or would you have risked disobeying orders in wartime?
My grandfather made the propellers exactly according to the faulty specifications. When he was telling me this story, I interjected at this point, “Popdaddy, you didn’t!” He said, “Hear the rest of it.”
The propellers were completed as ordered and were crated and stacked on the loading dock to go out on the early train the next morning. That night, after hours, my grandfather and a workman came back with crowbar, hammer and nails. Together they opened every crate and, with a rubber stamp he had prepared ahead of time, stamped the hub of each propeller. Then they nailed up the crates. In the morning the shipment went out on schedule.
Years later, altogether by chance, my grandfather learned that the propellers had never gone overseas. Someone had discovered the stamped hubs before shipment, and the entire lot had gone to a warehouse in Texas where, for all we know, they are still.
That original rubber stamp is still in my possession. It reads:


Had my grandfather assumed that he only had two options, both unacceptable, he would have been caught on the horns of a dilemma of his own making. But he didn’t waste his time on that; he didn’t let himself be trapped in that false alternative. He had no assurance that he would think of a solution, or think of one in time. But his assuming that any number of other options existed was the first putting out of energy toward their discovery.
How does all this translate into a workable personal philosophy? The path toward greater life and wider opportunities entails, among many other things, eschewing force of any kind, while realizing that there will be times when it can’t be avoided. Gandhi recognized that. When it happens, we mustn’t be hard on ourselves but, as with others, take a non-judgmental attitude. We must recognize that we did what we could and that now we must learn from the experience. Spencer Heath, of Quaker background, disavowed the use of force. When someone said to him, “But suppose a bear caught you at the wrong end of a box canyon? Would you fight then?” “Yes,” he said, “and with a right good will to win. But when the fight was over and I’d climbed out of that canyon, if I survived, I’d do some long thinking about how to avoid getting caught in a situation like that again!”
Granting that force sometimes may serve in a crisis, albeit precariously, I have challenged the idea that it can ever be a dependable tool or an appropriate or rational behavior for accomplishing desired ends. It is most especially inappropriate in interpersonal relations. Because categories are slippery, perceptions always imperfect and subjective, and our minds and memories never what they ideally might be, especially under stress, problems will tend to arise when the use of force is institutionalized or ‘legitimized’ in any social situation whatsoever. Our use of interpersonal force, in more poetic words, is “Cain’s mark” on each one of us, ever reminding us of our own fallibility.
On the constructive side, I’ve suggested promoting positive change in today’s world by altering two ways in which we habitually think and talk about interpersonal force or violence. Discard the idea of there ever being a right to the exercise of force in any situation — even in defense of one’s life — and make the productive assumption that that there are always peaceful alternatives to be found.
These two points of departure from conventional thinking are not offered as a complete cure for the problem of violence in human affairs. That would indeed be Utopian. But they can’t be a bad place to begin.

Posted in Uncategorized | Tagged | Leave a comment

Property and Its Productive Administration: Servant of the Creative Spirit in Man

The last time my grandfather, Spencer Heath, spoke publicly before his death in 1963, he gave five extemporaneous talks at Chapman College, in Orange, California, on what he called “The Christian Doctrine of Man.” This is a subject on which he had never published. Although I couldn’t be present, I arranged for the talks to be recorded and afterwards transcribed them. Now, fifty years later, Emalie and I are preparing to e-publish them, tentatively under the title, God and Market Reconciled: A Christian Celebration of Voluntary Exchange. The second of the talks is reproduced here (the prefatory bit about capital is from a penciled note found in the Spencer Heath Archive, described earlier). We’re not at all sure yet what our audience will be or how to publicize it. It will certainly be a niche all its own. If you find it interesting, please give us some feed-back!

Servant of the Creative Spirit in Man

What is CAPITAL?
Spiritual — creative — self-developing — organic
Property can be consumed, destroyed, and be no more. But also it can be used as a means towards an end without being consumed or destroyed. Devoted to the service of others, it can accumulate and grow at the same time it is serving others. Devoted to such service, it draws to itself automatically a recompense from those served. This gross recompense passes first to those persons who have served subordinately in its administration as suppliers of labor and materials. A further portion is applied to maintenance of the property itself. A still further portion, called “profit,” goes to those who, by owning it, administer the property. Finally a portion of its income keeps it in repair, and a still further portion provides for its replacement in some new form whenever its present form becomes unsuitable or obsolete. When conditions make it so that it no longer serves the desires or needs of others, this is called “obsolescence.” A portion of its revenues is accumulative for replacement in such case.

All such property devoted to the use of others is called “capital.” It is alive because it grows, creative because it builds, spiritual because it creates, immortal because it provides for its own indefinite continuity. It possesses a portion of the creative spirit of man as an instrument of his creative and thereby spiritual power.

<< O >>

The kingdom of Heaven is built on foundations, and the foundations, on the material side, are property. When we can’t have property, we can’t serve others. We might impose our will upon them, or do what we think is good for them — according to our idea of what is good for them and not theirs, necessarily — but unless we own property, we don’t have the wherewithal to serve people. Our bare hands are not enough to serve people very abundantly.

There has been a great deal of misconception about property through the ages. The ancients believed, and even now many persons believe, that property is something you take away from somebody else — or, at least, that you keep him from getting away from you. It implies rapacity, conflict over possession of things.

That may be true in the animal world, but I want to say a word or two about the human world. The trouble is that we haven’t become entirely human. The emergence of mankind need not be couched in the language of coming from sin into righteousness. Rather hit is coming out of his animal nature into his human nature. God made him a human; He didn’t make him an animal. At least He didn’t leave him like that. He put a few extra touches on and made him to have dominion over things.

Animals are creatures. They have no dominion. Any property an animal has, he has it by force or by running away from the other animals. When a monkey grabs a banana and runs away with it, we think that he has property in the banana; he runs away from the other monkeys. But if that monkey really owned, let us say, a whole shipload of bananas, and they were in New York Harbor, he would put a full-page advertisement in the New York Times begging the other monkeys to come and get them.

The animal idea of property is the idea held by Plato and Proudhon, that property is theft. It’s the Marxian idea: if you’ve got anything, you have to have stolen it from somebody else, and you’re keeping other people from having it — like the monkey, or like the hen that grabs a worm and runs away from the other fowl.

But when I speak of property today, I am speaking in the modern and, I might say, in the pragmatic sense: how do we use property? If the gross national product is so much, the productive property of this country is, roughly speaking, twenty times that much. That is the value of all the property in the country. What makes it valuable is the fact that it will yield a revenue; it will yield five percent. What makes it divine is that it won’t yield that five percent unless it is used by the owners not for their own interest, but for the interest of other people. Property, as we know it in the modern world, is an instrument. It is an instrument of freedom, an instrument of service.

Property is a very different thing in modern times than it was in ages past. When we didn’t have this modern civilization, when we had tyranny in place of it, then property was loot — the kind of property the rich young man had who was troubled about being rich and asked the Master, “What can I do to be saved?” The Master said to him, in effect — everybody knew it whether it was said or not — “Why, you got rich or your predecessors did by stealing, or seizing, or tribute, or taxation.” There wasn’t much of any private international trade or much of any free enterprise at all in Christ’s day. Trading was done by sovereigns, as sovereigns trade some today out of the proceeds of taxation.

So the rich young man had to have been an exploiter of the poor, because the only way for anybody to get rich in Christ’s time was by making poor people poorer. The property that the Romans administered was property that they had seized. But the property that is administered in our modern world, other than political, is property that is created by giving services. The whole productive property that we have in this nation, being about twenty times the gross national product, is property that is used for the benefit of other people and is not being taken away from those other people at all; they get services out of it, and commodities, and so on.

We have to get a different way of thinking. We don’t think of property in modern terms. We practice it — but we don’t think about it as much as we practice it.

If a man wants to start a grocery store, he’s thinking about getting something for himself and his family, maybe. He finds a place where he thinks he can set up a grocery store. Ask him if his heart is going out to the people of this neighborhood for the poor services they are getting and he wants to improve those services, and he says, “To hell with that. I don’t care whether they’re getting poor services or not. I just want to get something out of them myself.” That is his vulpine psychology, isn’t it? But when he opens that store and commences to wait on those customers, is he then trying to get something out of them? In his behavior? No matter what he may be thinking, he is serving them. That is the only way he can get benefit to himself. While his psychology may be very archaic and usually is, his social and economic technology is very superior. If it is not, he isn’t there long. Somebody else will be more superior in their behavior than he is.

So it isn’t that men always have to be conscious of the good they do. They may have the wrong idea about it altogether. It’s like the Patent Office; you may have all of the wrong ideas about your invention, but if it works, the Patent Office will give you a patent just the same. That’s the way it is in modern times. Our administration of property is modern and creative, whereas our thoughts, our conceptions about property for the most part are Marxian.

Thus one characteristic of property in the modern world is its productive administration. It is primarily employed as tools or instruments or materials for the service of other persons. This gives rise to a second characteristic of property in the world today that is in full accord with the New Testament point of view: property in the sense in which we have been speaking is immortal. It is immortal because the property that we use for other persons brings us an automatic, a spiritual, an unforced revenue called “profit.” That profit is used to maintain the property, and it provides for its reproduction in case it becomes obsolescent or loses its usefulness from any cause. It builds up its own successor.

A great hotel in New York City, about forty years old, was torn down — and many people were sad to see the beautiful art in it, frescoes and marbles and that sort of thing, pulled down with no attempt to save it. The hotel had earned its own reproduction, and a new one was to be built on the site. The reason the old one was sacrificed was because the revenue could not start until the new hotel was finished and serving people. It was costing thousands of dollars for every day’s delay.

I use this to illustrate that there is a livingness, an enduringness, a reality about capital property — property that is not being consumed by its owners. There is a reality about that like the reality of the Holy Spirit — the everlastingness about it, the eternity about it. Plato and Saint Paul united in defining the real things as the things that never end, the everlasting things. Things are real in proportion as they can continue; things are unreal in proportion as they defeat their own ends. There is a reality about men serving one another. The more they serve one another, the more they can, and the more who can join them. Together they can make a greater Kingdom of Heaven.

But when you have no property, there can be no contract, and when you have no contract — when people try to make engagements without owning anything — what do you have? In the sense in which I am describing it, governments do not own anything; they have jurisdiction that is the jurisdiction of the sword. They appropriate things, and they direct the use and disposition of these things so long as there is anything for them to direct — which has always washed out in history. That is why governments disappear from the face of the earth time after time. If they don’t own anything, they can’t make contracts.

In calling attention to governments, or even thieves or gangsters or pirates, or anybody like that that uses force, I am not trying to speak objectionably about anybody but just to point sharply the mode of operation. The mode of operation involving force, seizing property and coercing persons, never produces any revenue, and consequently all that sort of thing has to vanish.

The agreements among people who really own things, in the sense of having exclusive social jurisdiction so that they can employ these things in the service of other persons, we call “contracts.” If you promise to do something for me, and it requires the use of property, then you have to own that property or else you can’t fulfill your contract.

Property is a spiritual relationship; it is a relationship by means of which people are able to serve one another creatively. People are drawn together — contract (from Latin, contrahere, to draw together). They are drawn together, and they find common ground in things that they want to happen. They dream something, and they want this dream to come true. Each sees to it that he makes the dream of the other come true, and that is called a “contract” — an agreement to do good to one another on both sides, mutually, by exchange.

Moreover, these people make their engagements rationally — according to ratios — because they measure what they do. They measure it by going to a public place and crying out what they will give for something, how much they would accept for something and so on, and by this voluntary, spontaneous voting they fix what things are worth so that they can tell what is the equivalent of one thing to another. An apple is worth two oranges or vice versa, and they chalk it up on the price poll. Then people can trade apples and oranges on the basis of what the common voting has determined as to their relative position on the scale of economic values.

But governments, when they make engagements — when they have a Summit Conference, perhaps, or a Geneva Conference, or a Treaty of Peace Conference — they don’t call them “contracts.” They call them “treaties,” or more formally, they call them “covenants.”

In law school, I was taught that the only difference between a contract and a covenant was that the covenant was a very sacred, serious kind of a contract. To prove it was more sacred, it had a nice red or gold seal of some kind on it. That made it a covenant. You see that on treaties. Furthermore, it was a covenant if the parties implored God to strike them dead if they violated the rule.

Later I discovered for myself that a contract is always an agreement to do things that we mutually want to have done. It is an agreement to serve one another — to benefit one another. But a covenant or a treaty is nearly always an agreement not to do harm — as God put the covenant in the sky that He wouldn’t drown the people out anymore. People make covenants agreeing that they will not raid one another and that nations will not fight one another.

Two nomads by the name of Lot and Abraham once were trying to settle down alongside of one another. They were herders, and their herdsmen fought with one another between the two flocks and the two camps. So they went out and drew a line, and each agreed that one should take the land on one side of the line and one the land on the other. As with all boundaries, they put up a stone to mark it. They engraved on this stone, “Mizpah.” Now there is a sentimental way in which that is customarily interpreted that is very beautiful. But the literal interpretation is this: “Here is a line. We are not going to trespass across this line. We have agreed that we will not do harm.” Not that we’re going to do anybody any good; we just aren’t going to harm each other any more. The words of the translation of Mizpah said, “May the Lord watch between thee and me when we are not here to watch each other.” So this became sacred; they called upon Yahweh to punish the one who would do harm when he had promised not to do harm. There was nothing said about anybody doing anybody any good at all. It was a covenant, not a contract.

Now the curious thing about a contract is that a contract can be performed and commonly is performed. That’s how we have civilization. We build values and create things that way. But a treaty or a covenant can’t be performed. You can’t perform a nothing. So if you are going to do anything at all about a covenant, about a promise not to do harm, you can only violate it. That’s all you can do about it. That’s why treaties have always been violated throughout history. What else can we do about a covenant if we do anything about it at all?

Property, then, is the subject matter of contract. If it is the subject of a contract, it has to be property. The parties have to have exclusive jurisdiction over their respective properties — and, for that matter, over their respective persons; for it has to be done in freedom. A contract can only be performed so far as the people are free to own themselves and to own that which is accepted by the rest of society voluntarily as their property. The common sense of people acknowledges that this book is mine, and you would all run down anybody who tried to take it away from me by force. That’s what gives me the jurisdiction. All the police in the world couldn’t keep this watch on my wrist if you people around here said that I shouldn’t have it.

Property is not something that is established by political authority. On the contrary, it is broken down by political authority, inasmuch as political officers invade the contract-making power of property. They take away that power. Government violates the sacredness of contract — does it habitually and unthinkingly — and we sort of accept it, supinely.

Property is necessary to civilization. It is necessary to preserving any community. “Community,” as I define it, is an inhabited place in which the inhabitants are performing and exchanging services with one another. That means, then, that there has to be property there — and the basic property has to be the use of the earth itself.
When people are going to establish a community, the first thing they have to do in this place is to establish property in land — because until they do agree upon some person having the authority to distribute it among other people, it is anybody’s land. When they moved in on the Cherokee Strip when I was a boy, the Government soldiers held the people back — whole hordes — and then the people rushed in. They didn’t have any election; the first thing they did was to drive stakes in the ground and stake out their claims. The first thing to be decided was who owned what in this territory. Until that was done, nothing but violence and disorder could reign. After that was done, then there was a contractual distribution of possession of different parts of the land.

It’s as narrow as that. That’s the line. If today there were no property in land, then the only way to decide whether I could occupy this place or not would be by my power to repel other people — and whether you could occupy your place or not would depend on my power to dispossess you. Anybody could grab it. Or some dominant political authority could grab it and then say what you could do with it.

But where there is property in land, the self-interest of the land owner compels him to find the most productive user for it. He sells or leases it to the one who can pay him the most, and only the potentially greatest producer can pay the most for the occupancy. That invisible hand that Adam Smith tells us about is working there too. The landlord, selfishly seeking his own interest, sees to it that at the same time, in the very act of getting the biggest price or the biggest rent, he chooses the person who can make that site most productive. That benefits everybody in the whole population.

There can be no golden-rule relationship except you have jurisdiction over yourself and over that which is rightfully your possession, whether it be land or whether it be goods, or services, or whatever it may be. When you have that jurisdiction, then you can be with your neighbor on contractual, or spiritual, terms, which means creative terms. So property is a creation of God, of mankind, of nature.

Property is the means by which men practice the divine relationship of loving one another by serving one another. Notice that this love is impersonal, because you serve people without even knowing them, much less loving them in a psychological sense. In a practical sense, by doing good to them, you don’t have to know who they are. You put something in the market, and it may travel all over the world to the remotest corners, serving people. Things from all over the world will come back to you in exchange for what you put in the market. It is impersonal, and being impersonal is what makes it possible for it to be universal.

So this love that Christ commands, this loving people through serving them in a spiritual relationship called “contract,” this rule becomes universal because it is impersonal. And when it becomes universal service and universal love — the universal service being the objective side of universal love — then universal love becomes divine love. So men are practicing their divinity that was breathed into them in Genesis, breathed into a living soul through the power of inspiration — breathed into them. They are practicing that divine love when they practice the exchange relationship upon which all our civilization as such, all our society, absolutely depends, and without which we are retrograding toward death.

Spencer and Emalie MacCallum
September 9, 2011

Spencer MacCallum will be speaking at Libertopia Festival 2011 in San Diego
Stay in touch at Facebook
Follow us on Twitter
Find all details for the festival at

Posted in Uncategorized | Leave a comment

Untitled Item from the Spencer Heath Archive

When my grandfather, Spencer Heath, died in 1963, now almost fifty years ago, I had the good sense to gather up all of his writings, a good bushel basket full of mostly penciled notes, jottings in lined tablets and on the back of envelopes. Gradually over a period of months I transcribed them uniformly by typewriter, in no particular order, numbering each as I went. The final tally was just over 2,000 items, now called the Spencer Heath Archive.

Subsequently, at the suggestion of Donald H. Allen (a long-time colleague of Galambos), Alvin Lowi studied and annotated several hundred items. These he pulled more or less randomly since there was no organization to the cartons of typed sheets, looking for ones relating to the philosophy of science. For although Heath had never published on that subject, he valued his discoveries in that area more highly, even, than his contributions to voluntaryist social organization. Years later, in 1998, Lowi authored “The Legacy of Spencer Heath,” intended as a forward for a contemplated new edition of Heath’s Citadel, Market and Altar. In the Summary of that essay, he wrote,

“Spencer Heath is remembered here for his work to establish a realistic basis for science. His theory of reality upholding observable events per se as the foundation of natural science suggests a reformulation of physics in terms of action (instead of the more abstract energy) and has far-reaching implications. A rational measure of quality, or value, in human terms is found in the dimensions of action. Heath’s reasoning is followed into the domain of social phenomena where an action concept of population provides a quantitative measure of social performance and a humane rationale for human progress.”

Except for Lowi’s work, the Archive lay fallow until this year, 2011, when Emalie and I undertook to scan it to make it accessible to the public. It is now about one-fifth scanned, and I am amazed and humbled at how much richer the content is, now that I come to it with greater understanding than in my callow years half-a-century ago. When the following item came up, Emalie suggested posting it on this site as a taste of what we are finding. It’s a different slant from what Lowi describes above, and was probably a random taping I did from conversations with Heath around 1960. Because Heath published little, and never had students, his ideas are little known. An accessible Archive may go some ways toward remedying that.

An Untitled Item:

Society is like a machine even though it be vastly more. It is an organization of units which function together. This means that there is an exchange of energy between them. The energy is not mechanical, not chemical, not electrical. Yet these are included in it. The energy that is exchanged among the units of society can be called social energy.

Not all human energy is social; much of it is individual, acting within the parts of the individual or between the individual and his general environment. But there is a kind of human energy that is social because it passes from one individual to many others and is of such kind that it can be measured in units of its own and that it induces a counterflow of social energy similarly measured in return. This counterflow is due to the energy being beneficial — life-serving and pleasure-giving to its recipients. The relationship between individuals in which this socialized energy flow is given and received, that is, exchanged, is called contract. A system of contract is the basic vital process or metabolism of the higher organism known as society. This relationship and mutual exchange of energy is what distinguishes the living and growing society from the dying and disintegrating political and other coercive and irrational.

The practice of contract constitutes the social institution called the market. This is where the measuring process in the formation of contracts takes place. This process is called competition. It depends upon freedom. This means that each contracting party is free to choose from among all others from whom and in what manner he shall be served. This eliminates waste of human energy and accounts for the social process being integrative and creative instead of the reverse. The energy flowing from member to member must be embodied in some form, either the human bodily form or through other material structures in association with the human. These other structures are portions of the physical environment which are so treated by the common consent as to constitute private property and thus to be the subject matter of contract.

All property is fundamentally land, and land is the first and original subject-matter of contract. When things extracted from land are so modified as to serve primarily others, such material things are organized in what is called capital. The administration consists in transferring control over it or the use of it to others in such manner as to cause a corresponding return of social energy. This return is called gross income. It defrays the cost of all preparatory energy, called production, and provides a fund for its own maintenance and against depreciation and for its own replacement after obsolescence. It thus has a kind of permanence and immortality of its own so long as the free process among individuals called contract continues.

History, for the most part, records the coercive relationships among men. It records the acquisition and dissipation of coercive power. Cultural anthropology lays more stress upon the reciprocal and beneficial relations subsisting among men. The primary relationship is biological and subsists only among the family and herd or tribe — among units organized upon recognition of common ancestry or other common origin. The amenities of this relationship depend upon awareness of it and are therefore strictly limited in extent. There is a numerical limit to family or tribal solidarity, and the relations among its members are purely emotional, without any quantitative rationale. Throughout the greater part of the historical period, cooperative relationships among men on any wide scale were virtually impossible. The great mass of men had little or no jurisdiction over themselves. They could not make or perform contracts. Not until the beginning of the modern period were the generality of men free to serve one another by mutual consent and upon terms which were established in the democracy of open competition in the market place. Prior to that, virtually all men were under compulsion of those above them in the exercise of coercive or political power. The modern relationship was a matter of unconscious growth (like the kingdom of heaven). Pirates gradually became merchants without knowing it. And merchants to this day are thought of largely as pirates because the mass mentality has not evolved to recognize the modern relationship.

. . . In the Mediterranean and in the Baltic, when the Roman sovereignties all broke down, then the pirates gradually discovered that they were more prosperous and longer lived through the trading relationship. Those who became traders lived. King Solomon built the temple of cedars from Lebanon. People think that was trading, but Solomon got it by taxes or shipping around booty. All the Greek and Roman public works and glory was of the same kind. That’s why it could not stand; it was not capital, it could not perpetuate itself. The self-aggrandizement of monarchs was not trading. It was not raising, but lowering the general standard of living.

The rise of medieval commercial houses grew upon the foundation of piracy by the importation of contract — the adoption of contract in the place of violence. As, nourished on trade, they became sovereigns again to fill up the vacuum left by the decline of Roman powers, they relapsed into coercion.

This is a great big pageant, you know. Pirates became merchants and traders and when they get enough wealth they commenced to fight one another. Modern, highly organized violence depends upon highly organized contract. Modern sovereignty does not enslave the individuals, it enslaves the process. It participates by violence in its fruits

Spencer and Emalie MacCallum
September 9, 2011

Spencer MacCallum will be speaking at Libertopia Festival 2011 in San Diego
Stay in touch at Facebook
Follow us on Twitter
Find all details for the festival at

Posted in Uncategorized | Tagged , , , | Leave a comment

Quickening of Social Evolution:








Negotiating the Last Rapids, Perhaps









Spencer Heath MacCallum





The Independent Review

A Journal of Political Economy

Vol. II  No. 2  (Fall 1997)

 (Revised by the author 2011)



The Quickening of Social Evolution

Spencer Heath MacCallum

Years ago I read a translation, supposedly true, of an early Egyptian sequence of hieroglyphs that said in effect that the world was going to the dogs. After listing a number of lamentations, including the disobedience of young people and how they no longer respected their elders, it ended with the observation that “everybody’s trying to write a book.”

         So it always seems to every generation that the world is disintegrating. There is a good reason why it should appear that way, a very understandable reason. The world is in flux, with new forms always evolving from the old. We are familiar with the old patterns because we have lived them, but not with the new, emerging ones that have never been part of our experience. Consequently we can rarely recognize the new patterns that are in process of forming. Knowing only the patterns that were, all we see in change is disintegration—patterns being lost. This is particularly easy to see in language, in the losing efforts of pedagogues to train the young to speak ‘grammatically.’ But the same phenomenon occurs in all areas of our experience. So the disintegration lamented by the Egyptians and probably every generation before and after is, for the most part, appearance only. It might just as well be called integration as disintegration, except that we don’t have the evidence before our eyes. We must take it on faith.

         The same is true of societal change—the broad sweep of human social evolution. Only evolutionary change isn’t gradual but seems to be punctuated by abrupt shifts from one plane of comparatively stable forms to the next, yet always preserving and building on what went before. It’s like a stair consisting of treads and risers. The treads are the broad planes of comparatively stable institutions while the risers are periods of turbulent change and instability which must be negotiated before the next broad tread is reached—just as the spawning salmon must negotiate the steep rapid or rocky waterfall before reaching the next comparatively calm stretch of river. The salmon leaps and falls back, leaps and falls back, but each time it progresses farther and falls back not quite as much, until it has negotiated the rough water.

         Mankind has been negotiating a rapid for at least nine thousand years. That is an exceedingly brief period in the eons that man has occupied the earth, but his leaping and falling back again throughout that era is the pattern recounted in history textbooks and archaeological reports, the repeated rise and fall of civilization.

         The previous broad tread on the stair, the calm stretch of water we have now pretty much left behind us, was that of tribalism, or kinship society, characterized by dependence on systems of kin status for sorting out all the customary roles and activities in society. Now relying less on kinship, humankind is experimenting with a wide assortment of contractual relations. Sir Henry Sumner Maine was sound when he observed more than a century ago in his classic, Ancient Law, “We may say that the movement of the progressive societies has hitherto been a movement from status to contract” (original emphasis)(1986: 141).

         I suspect that we salmon people have now reached a point where, as we leap, we can begin to see over the top of the falls or rapids to the next calm stretch in our river. We can just begin to discern and make some judgments about what the nature of human society will be as it stabilizes once again on the next broad tread of evolution. I’m going to take the risk—I don’t think it’s a very great one—of making some predictions about human society as it settles into comparatively smooth sailing somewhere in the twenty-first century and, probably, for quite some time beyond.


         Tribalism versus Nation States of Today


         Consider first where we’ve been. As an anthropologist, I’ve focused a good deal of my attention on tribal societies. In many ways the era of tribalism, as compared with today, was a golden age, to be exceeded only by what is yet in store for us. That is not to be blind to the fact that tribal life left much to be desired. Tribal man’s technological proficiency was so limited that he was constantly at the mercy of nature. This limitation was most gravely serious with respect to health; general life expectancy of less than 30 years barely permitted biological replacement. A second grave shortcoming under tribalism was that human social life coalesced, as it were, in antagonistic droplets scattered over the globe with little communication or cooperation between members of one and those of another. Opportunities were essentially limited to the circle of face-to-face acquaintances into which one was born.

         These were serious drawbacks. But there was a positive side. Within each of those antagonistic droplets, social relations had an orderliness and sense of fair play almost incomprehensible to us today. Society consisted of small management units, quite human in scale, and relations among the members (at least the men) tended strongly to be egalitarian, fair, and just. The headman of a village, for example, while he enjoyed influence and prestige, exercised no authority over the persons or property of anyone else in the village. He had the same authority in kind as that exercised by the humblest member. There was no conscription of persons, no taxation. Tribal society was consistent in this respect throughout. In the juridical sense of freedom, one is free when he enjoys full integrity of his person and property. Tribal society was free.

         Let me tack on a caveat. The generalization doesn’t include transitional forms on the boundary between tribes and states. When tribes cross that boundary and become states, they may retain many of their tribal characteristics for a long time. We know we’re dealing with a state, however, when force has become institutionalized and is accepted as proper conduct within the cooperating group. In The Art of Community (1970: 98-99), I described the example of the Cherokee in 1761 forming themselves into a state. The moment of transition was definite, although many tribal characteristics persist to this day. The Cherokee fell within our generalization before 1761, but not after.

         Modern society under the sway of political governments is the reverse of tribalism. Imagine humankind as a great bird attempting to fly. Whereas under tribalism one of its wings dragged on the ground, preventing it from rising into flight, now that wing is up and the other drags. In science and technology we’ve made enormous gains; we’ve better than doubled our average life expectancy within a few generations and may do so again. We can enjoy virtually unlimited opportunities for communication and exchange with other human beings anywhere on the earth. That much is progress. But in our political life we have regressed. More than three hundred million people in the United States are ruled as a monolith from the top, and their chief executive is a warrior, the commander-in-chief of the armed forces. He regularly exercises an authority that differs absolutely in kind from that exercised by private citizens in their daily affairs. Subjected to that authority, people largely become ciphers, their individuality erased. Our gains even in science and technology are endangered by the uncontrolled and seemingly uncontrollable growth and spread of institutionalized force.

         The prospect of life under the rule of the nation state is bleak indeed if seen only from the viewpoint of the disintegration of the institutions and lifeways we grew up with or know from our grandparents’ accounts and from our reading. But change, as I have said, is characteristically not only from but toward. It has two aspects, one of them quite invisible until we almost bump up against it. Patterns newly forming are not encompassed within our experience, hence all we can see is the disintegration that change brings. What of the future? Will humankind ever get both wings aloft at the same time?

         Past experience should reassure us that in the broad picture, at least, change is more integrative than disintegrative. It is demonstrable that this is true, for in the long run if health were not more catching than disease, to use a homely phrase of my grandfather’s, none of us would be here today. But happily we salmon people have gained a point, almost at the top of our rocky waterfall, where we need not rely on philosophic conjecture alone. In our mind’s eye, at least, we can begin to see over the top of the falls—and with that glimpse of the future we can begin to recognize and interpret events that are happening all around us. We can begin to perceive basic evolutionary changes taking place in the structure and function of our social organization, changes that we may soon be able to recognize as part of an emerging pattern.


         The Change that is Gathering Speed


         How can such change be happening? Let’s review some basics. Certainly one of the most significant differences between tribalism and society today is man’s vastly greater facility with numbers. The ability to manipulate numbers makes possible on the one hand the whole world of science and its applications and, on the other hand, that of modern commerce, both utterly strange worlds to tribal man. Facility with numbers is not by itself a sufficient cause, but it is prerequisite. Without it there could be no science or extensive commerce, but with it, given the right conditions, science and commerce will evolve. Science becomes possible because at bottom it involves comparisons of quantities, and every ratio is a number—hence the ration-ality of science. Likewise, world commerce becomes possible, because it depends upon numerical pricing and accountancy of debt, credit, inventory, and trades. The changes that regularly occur in pricing coordinate the whole world of economic activity.


         Science is not my focus here; it’s not the wing that is dragging.  Our dragging wing is that of our interpersonal relations, and a fundamental part of those relations—the healing and growing part—is commerce. Do you recall the passage from the Psalm about how the stone the builders rejected became the chief cornerstone? Commerce is that cornerstone. We appreciate it far too little, and we deprecate it far too much. Alfred North Whitehead once characterized civilization as the “victory of persuasion over force.” He elaborated, saying, “Commerce is the great example of intercourse in the way of persuasion. War, slavery, and government compulsion exemplify the reign of force” ([1933] 1967: 83).

         Commerce developed as people learned to balance their accounts numerically, making it possible to do business with strangers: people of another lineage, clan, or village. Without numbers, which make it possible to balance and complete a transaction, there is always something left over on one side or the other. When dealing with familiars (the language under tribalism, incidentally, is that of gifting rather than buying and selling), the imbalance doesn’t matter; over a lifetime or some similarly extended period of reciprocating, it all evens out. With accountancy, however, transactions can be complete in themselves. The parties can depart satisfied, even where there is no expectation that either will ever see the other again. So for the first time we can do business with people we don’t know. This dissolves the surface tension of the antagonistic droplets of tribal society and makes possible the worldwide system of reciprocal services that today gives us an ever lengthening and more comfortable and creative living.


         Land as an Object of Commerce


         Commerce is central to the line of thought unfolding here, but not just commerce in any of the usual array of things we find in the market. More specifically, I want to focus on commerce in land. We’re all familiar with the growth and development of other kinds of commerce, but commerce in land has lagged behind in comparison with most other areas of the market. One of the reasons for its lagging may be that in Europe before the revolutions of the eighteenth and nineteenth centuries land wasn’t free to any great extent, not generally so, to become the object of commerce. It couldn’t readily be bought and sold in the marketplace. That situation changed only when those revolutions brought about a separation of land and state. This change, though little noticed by historians, is arguably one of the most important events of modern times. Until it happened, land in Western Europe was not free to be traded as other things were but was tied up in primogeniture and entail and was part of the administration of government. Only when the revolutions that swept through Europe divested the titled nobility of all of their political power and trappings without divesting them of their ownership of land could land become a commodity like other things.

         The titled nobility as a class, however, tended not to be entrepreneurial; they had previously been the government, and their ethic militated against sullying their hands with trade. Jane Jacobs, in Systems for Survival [1992], clarifies beautifully why this ethic prevailed. So a truly businesslike approach to landownership got off to a late start, and a slow start at that. Even today the vast majority of landlords carry on their business as a sideline, often to supplement a pension or other retirement income, and have little understanding of the business they are in.


         The Business Rationale of Landownership


         The business rationale of landownership was first elucidated by Spencer Heath (1936) and derives from the fact that public services, things we enjoy in common rather than separately and apart from one another such as streets, public safety, and other community amenities, are environmental features. Unlike other goods and services which can be delivered to individual consumers wherever they might be, environmental goods and services pertain to sites, and individuals gain access to them through their occupancy of those sites. That is why location is the determinant of site value. Public services being a component of the environment of any given site, when landowners lease or sell sites, they are functioning as the market purveyors of those public services, packaged with other locational advantages.

         Only in this way can public services be distributed as other goods and services are, that is, through the conventions of the market place. Only through the institution of property in land are they distributed freely and equitably by contract, which is egalitarian in the free tradition of tribalism, instead of through favor and privilege, forced levies, the corrosive relationship of ruler and ruled by whatever name. This distributive function is the minimal service performed by the landowner, for which he is recompensed in land price or rent. Traditionally landowners have done little more; they have distributed politically provided public services and amenities, such as they are, but not produced them.

In a burgeoning sector of the market, however, this is changing, as private landowners undertake the production as well as the distribution of public goods. For example, instead of continuing in the old pattern of subdivided lots on Main Street, the majority of retail shops and stores in the United States have moved into situations where land is organized and managed under single ownership and the landowners (of whom there may be many by way of undivided shares) provide many of the services such as streets and parking, sewerage and power distribution, policing, landscaped public areas and so forth that government previously provided. These shopping malls are only the most prominent examples of what real-estate professionals call “multi-tenant income properties” and this writer prefers to call “entrepreneurial communities,” shortened to “entrecomms,” since the public services are provided privately and competitively in the market as a profit making enterprise.[1] Retailing has not been alone in adopting this formula; the same thing is happening across a wide spectrum of land uses—recreational, industrial, professional, medical, and even some residential.

         The formula is for the owners of a tract of land to invest in improving it in ways that create for each of the leased sites into which it is parceled an optimal environment for its intended use. Competing managers of the properties then bid down the rents asked while competing prospective tenants bid up the rents they are willing to pay. To the extent the owners succeed in creating desirable environment for the sites they offer the public, the rents not only finance the common or public services in that place but return a profit. Because these entrepreneurial communities, or entrecomms, yield a market revenue, they are self-sustaining; they never need become obsolete, like the ruins of antiquity. Because they produce income they will be maintained; they will be renovated or rebuilt as required to keep them competitive and productive.

         Entrecomms are newcomers in the evolving world of business. They represent an even thinner slice of recorded history than recorded history represents of the total period of man’s life on earth. Evolving in a rudimentary way in the nineteenth century, they blossomed in the twentieth. From the second quarter of the nineteenth century and accelerating especially after World War II, they evolved and proliferated in number, kind, size and complexity as entrepreneurs in this new kind of business created myriad environments tailored to clientele with specialized wants—merchants, travelers, manufacturers, residents and professionals of every variety. Each specialized type of environment that met with success in the market defined a new economic niche. Thus in succession we saw the rise of hotels, apartment buildings, office buildings (“skyscrapers”), luxury liners, shopping centers and malls, mobilehome parks (now becoming landlease manufactured-home communities distinguished by long-term leases that can be individually mortgaged), marinas, research parks, professional parks, medical clinics, and theme parks—as well as, increasingly, integrations and combinations of these to form properties more complex and, over all, less specialized. As they become more generalized, they approach what is commonly thought of as a community.

         The rapidity, moreover, of this development has been dramatic. By way of illustration, the shopping center at the close of World War II was experimental. Fewer than a dozen existed anywhere; even the name had yet to be coined. Today there are more than 50,000 in the United States alone, where they accommodate more than half of the retail trade of the nation.




         Each type of entrecomm has specialized management needs determined by the particular market to which it caters. The shopping center, for example, must forge an effective retailing team. Every team needs a coach, and in the shopping center the manager is it. His role includes maintaining peace and fostering cooperation among a highly competitive group of merchants. The merchants recognize that he is uniquely positioned to fill such a role since he represents the land interest and consequently is both impartial and vitally interested in the whole center. Unlike the tenants whom he serves, who inevitably are partisan and to that extent have incentive to exploit the center as a commons, he has a direct and personal business interest in the success of the whole.

         From the viewpoint of one looking at societal evolution, it is intriguing that the management requirements of entrecomms are so similar in principle as to be indistinguishable from the administrative requirements of what we customarily think of as communities.  Basically, entrecomms differ from communities in the common sense only in the greater specialization, the lesser heterogeneity, of their membership. Rates of population turnover and richness of interaction are not consistently different. Moreover, the unmistakable trend over the last half-century has been toward increased size and complexity—moving in the direction of becoming communities in the accepted sense of the term. It would hardly be a radical departure today, tax laws permitting, for an enterprising real-estate developer to develop a new town on a land-lease basis as a long-term investment for income. Rather than being structured politically, i.e. funded from taxes, this community would be wholly self-supporting from voluntary market revenue, its public administration yielding a profit for its investors.

         Spencer Heath once reasoned that if a new town were developed under unified ownership and its land parceled by means of long-term land leasing rather than subdivided, we would have an proprietary community in principle resembling a hotel extended out-of-doors and writ large. Like the hotel, it would have a concentrated entrepreneurial interest in the whole. In view of the size and complexity of some contemporary hotels, his suggestion that hotels might be prototypical of cities of the future is more credible today than when he wrote more than sixty years ago. The MGM Grand in Las Vegas, not by any means the largest, promotes itself as a self-contained city, and it does approach a truly generalized community. It includes shopping malls, professional offices, convention facilities, restaurants and cafes, chapels, theaters and art galleries, medical services, a security force, a monorail station, and the list goes on. Its registered guests, professional and retail tenants, service staff, and visitors make it significantly larger than the city of Boston at the time the United States gained its independence from England.



         Theory of Entrepreneurial Community:

         Henry George, Ebenezer Howard, Spencer Heath


         No established body of theory yet addresses the proliferation of multi-tenant income properties with their intriguing promise of maturing into full communities. Such theory as exists was developed during the nineteenth and early twentieth centuries by people outside of academia whose work and writings are little known. Among the most prominent of these were Henry George (1839-1897), Ebenezer Howard (1850-1928), and Spencer Heath (1876-1963).

         Henry George, a truly remarkable economist, political scientist, and orator made a major contribution at the end of the nineteenth century. He had distinguished predecessors, including among others William Ogilvie, Thomas Spence, Patrick Edward Dove, and the early Herbert Spencer. But none approached the forcefulness with which he publicized the idea that ground rent—revenue from land—constitutes a “naturally ordained” fund for financing all public services. Unfortunately, the method he envisioned for applying the principle was for government to collect those rents, leaving landowners out of the picture. Thus Georgist communities in theory would not have been proprietary nor in any sense competitive or entrepreneurial. His reliance on the coercive powers of government, his ”going political,” may account as much as any other single factor for his land argument falling into obscurity. Economist Fred Foldvary in his Public Goods and Private Communities: The Market Provision of Social Services has only now, a century later, begun to reintroduce into academic and public discussion the relationship between land rent and public services.

         Ebenezer Howard was a practical and unassuming Englishman and yet, like Henry George, a social dreamer of extraordinary vision. Despite his modest personal means, he founded England’s Garden City movement and was responsible for the successful development of two cities outside of London on what previously had been rural land. Letchworth and Welwyn today are small but prosperous cities financed by ground rents, and to my knowledge not a penny of taxation has been levied in either. On the contrary, the British Labor government, upon nationalizing both in the post-World-War-II years (a private company owning a town was out of line with the political ideology of the time), was embarrassed by the flow of income it found itself receiving. Not being entrepreneurially inclined, it didn’t know what to do with it. Although Howard did not see eye to eye with Henry George and steered clear of government so far as he could, he nevertheless considered his “garden cities” to be the natural application of the Georgian ideal of freeing production from all taxation and funding public services with ground rents.

         Strangely, this most significant part of Ebenezer Howard’s work has fallen into eclipse even more than Henry George’s ideas. The innovation of financing the community from the private return to land and thereby dispensing altogether with local taxation has been forgotten in the literature of city planning. His book, Garden Cities of Tomorrow ([1902] 1965), has joined the class of pedestaled but unread classics. The purely physical innovations of his cities, on the other hand, such as design and density control, functional zoning, and greenbelt are remembered and widely copied. But what he himself may have expected would be his most remembered contribution is forgotten.

         Howard at first was uncommitted as to whether his Garden Cities should be structured as entrepreneurial ventures or, alternatively, non-profit trusts. But to secure the good will of the Fabian Socialists like George Bernard Shaw, who were among his foremost promoters, he chose the latter course. Nevertheless his accountant, C.B. Purdom, writing in later years, attributed the slowness of the two cities in getting off the ground and the general lack of vision of their subsequent management to the absence of any provision for equity in the ventures (1949: 345). Mediocrity of management may explain why the two cities remain obscure today. They have failed to do much more than provide an attractive residential environment for 80,000 people! As a supporter plaintively writes:


Howard and his associates made one propagandist mistake in siting Letchworth and Welwyn—building them in England within an hour’s journey of London. One should have been built on some remote island like Mauritius, and the other in the Soviet Republic of Uzbuzchakistan. Planners and journalists would then have visited them and written them up, and we should have had lots of illuminating books on them. Also we should be excited about them as wonderful achievements, and be wanting to know why we can’t have new towns of the same type in Dear Old Stick-in-the-Mud England.  (Osborne 1946: 36)


          Spencer Heath was an engineer, manufacturer, horticulturist, poet, and ultimately philosopher of science and social thinker who did his main work during the years of Roosevelt’s New Deal, an age of ascendant government in America. That he was not an academic and was “politically incorrect” may help explain why his social theories gained little hearing. The turning point in his thinking occurred in the early 1930s, when he concluded that proprietorship was the evolving alternative to politics. In 1936 he self-published a monograph, Politics Versus Proprietorship, in which he set out for the first time in print the rationale for the entrepreneurial community.

         Spencer Heath’s genius was to see that Henry George’s program, which would do away with all taxation of private production and finance public services from ground rents (hence the name “Single Tax”), was profoundly in the interest of landowners. For if landowners assumed all of the cost of public administration and freed private production from taxation and burdensome regulation, productivity would soar, sites and resources would come into high demand due to increased business activity, and the resulting higher location rents would cover the costs of government with a margin of profit to landowners. He believed enlightened real estate interests ultimately would take the lead in un-taxing private industry and, in their own self interest, shoulder the costs of government. Heath completed Howard’s concept by providing it with an entrepreneurial engine. By envisioning landowners assuming full responsibility for governmental functions, he anticipated the public business becoming private business—a wholly new field for entrepreneurial investment and enterprise.


         Paradigm of the Evolved Society


         If we paint pictures of the future with a broad-enough brush, we can often cover the entire subject and find ourselves “right on.” The more interesting predictions, because more difficult, are those that get into specifics. I’m confident in predicting that entrepreneurial community administration will replace political, and although timing isn’t to be construed as part of the prediction, I wouldn’t be surprised if it happened within the lifetime of some who are living today. Timing aside, however, the broad picture I envision is one in which self-sustaining communities will be the norm—entrepreneurial enclaves with land-leasing rather than subdivision as the land tenure of choice for most commercial, industrial, and residential uses. Taxation, licensing, regulation, and other restrictions on enterprise will belong to the past. The state will have withered, to borrow Marx’s image, unable to survive its functions being progressively better served in an ever-evolving marketplace.

         More detailed predictions are apt to carry me onto the shoals. Mindful of the danger, however, I am willing to venture answers to these frequently asked questions:


What will happen to national boundaries?

Already losing prominence due to the growth of cyberspace, I see national borders becoming relics of the past. For the sake of convenience, titular boundaries between federations of autonomous communities might arise following natural features such as bodies of water, or mountains, or cultural, linguistic, or other interfaces. Jane Jacobs’ insight that the natural collectives of society are cities rather than nation-states will become increasingly self-evident.


Will communities be all alike?

More than likely there will be variety far exceeding anything seen today, as communities specialize to appeal to every taste, each discovering its ecological niche in an ever changing and evolving economy. Even today, entrecomms vary widely within even a single type. Count up, for example, the different kinds of hotels. We find residential, resort, transient, ethnic, dormitory, casino, luxury or budget, and others, with subcategories and hybrids of each. 


How big will communities be?

Size necessarily will be determined by market considerations. Except perhaps for some highly transient and other specialized situations, I suspect that, as in tribal society, “optimal size” for management reasons won’t be larger that the largest “face-to-face” community, that is to say, not more than a few thousand persons, in which a manager can recognize all of the members at sight. At successive levels, such entrepreneurial communities will associate, informally or otherwise, as chain or franchised businesses do today, to accomplish functions that are better handled by cooperation at higher levels. Consumer preferences will always determine. Some communities will clump up together, resulting in high-density urban aggregations of population, while others will be rural. Inevitably there will be elaborate composites of communities of different types and specialties, smaller ones sublet within the matrix of progressively larger ones, very much as different kinds of atoms are mutually attracted to form complex molecules, and those molecules cells, and so forth.


Will society be democratic?

The word democracy, as ably summarized by E.C. Riegel (1978:77-81), has two meanings. It can mean individual autonomy where all are equal in their authority over their own person and property, or it can refer to a political decision-making process whose outcome is determined by voting. Jonathan Swift is said to have commented on the latter kind of democracy, wryly saying that “some people have no better idea of deciding right from wrong than by counting noses.”

         Political voting, while its intent, and very often for a time its effect, is to moderate autocracy, nevertheless entails people ganging up against one another. It is not a proprietary process. Rule by a voting majority can be as oppressive to the losers as the most autocratic regime. In land subdivision, where lack of responsible authority due to fragmentation of titles often leaves residents no option but to resort to a vote, we find the seed of the state.

Subdivisions governed by a homeowners’ association contrast starkly with entrecomms. The association board is charged with maintaining the streets and other common areas and amenities as well as enforcing a common lifestyle of the residents according to a pre-set standard. A major part of its role is to enforce the restrictive covenants in the deeds. Aside from maintenance, it is fundamentally a policing arrangement. The entrecomm on the other hand seeks to foster an attractive living environment that draws patronage. Compliance and patronage are very different goals, and the psychology varies accordingly. In the one the residents are subject to the deed restrictions and therefore, quite literally, are subjects. In the other, the residents are customers—indeed, patrons. Moreover, the association board must be rigid if it is to be effective, whereas the entrepreneur within his framework of rules must be flexible and accommodating, judging cases individually on their merit.  

         Owners’ associations are often called democratic, inasmuch as decision making is accomplished by voting. But entrecomms are not any less democratic; their residents vote each time they pay their land rent. A difference is that in the former, each individual casts votes not only for himself but also for others, determining matters that affect those others as well. In the latter, each casts votes only for herself or himself. These contrasting usages reflect very different meanings of the same word.

         Subdivision and leasehold will doubtless coexist well into the future, and therefore so will both kinds of democracy. While the outcome between the two will be determined by market preference, the wholly proprietary, nonpolitical form will likely prevail. One good reason is that leasehold permits flexible and continuous redevelopment even to the layout of streets and other common areas without infringing property rights, and this is an undoubted advantage in a world of rapidly increasing technological change. The more basic reason, however, is that land-leasing allows a community to be a business entreprise. Dependence of a business enterprise on profit affords an important measure of protection against arbitrariness not present in the subdivision arrangement (MacCallum 1996, 18: II.D.6 and footnote 6), and it brings to the provision of public services a dynamic altogether lacking in subdivided communities.


What about individuals who might prefer a subdivision lot to a ground lease?

At least at present and for who knows how long into the future, the idea of owning one’s own plot of land appeals to many people. Where there is a demand, the market will usually find a way to provide. Some communities doubtless will offer approximations of subdivision through the use of long-term leasing, including perpetual leases, paid-up leases, and life estates. But as a practical matter, something like fee-simple probably will be available in most parts of the world for as long as anyone cares to look ahead.


Will this be like feudalism?

Not feudalism, but manorialism; the terms are often confused. Manorialism is a form of agrarian social organization, whereas feudalism is a military order imposed on it, often by conquest, the two then becoming largely fused. Norman feudalism was imposed on predominantly manorial England after 1066.

         If the question is whether entrepreneurial communities would resemble manorialism, the answer is yes, but with an explanation. For although it was similarly structured, manorialism did not progress. The reason, presumably, is that it was before its time.

         A professor of mine at the University of Chicago, Sol Tax, once did fieldwork in the highlands of Guatemala and wrote a book called Penny Capitalism. He described a system of Indian markets that were purely laissez-faire in the best tradition of Adam Smith and apparently had been since pre-Spanish times. The question he asked was, if these people have such freedom, why aren’t they rich? The answer he suggested was that significant wealth creation takes much more than just freedom from constraints. It requires the complex institutional development of a market society. In Guatemalan native society, the firm had yet developed, lacking the array of supportive market phenomena on which it largely depends such as a world pricing system, banking and finance, insurance, and so forth. The unit of production was the family.

         The distinction between firm and family is crucial. Firms are impersonal in the sense that they have specialized, well defined goals, recruit on the basis of ability and experience, and are single-mindedly market oriented. Families, on the other hand, have necessarily complex agendas in which, for example, recreation, marriage, or paying respects to deceased members might outrank everything else. They cannot recruit or fire except in a limited way through marriage or divorce or by recognizing extended family ties; they must accommodate old Aunt Flora and irascible Cousin John.

          Manorial arrangements were family ventures and unbusinesslike from today’s perspective. Because of its more evolved nature and the fact that it will operate in an altogether different environment, a competitive, global economy with interlocking and supportive financial and service institutions of every description, an entrepreneurial community will do things the medieval manor could not have dreamed of. We make a fundamental mistake if we attempt to understand the whole of the entrecomm in terms of the medieval manor or the tribal village.


What will keep managers of entrecomms from becoming tyrants?

Look around us, and what do you see? If we searched the records of the hundreds of thousands of entrecomms in business today, we might find horror stories, but they would be exceptional and short-lived. Years ago I made a field study of the kinds of trouble situations that arise in mobilehome parks and shopping centers and how they were handled (1971). In the course of the study some highly entertaining case histories turned up, but none was a horror story. The fact is that businesspeople for the most part look out for their customers, for that is how they stay in business. If they get lax, they go out of business or someone buys the business and restores its profitability.

         By contrast, we need not wonder a great deal about political communities; we pretty much know what we can expect there. But we should not look for perfect consistency in either category, political or nonpolitical, for even heaven had its Lucifer. What counts is the characteristic behavior we can expect of business enterprise, which is premised on service, as contrasted with political enterprise, which is by its nature predatory. Either may step out of character on occasion, but such exceptions only point up the rule.


How will decision making take place at the global level?

Envision a deployment worldwide of entrecomms as autonomous communities of small to moderate size, many here and there clumping together in a great variety of ways to form denser aggregations of population. They will resemble what are called in anthropology “acephalous” or “stateless” societies, cooperating rather informally at various levels by networking. For this view I am indebted to the late anthropologist Virginia H. Hine (1977: 1984).


But isn’t profit the incentive driving all of this?

         Yes, it’s the incentive that makes any enterprise self-sustaining—enduring  because it serves. Commerce is much undervalued and underestimated. The great and growing trend today is for land to be administered as productive capital, and in this process we are witnessing the natural evolution of leasehold land tenures—precisely what Henry George, Ralph Borsodi, and others proposed as the cure for excessive speculation in land. But they didn’t see that cure coming about as a spontaneous market process, powered by ordinary business—profit—incentive. It is strange that no one before Spencer Heath anticipated it happening this way.


Why should such radical changes be happening quickly now,

rather than gradually over a long period?

We know from history that when conditions are right for a new kind of development, that development can come about very rapidly. In this case we need only recall the crucial role of numbers in enabling us to develop science and commerce, and then observe that something spectacular is happening today. The use of computers has increased our ability to manipulate not only numbers but information of all kinds by orders of magnitude, and this capability is progressing at an exponential rate. Moreover, the laptop computer and e-publishing, by creating a viable alternative to reporting downtown for work and bringing all the world’s libraries into the home, is empowering people as individuals and enabling an exodus from the regimentation of the work force. Here is a decentralizing process within the marketplace of awe-inspiring magnitude.

         For this reason among others, provided humankind survives in the near term, the entrecomm might become the community form of choice within a few generations. At that time, should this happen, we will not have overthrown but simply, without fanfare, we will have outgrown government as we know it today, and government personnel will become absorbed into more productive employment. Human society, which on the tribal level manifested the normal, healthy societal pattern albeit at an immature stage, will have matured and come into its own. Humankind will have negotiated at last this riser in the stair of societal evolution. It was surely a doozer.

Spencer H. MacCallum

Revised 2011








Dove, Patrick Edward. [1850] 1910. The Theory of Human Progression.

New York : Isaac H. Blanchard.


Foldvary, Fred. 1995. Public Goods and Private Communities: The Market

         Provision of Social         Services. London: Edward Elgar.


Heath, Spencer. 1936. Politics Versus Proprietorship. Privately printed.


Heath, Spencer. 1957. Citadel, Market and Altar.

Elkridge, MD: Science of Society Foundation.


Hine, Virginia H. 1977. “The Basic Paradigm of a Future Socio-Cultural

         System,” World Issues, April-May, 19-22.


Hine, Virginia H. 1984. “Networks in a Global Society,” The Futurist,

         June, 11-13.


Howard, Ebenezer. 1898. Tomorrow: A Peaceful Path to Real Reform.

London: Swann Sonnenschein.


Howard, Ebenezer. [1902] 1965. Garden Cities of Tomorrow.

         Cambridge: M.I.T. Press.


Jacobs, Jane. 1992. “Jasper and Kate on the Guardian Syndrome,”

Chapter 5 in Systems of Survival:A Dialogue on the Moral Foundations of

Commerce and Politics. New York: Random House.


MacCallum, Spencer H. 1970. The Art of Community.

Menlo Park, CA: Institute for Humane Studies.


MacCallum, Spencer H. 1971. “Jural Behavior in American Shopping Centers,”

Human Organization, Journal of the Society for Applied Anthropology 30

(spring): 3-10.


MacCallum, Spencer H. 1996. “A Model Lease for Orbis,”

         Formulations 3 (3), 16-23.


Maine, Sir Henry Sumner. [1861] 1986.  Ancient Law. London: Dorset.


Ogilvie, William. [1782] 1970. Birthright in Land–An Essay on the Right of

Property in Land. New York: Augustus M. Kelley.


Osborne, F.J. 1946. Greenbelt Cities. London: Faber and Faber.


Purdom, C.B. 1949. The Building of Satellite Towns. London: J.M. Dent.


Riegel, Edwin C. 1978. “Economic Democracy.” Chapter 9, Flight From Inflation:

The Monetary Alternative. San Pedro, CA: The Heather Foundation.


Spence, Thomas. [1775] 1920. The Real Rights of Man.

In Pioneers of Land Reform, edited by M.Beer. London: G. Bells.


Spencer, Herbert. [1851] 1969. “The Right to the Use of the Earth,”

Chapter 9 in Social Statics. New York: Augustus M. Kelley.


Tax, Sol. 1972. Penny Capitalism: A Guatemalan Indian Economy.

New York: Octagon Books. Original edition, Smithsonian Institution:

Institute of Social Anthropology 1953, Publication no. 16.


Whitehead, Alfred North. [1933] 1967. Adventures of Ideas.

         New York: The Free Press.



<<< 0 >>>

[1] Use of the term “community” has an interesting history in anthropology and is appropriate here (MacCallum 2010).

Posted in Uncategorized | Leave a comment

Art of Community (Book Review)

This article was published in the Summer 1996 issue of Formulations


The Art of Community


by Spencer H. MacCallum


Institute for Humane Studies, 1970

105 pages


reviewed by Sean Haugh


The Art of Community is my favorite kind of non-fiction. Such a book takes some mundane thing or custom and examines its history and current place in our society. From this study, the author can take off in any number of directions to shed light on a broader aspect of our culture.

In this particular case, Spencer MacCallum begins with the evolution of the modern hotel, and leads us to a deeper understanding of the meaning and usefulness of private space. Quite simply, this is the original manifesto of proprietary community as the basis for a free nation.

Picking up where his grandfather, philosopher Spencer Heath, left off at the end of his 1957 work Citadel, Market and Altar, MacCallum uses practical examples such as hotels, restaurants, trailer parks, shopping centers and industrial parks to illustrate a variety of methods available to property owners for creating and managing larger communities. Beyond centralized single ownership, MacCallum shows how individual property owners can pool their resource to create similar effects of privately administered spaces. Condominiums and planned subdivisions are good examples of how the latter form of pooled ownership associations is beginning to materialize.

The interesting thing is that all the kinds of community in which MacCallum sees the seeds of contract-based politics have arisen only in the last century. (He might object to my use of the word “politics” here, as he sees the new community as being beyond politics.) As we develop the theory of private space, we are often only a step ahead of real life trends. He draws our attention to the solid experience that refines and furthers our ideas. While reading the book, it sometimes seems that market forces will do our job for us, with or without our help.

Drawing on his background as an anthropologist, MacCallum devises an interesting theory of the state. Primitive tribes began as a form of proprietary community, with the tribal chief acting in the capacity of what we would now call the owner. As tribes grew, settling down and beginning trade with other tribes, conflict arose between them. The state, and along with it the principle of sovereignty, originated for purposes of warfare and protection.

While most anthropologists would see the state as an evolution of human society, MacCallum instead views it as an aberration. “Force is not an organizing principle in its own right, but a natural and primitive expedient in crisis.” (p.85) With the emergence of modern forms of proprietary community, MacCallum sees human society resolving this digression of the state, returning to our natural path of political and economic evolution.

Why has this colossal error, this wrong turn in human evolution, taken hold and triumphed to this day? MacCallum would say it is because we lacked the tools to maintain a properly functioning community. We needed to develop high tech social skills. In the beginning, community was based solely on kinship. Even with adoption and intermarriage, as societies became more mobile over wider areas, kinship alone could not assure stability of land-use management, nor of economic productivity. The manorial system that became feudalism was also an expression of these principles, except that the people lacked the freedom necessary to voluntarily make contracts, which is essential to a properly functioning proprietary community.

But today, we see all manner of proprietary communities springing up like mushrooms. The refinement and advanced flexibility of free contract has certainly been the major contributor. We also see new forms of community arising, corporations predominant among them. On many levels in our culture, people are redefining and realigning themselves. Community can now be based on anything and can have a broad range of functions. And given the advantages of coordinated land-use planning, these new communities can be highly profitable.

MacCallum never departs from his focus on the value of land. Our political history is seen in terms of trends in real estate. According to this thesis, the naturally concerned stewardship by a property owner (or owners) in the context of a totally free market will result in the most appropriate use of the land. From proper land-use planning flows community organization, harmony with the environment, economic prosperity, and most importantly, a clear path to our best possible human destiny.

The Art of Community is essential reading for those of us in the Free Nation Foundation. As we continue to refine our concepts of private and public space, this book is a basic source of ideas that we will turn to again and again. I thank Spencer MacCallum for giving us this excellent book, and also for continuing to develop his ideas within FNF. D 

Sean Haugh is a member of the Free Nation Foundation. He is the Editor of The Tarheel Libertarian, the newsletter of the Libertarian Party of North Carolina, and has been active in various libertarian and anarchist organizations since 1980.

Posted in Uncategorized | Leave a comment

Looking Backward and Forward

Home | About | Columnists | Blog | Subscribe | Donate

The following story is part of Walter Block’s Autobiography Archive.

Looking Back and Forward

by Spencer Heath MacCallum
by Spencer Heath MacCallum


An account of my intellectual path has to start before I was born – with my grandfather, Spencer Heath (1876–1963). He taught me most of what I know about thinking, and my own thinking is very much an outgrowth from his.

About 1898, attracted not by the Georgists’ attack on property in land but for their strong free-trade stance, Spencer Heath became recording secretary for the Chicago Single Tax Club and continued in close association with the movement for the next 40 years. He assisted Henry Geiger in founding the Henry George School in New York City and taught there for several years in the early 1930s, until Frank Chodorov fired him for not hewing closely enough to the Georgist line. By 1934, he had concluded that George’s animus toward land was misplaced and that the institution of land ownership was essential to a functioning society. Indeed, he came to believe that the further evolution of property in land was the key to society outgrowing its subservience to the state – which he saw as social pathology.

The story of my close association with my grandfather during the last half-dozen years of his life (he died in 1963 at the age of 86) actually begins in the Depression year of 1930. He had come down from New York for a visit in Winchester, Virginia where he found his daughter, my mother, in tears because my father thought they couldn’t afford a second child (my brother had been born two years earlier). My grandfather left the room. He returned moments later with a check for a thousand dollars, a princely sum of money in those years, and asked, “Will this help?” So, being bought and paid for, I was named after him: “Spencer Heath MacCallum.” Years later, when I became the only member of the family interested in working with him to publish his major work, Citadel, Market and Altar, and in preserving and carrying forward his ideas in other ways, he said it was the best investment he ever made.

A working relationship didn’t develop, however, until a chance happening in 1952, my sophomore year at Princeton. For a European literature course, I’d read Franz Kafka’s The Trial, an articulate nightmare expressing the paradoxical theme that no one deserves to live as a human being unless he goes through the act of destroying himself. I’d grappled with this argument for some six weeks and had become dangerously depressed when, one afternoon, “Popdaddy,” as everyone called him, drove through Princeton on a trip and stopped for a visit. I told him about Kafka, and we sat up all night in my room in Edwards Hall talking about it. By the first light of morning he had shown me, by a logic I felt Kafka would not have liked but would have had to accept, an escape from the paradox.

What, briefly, was his argument? As I look back upon it, it was that we must always seek to understand things in context. We must seek the relatedness of things. Kafka dismissed the outer world of events and only looked within for ultimate truth. But all he found there was a burden of negative feeling. He disdained looking outside himself. If we, on the other hand, look outside and around us, what do we see that could account for Kafka’s choice to look only within – and for what he found there?

We are the cultural heirs, Popdaddy suggested, to two legacies that have come down to us from very ancient times in various degrees of admixture. One is of slavery, from the easy-going lands and fertile plains where productivity was great and there could be the marching and marshaling of armies. The other is of freedom and cooperation, from the more rugged and mountain lands that could not support slavery because one man’s product could only support himself and his limited family with nothing left for a ruler class. Each of these legacies has a psychological component, and in particular that of slavery can be seen as twofold – the psychology of the slave and the psychology of the master.

What is the slave psychology bred into men over many millennia? It is that a person has no worth in and of himself, but only as he can serve someone else, in whom all worth resides. And the master psychology? It is to maintain control, the status quo, to an important degree by distancing one’s self symbolically and otherwise from the slave. The master is what the slave is not. And what is that? The slave works; he deals with the physical world. So his master eschews that world as beneath him – as the mandarin grew long fingernails to show he could not possibly do manual work. He cultivates instead the inner world, creating marvelous systems of religion and philosophy. But what would be the content of these? They would have little if any practical consequence, little development of science, since that, after all, would involve coming to terms with the outer, objective world, the province of slaves. They could not avoid having an emotional content, however, and what would that be? The smaller ruling classes could not have escaped the influence of the emotional life of the great surrounding sea of population, which was slave. This burden of feeling would have come down to us from the slaves, directly and non-verbally, and from the masters through our inherited systems of religion and philosophy.

Here was a unique perspective from which to view Kafka’s rejection of the outer world and also to explain what he found within. It sufficed for my need in the moment. What Popdaddy did not go into on that occasion but would elaborate upon subsequently was that there is an alternative to such pure subjectivism. The alternative is that that we can and do transcend this legacy as we develop knowledge (scire – science) of the world of which we are a part and come into our creative capacities by rebuilding that environment to our bodily needs and the inner dream. Then we experience the joy and fulfillment of creation, which God is said to have enjoyed in Genesis. As we do this, we rise out of our dependent creaturehood and become creators, an image Popdaddy made much of in his treatments of religion.

Helping me through the Kafka paradox and giving me a perspective from which to deal with my own inner feelings was something my professors had never attempted and, I felt, could not have done. So I began listening to what else this gentleman might have to say. What I heard was amazing. He maintained that the only realistic way to conceive of human society was in the total absence of government as we know it – the absence, that is, of any form of legislated laws or other institutionalized coercions. He believed that people in society are fully capable of providing for every social need through the further, free development of the normative institution of private property.

I was astonished to hear such extreme ideas from a person seemingly level-headed, who had been preeminently successful in not one but three careers in engineering, law and business. As a pioneer in early aviation, he had developed before World War I the first mass-production of airplane propellers that took the place of the man who stood at a bench and carved them out by hand, and by 1922 he had demonstrated at Boling Field the first engine powered and controlled, variable and reversible pitch propeller. Over the next two years, therefore, I listened closely and at times incredulously to every word he spoke, while interposing questions and objections, intent to know if he really was the purist in this regard that his words implied.

Prior to this, “Popdaddy” had been a vague figure in the family who was “always writing” but was unable to find a publisher. Looking back on it, anyone with his views would have had little chance of finding a publisher in the 1940s and ’50s. Now, having learned what his writing was about, I proposed that when I finished at Princeton, I’d help him self-publish his book. We’d do it together, I said. Thus began a productive working relationship. After his death ten years later, I collected every scrap of his writing, much of it in longhand, and numbered and transcribed each on typewriter for a total of more than 2,000 items: what I call the “Spencer Heath Archive.”

I was slow maturing and, in my teen years, was incapacitated in many ways by a severe stutter. Popdaddy found out about the National Hospital for Speech Disorders in New York City and offered me his apartment, which he only used at intervals, on Waverly Place just east of Washington Square in Greenwich Village. The apartment was within walking distance of the Hospital, where I could attend daily group therapy. I accepted his offer and left Princeton for a year. It was a wonderful year, having my own apartment in the Village, exploring the used bookstores on Fourth Avenue that I passed walking to and from the Hospital, and finding there and reading, among other things, everything ever written by Sir Henry Sumner Maine. After Princeton, I came back and spent another year with Popdaddy in New York and then at his country place, Roadsend Gardens, in Elkridge, Maryland south of Baltimore.

I graduated from Princeton in art history. For the required undergraduate thesis, I wrote on Northwest Coast Indian art, then went to graduate school in anthropology at the University of Washington in order to be able to be near enough to visit and learn first-hand something of Northwest Coast Indian life and culture. Because these people had had a traditionally stateless society, echoing Popdaddy’s ideas and those of Maine on the village community, my interest turned strongly toward social anthropology. Determined to write my Master’s paper on Popdaddy’s notion of an altogether proprietary, non-political community, for which he would often take the hotel as a heuristic model, I decided to read everything I could about hotels and write on the hotel as a community.

I went to Berkeley for a summer to take advantage of the good libraries there. Soon after I’d gotten well into reading about hotels, I discovered the shopping center. A month later, I was reading about office buildings, and then marinas, mobilehome parks and similar phenomena, all members of the class of the relatively recent and evolving phenomenon of “multi-tenant income properties.” Wanting to read everything about all of these, I extended my stay beyond the summer and through an entire winter. Returning to Seattle in the spring, I submitted my thesis. It was rejected. I devoted the summer to recasting it, and in the fall it was accepted. Several years later, following a suggestion made to F.A. Harper by Sartelle Prentice, Jr., the Institute for Humane Studies published it under Alvin Lowi’s suggested title, The Art of Community. “Art” in the title referred to the empirical art of community which I then saw developing in commercial real estate in multi-tenant income properties, paralleling the way that empirical arts like Toledo steel, dye making and the like had developed in the middle ages before we had any science or rational understanding of the matter.

At various times while at the Berkeley libraries, I would visit Baldy and Peg Harper and their family. I bought a lightweight bicycle propelled by a little Italian “Mosquito” motor and would bicycle over from Berkeley to Menlo Park. Baldy was an important mentor. We’d gotten acquainted when he was at the Foundation for Economic Education (FEE). I’d accompany Popdaddy on his occasional drives up the Hudson to FEE to visit with Leonard Read, Baldy, and others on the FEE staff. Baldy had a great sense of optimism about the future of humanity and by that time had clearly adopted, as his compass setting, the concept of a “total alternative” to political government. This became the ideal goal by which he corrected and guided his mundane decisions much as North Star enables the mariner to make continuous course corrections and so come safely into Liverpool. (My wife, Emalie, puts almost the same thing a little differently: “We must entertain the ideal of no government if we are ever to realize limited government.)

Baldy said that he didn’t know just how he had arrived at this philosophical position, but he thought it might have come about from John Chamberlain, who was Popdaddy’s friend, forwarding him a working draft of Citadel, Market and Altar. John had told Baldy that he didn’t really understand it but nevertheless thought there might be something important here; perhaps Baldy could make something of it. Baldy read it through several times and about a year later found himself advocating, as an ideal toward which to strive, a society totally free of structures of institutionalized coercion.

Considering Baldy’s role in my life as a mentor, it’s worth digressing here to say some more about this unassuming teacher with such a down-to-earth grasp of economics and impeccable intellectual hospitality who encouraged me to a better appreciation of Austrian economics, including Hayek. Although Baldy had been the first staff member recruited by Leonard Read for FEE at the end of World War II, Baldy could never prevail upon Leonard to adopt at FEE any but the conservative policy of promoting what was already discovered and known about freedom. Leonard may have felt constrained by the exigencies of fund-raising. Whatever the reason, Baldy felt there was much more to be discovered and wanted to give more encouragement at the growing edge of ideas. Without taking Leonard into his confidence, therefore, he began in the early 1950s to plan an independent institute, which would be called the “Institute for Humane Studies.” But he did take Popdaddy into his confidence, and they planned much of it together. For a campus, Popdaddy offered to donate Roadsend Gardens, his 100-acre country place outside Baltimore in the direction of Washington. Baldy and his family came down one weekend and walked over the land with Popdaddy and me, but ultimately Baldy decided that the then intellectual climate in California would be more hospitable for what he wanted to accomplish.

Baldy’s dream was to create a special kind of a community of scholars. He wanted to create an environment that would be conducive to breakthroughs in social thought. The Institute would cater to young people, recognizing that breakthroughs in any field tend to be made by the young. But it would cater also to seasoned scholars from many diverse fields (law, physics, biology, not excluding even the paranormal as represented by Dr. Rhine at Duke University) who were retired but intellectually active – and who could use the Institute’s tax-exempt status in pursuing their work.

The Institute would find living arrangements nearby and offer its library and other facilities including private office space, so that visitors – young people and senior scholars – could work alone so far as they liked or mix with others in the library and in the Institute dining room, as had been done so successfully at FEE. The active or vital ingredient in Baldy’s formula would be the give-and-take between seasoned scholars and enthusiastic youth. This interplay, he thought, would lead toward the breakthroughs he felt were sorely needed in contemporary thinking about society.

Returning to the thread of this account, while I was pursuing my graduate studies at the University of Washington and then at Chicago, Popdaddy had been invited to Santa Ana, California as a house guest of Frances Norton Manning, who had undertaken to actively promote intellectual contacts for him and had been very successful at it. On my visits there I became acquainted, among others, with Walter Knott, of Knott’s Berry Farm, John L. Davis, president of Chapman College, and Andrew J. Galambos and two associates, Alvin Lowi, Jr. and Donald H. Allen. The last three were colleagues in the defense industry. Galambos, an astrophysicist, was entrepreneuring with Don Allen on the side in mutual fund sales and in free-market education and was just then independently arriving at the notion of the “total alternative” (my phrase which Baldy and several others adopted). Al Lowi encouraged Galambos to found the Free Enterprise Institute (FEI), which quickly became a full-time proposition. Al was for some years “Senior Lecturer,” and Don managed the bookstore.

The main thing I learned from attending some of the basic courses at FEI was the multifaceted role that insurance could play in a free society. This was a major idea in Galambos’ teaching that had originated with one of his students, Piet Bos. Galambos’ ideas about intellectual property, on the other hand, made little sense to me. I came to believe, with Al Lowi, in the importance of giving credit for ideas, which is simply good scholarly practice, and that the time to contract about ideas is before they have been disclosed. I learned little from FEI that I hadn’t already learned in principle from Popdaddy, but Galambos had a profound effect on many people who gained their first vista of the “total alternative” through him, comparable to my awakening experience with Popdaddy. My relationship with Alvin Lowi, by contrast, has continued to grow through the years, helping stretch my intellectual grasp well beyond where it was with my grandfather and Baldy Harper. In particular, I’ve gained an appreciation from him of the meaning and implications of the scientific method. Alvin became well acquainted with Popdaddy in the short time before his death. Afterward, at the timely suggestion of Don Allen, he assisted greatly in organizing and evaluating the Spencer Heath Archives.

Soon after completing my Master’s at Seattle in 1961, I went on to the University of Chicago for a doctorate. Unaccountably, however, my work slowed down. I continued to get high marks in my class work, but often took many months to complete course assignments. Finally I dropped out, after fulfilling the residence and course requirements but short of the dissertation. For the dissertation, I had planned to do an ethnography of a shopping mall, looked at in its internal organization as a community of landlord and merchant tenants. In preparation for this, the University had given me a summer scholarship to drive the length and breadth of California visiting shopping centers and collecting case histories of dispute situations and finding how they were handled. This gave me a store of empirical data, and I selected the mall in which I wanted to do the fieldwork for my dissertation. That was not to be, however. My last accomplishment before leaving Chicago was publishing in Modern Age (9:1, Winter 1964-65) a paper that I still think important, “The Social Nature of Ownership.” For the summer of 1965, I was invited to consult on a project with the UCLA Economics Department with Armian Alchian and Harold Demsetz. I had difficulty fulfilling that commission.

I supposed my problem to be psychological. Was I not motivated? Why was I having serious problems tracking conversation where several people were present? The next ten years were a lost decade. I couldn’t start anything at all with the expectation of being able to finish it. Then, after all those years, the answer came. The diagnosis was severe hypoglycemia, which was largely resolved by the simple expedient of eliminating all sugar from my diet. I began to pick up the pieces of my life, but I never returned to academia.

About this time, a couple of interesting projects unfolded. The first was discovering the rigorously free-market monetary ideas of E.C. Riegel. He had been a friend of Popdaddy’s, living in Greenwich Village, in the last stages of Parkinson’s Disease when I met him. On a hunch that his papers might contain valuable ideas, knowing that Popdaddy endorsed his ideas on money, I kept in touch with the family who received his papers on his death in 1955. Ten years later I was on hand to save them from being dumpstered. Almost ten more years went by, and I showed an essay from them to Harry Browne, who in his best-selling You Can Profit from a Monetary Crisis (Macmillan 1974), called it “The best explanation of the free market I’ve seen.” A flurry of requests for the essay encouraged me to systematically examine all the papers and eventually edit and self-publish two books from them, The New Approach to Freedom (1976) and Flight from Inflation: The Monetary Alternative (1978). From Riegel I came to respect the notion of an abstract unit of value whereby exchange might be facilitated by simple accountancy among traders in the market. Issue of new units would be by traders monetizing their future productivity, then redeeming them as they offered goods or services competitively in the market. Inasmuch as political governments are not traders in the market, they would have no place in such an exchange system. Should such a unit of account come to be preferred over legal tender for its constancy, political governments would no longer be able to deficit-finance. Not being traders, they would have no issue power, and having no issue power, they would have no means of watering the money supply. This is radical thinking, but I have fostered interest in it whenever opportunity has arisen. Riegel’s material is on a website and soon will be on another.

The other project that developed about that time was with Werner Stiefel, head of Stiefel Laboratories, a family-held multinational firm. In exchange for a small equity in the project, Werner in 1971 commissioned me to draft a master lease form for a multi-tenant income property to be constructed somewhere on the ocean outside of any political jurisdiction. Werner had been profoundly influenced by Ayn Rand’s Atlas Shrugged and wanted literally to create a new country, to be called “Atlantis.” Inspired by Ayn’s “Galt’s Gulch,” he envisioned a place to which, as conditions became untenable in the United States (signs were even then showing), people could flee as they had to the United States when conditions deteriorated in Germany in the 1930s. Werner devoted a great part of his life and many millions of dollars of his own personal assets to this project. At a critical point he was at a loss to know what form of government he could institute that wouldn’t repeat the same, tired, round of tyranny of all governments in history. I made a suggestion. Among his assets at the time was a motel in Saugerties, New York. I pointed out that his motel was a community. It was a place, after all, that was divided into private and public areas, and he provided public services to the residents there. But instead of citizens, he had customers, and the provision and maintenance of community services was contractual, carried out through ordinary business means. Why not keep this entirely non-political form of community organization and transfer it to the ocean? People could own any improvements on the land, but the land itself would be leasehold only. By opting not to subdivide, he would preserve a concentrated entrepreneurial interest in the whole. The master lease form would be the social software that would generate the actual constitution of the community – which would consist of all of the leases and subleases in effect at any given time.

The lease form I worked up survived Werner’s project, and over the years it has taken on a life of its own as many people have critiqued it and added valuable inputs. It has become a prime heuristic aid in thinking through questions of community administration in the absence of legislation or taxation. Several iterations were published as a master lease form for “Orbis,” Orbis being one among a cluster of imaginary settlements in outer space. The reason for presenting it that way was to avoid calling attention unnecessarily and prematurely to the notion of settling the oceans outside the jurisdiction of nation states.

The most recent of many innovations in the master lease form over the years has been to incorporate into it, and hence into the contractual structure of the community, a system of natural law with appropriate procedural rules, authored by the late Michael van Notten, a protégé of the Belgian natural law scholar, Frank van Dun.

The idea of incorporating a system of natural law arose after several years of consultation with the Samaron Clan of northwestern Somalia. The Samaron are a traditionally stateless people, many of whom would like to come into full participation in the modern world if they could do so without coming under the domination of a government, their own or any other. Their idea of how to accomplish this is to lease a portion of their territory with access to the sea for a private consortium (governments or government agencies need not apply) to develop and manage as a purely commercial, multi-tenant income property writ large. This is described in Appendix B of Michael van Notten’s forthcoming The Law of the Somali: A Stable Foundation for Economic Development in the Horn of Africa. If successful, the Samaron would then have a thriving freeport like a latter-day Hong Kong in their own back yard, from which to pick and choose among the many opportunities it would offer for jobs, education, technical training, entrepreneurial venturing, investment, and so forth. It would be their stepping stone to the modern world.

Except for these projects, however, I continued to be apart from any very serious intellectual life until the mid 1990s. First, I was taken up for eight years beginning in 1976 with a private economic development project of my own that I stumbled into involving a village of pottery artists in Mexico. Because of space limitations I can’t describe it here, but it was successful beyond anyone’s dreams – for the village (see for example For me, it exhausted the modest inheritance that had sustained me. For the ensuing decade I had little time for anything but to work for a living. I worked as a very small businessman – and found it enjoyable.

The return to ideas came after my mother’s death in 1993. A small inheritance from her allowed me to turn my thoughts again to the phenomenon of society. In my wife, Emalie, I’m fortunate to have an outstanding in-house critic of ideas. An invitation in 1997 from David J. Theroux, of the Independent Institute, to attend a Liberty Fund Conference on “The Voluntary City” helped settle me once again into the groove of thinking and writing on social organization, and University of Santa Clara economist Daniel Klein has given constant encouragement. The first fruit of that Liberty Fund Conference was a constructive critique of the entire problem of homeowners’ associations scheduled to appear in Critical Review (winter 2004). A fresh perspective on environmental incentives will appear in the Journal of Libertarian Studies 17:4 (fall 2003). I’m also editing the late Michael van Notten’s The Law of the Somalis for posthumous publication, as well as a small, inspirational book of my grandfather’s The Spiritual Life of Free Men. Finally, I’m nurturing a growing public interest in E.C. Riegel’s work setting out the rationale for an abstract unit of exchange. If I could think how to do it, I’d perhaps like more than anything else to encourage thoughtful consideration of a highly original concept of my grandfather’s in the philosophy of science. It entertains the thought of reformulating physical science in terms of action rather than energy.

My mother maintained that her seventies were the best decade of her life. Two years into my own seventies, I’m finding the same thing. In the small Mexican town of Casas Grandes, Chihuahua, fifteen miles from the pottery village of Mata Ortiz, Emi and I have bought a century-old adobe. We look forward to making the most of life there, including entertaining friends who visit. I plan to continue writing and hope to inspire in a few others the passion for life that I’ve come to feel in these later years.

December 19, 2003

Spencer MacCallum [send him mail] is a social anthropologist currently living in Casas Grandes Chihuahua, Mexico.

Copyright © 2003 LewRockwell.

Posted in Uncategorized | Leave a comment

E.C. Riegel on Money


Spencer H. MacCallum 

January 2008 


Edwin Clarence Riegel (1879-1953), better known as E.C. Riegel, was an independent 

scholar who dedicated himself in the 1930s to understanding exchange, thinking that a 

simple and dependable means of exchange would do more to enhance the dignity and well 

being of the common man than any political reform. Before that, he had been active in the 

consumer movement in the 1920s and 30s, launching, as president of the Consumer Guild 

of America, virtually a one-man war to make America safe for the consumer, publishing 

four books in the first two years: The Yellow Book (1927); Barnum & Bunk: An Exposure 

of R.H. Macy & Company (1928); The Three Laws of Vending and Main Street Follies 

(1928). His principal writings on money are The Meaning of Money (1936), Private 

Enterprise Money (1944) and, posthumously, The New Approach to Freedom (1976) and 

Flight from Inflation: The Monetary Alternative (1978). 


Riegel conceived of money as simply number accountancy among private traders. As he 

came to see it, any exchange medium is still direct barter to the degree that it has any 

intrinsic value. Fully evolved money enables traders to escape altogether the limitations of 

direct barter and achieve “split barter,” enabling the purchaser in a transaction to make 

payment at such time or times, and to such a party or parties, as he might choose. 


Riegel’s ideas do not coincide with those of any established monetary school. Traditional 

views of money lie along a spectrum from those of the “hard money” theorists who favor 

least possible government intervention in the free-market process, and those of the “fiat 

money” theorists who are quite comfortable with statism, viewing money as a creation of 

government and requiring no intrinsic value or anything more than government 

management of money issue. Ironically, Riegel came down on the side of a rigorously 

free-market fiat system; for a mature exchange system as he conceived it would depend on 

no intrinsic value at all, nor would it require or tolerate any government participation. In 

that sense, the fully evolved exchange system would be a natural system operating entirely 

as a spontaneous, free-market process with no political mandates imposed. 


Since most people assume that money must have intrinsic value and/or some degree of 

government management, Riegel’s idea of true, i.e. fully evolved, money requiring neither 

has been difficult for people to grasp. It might be easier to understand his concept as a 

moneyless exchange system – although his idea of the evolution of exchange from 

primitive, direct barter to true money as mere number accountancy among traders in the 

market place has an elegance about it. 


Riegel’s idea of a fully developed exchange system can be understood in terms of “trading 

circles.”  B has a lumber company, and A is a furniture maker. A buys lumber from B to 

make furniture, paying him with valuns (Riegel’s contraction of “value units). B then 

spends the valuns as he likes to purchase what he needs, as do those farther down the line, 

while A proceeds to make his furniture. When A completes he furniture, he offers it for 

sale competitively on the market and accepts valuns. 


Who issues valuns? If A’s balance with the system accountant is zero or negative, then the 

valuns he pays to B are new issue; if not, then they are simply valuns circulating in the 

trading circle. None but the system accountant knows which they are. If they are new 

issue, then when A sells his furniture and accepts valuns for it, he redeems his issue, and 

his account with the system accountant comes out of the red and into the black. Valuns 

may be thought of as mutual credit tokens. To qualify as a member of a trading circle, one 

must agree to put product or services competitively into the market and to accept valuns in 

payment. There can be no question about people’s willingness to redeem their issue; that, 

after all, is what they are in business for. 


There might be numerous trading circles, each with its own accountant but its valuns 

indistinguishable from those of other trading circles. The accountant assigns each member 

of his circle a credit limit based on experience with that member’s type of business, 

charging a small fee to cover bookkeeping and insurance against default. Thus might 

different accounting firms form competitive trading circles, charging less or more for their 

insurance depending how lenient or strict the credit limits they allow. The circles would 

cooperate under a board of governors to conduct research into optimal credit limits for 

different lines of enterprise and to periodically perform credit clearances among the 

various trading circles.  


Some advantages of the valun plan are that: 


(1) It would facilitate micro and start-up enterprises that, under the existing political 

system, cannot qualify for bank loans. For it would enable them to monetize their future 

productivity which, after all, is the backing of every valun. 


2) It entails no interest because, except for the occasional, small personal loan, there need 

be no lending. A business person issues new valuns as needed, according to his credit 

limit. This is an attractive feature for Islamists, since it accords with their religious 

stricture against interest. 


(3) It does not require or tolerate participation by governments. Because governments are 

not traders offering goods and services competitively in the market, they cannot qualify as 

participants in a trading circle. Consequently, they cannot issue units into it and dilute the 

valun. The resulting constancy of the valun relative to political monetary units promises to 

be a boon for all business accounting and planning. Riegel observes that long-term 

business planning today, dependent on political units that are continually changing in 

value, is like a builder trying to build a house using a yard stick that varies in length from 

day to day.  


(4) Because of their relative stability, valuns would likely become the preferred unit of 

account over dollars or other politically issued units of value. To the degree this happened, 

it would eliminate deficit public spending, effectively limiting governments to what they 

could collect in taxes and hence severely curtailing military adventuring and warfare. 


Because Riegel proposed trading circles long before the Internet, he describes a valun 

system operating with paper checks. The Internet would vastly simplify its 

implementation. Central to Riegel’s concept is the valun as a stable, wholly subjective 

value unit. He proposed launching a valun system with the valun at par with an existing 

political unit such as the dollar, much as the United States dollar historically was 

introduced at par with the Spanish dollar and then gradually went its own way. Just as 

people internalize the value of a political unit such as a dollar, so they would internalize 

that of a valun. Over time, the political unit would diverge from the valun as it became 

diluted by new infusions of units, whereas the valun would remain constant or show little 



Riegel may have been the first person ever to call for the separation of money and state. 

Rather than advocating political monetary reform, he forecast the continued, natural 

evolution of exchange towards true money, which would be altogether apolitical. He also 

was the first to predict the global inflation we are now experiencing. Seeing how all 

political monetary units are inflating and “sliding into the sea,” he urged study and 

implementation of the valun plan. For inflations in the past were local or regional; there 

always remained some unit, such as the British pound in the 19th century and the dollar in 

the 20th, to which businessmen could escape to carry on their accounting. 


Today there is no such unit. Should accountancy everywhere fail for want of a sufficiently 

stable unit of account, the global economy would fail. Hence the urgency, as he saw it, to 

set up a unit to which business might flee before that occurred (that is the significance of 

the book title, Flight from Inflation). For a thoughtful discussion of Riegel’s ideas, see 

David Boyle (2003). 


Understandably, Riegel’s ideas are controversial. They stand alone and have no academic 

pedigree. In The Meaning of Money, however, Riegel debated successfully with Irving 

Fisher’s world authorities on the meaning of money and conclusively showed the lack of 

any consensus on the subject. Friedrich Hayek, in personal correspondence with Riegel’s 

literary executor and editor, Spencer MacCallum, expressed reservations about Riegel’s 

proposals. Harry Browne in You Can Profit from a Monetary Crisis (1974) similarly 

doubted the workability of a valun system, even while calling The New Approach to 

Freedom “the best explanation of the free market I’ve seen.” On the other hand, James 

Peter Warbasse (1946:113), dean of the Cooperative movement in America, endorsed the 

valun plan. 


Riegel’s prose is remarkable for its clarity and style; the reader can take pleasure in his 

crafting of words and simplicity of expression. The substance of his writing above all 

makes the reader think profoundly about the nature and functions of money. But for an 

accident of fate, most of the papers containing his writings would have been lost on his 

death. That story and the little that is known of his family background and life are 

recounted in the Editorial Preface of his posthumously published Flight from Inflation. His 

writings can be found on the web at several sites:,  and 




Boyle, David  

2003 The Money Changers. London: Earthscan 


Browne, Harry  

1974 You Can Profit from a Monetary Crisis. New York: Macmillan. 


Warbasse, James Peter 

1946 The Cooperative Way: A Method of World Reconstruction. Chicago: Cooperative 

League of USA. 




Riegel, E.C.  


1978 Flight from Inflation: The Monetary Alternative. Los Angeles: The Heather 



1976 The New Approach to Freedom. San Pedro, CA: The Heather Foundation 


1944 Private Enterprise Money. New York: Harbinger House  


1936 Irving Fisher’s World Authorities on the Meaning of Money. New York: Consumer’s 

Guild of America

Posted in Uncategorized | Leave a comment