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!
PROPERTY AND ITS PRODUCTIVE ADMINISTRATION
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.
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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
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