Essay: Radical Commerce

The General Assembly has adjourned sine die, and there were certainly some dramatic moments. But for the most part, the Virginia Way prevailed, and parties that can appear diametrically opposed at a national level came together at the state level to enact legislation.

But looking back on the legislation that failed, we are reminded that the Virginia General Assembly is indeed influenced and informed by the national conversations on hot-button topics. One such conversation nationwide has been the subject of minimum wage, and reviewing the Virginia legislation pertaining thereto, it reminded me of our country’s fundamental misunderstanding of commerce and economics in general.

The General Assembly introduced no fewer than eight bills that sought to raise the minimum wage from the federally-mandated $7.25 per hour. All of these bills were killed in committee or sub-committee, but that there were this many attempts to force business owners and employers to raise the price of labor is telling. In 2015, there were 5 attempts; In 2014, there were 3; In 2013, there were zero. Clearly, the conversation is gaining traction, at least among one faction of Virginians.

The table below shows the bills introduced – five by the House of Delegates, and three by the Senate:

Minimum Wage Legislation – 2016
Bill Sponsor Wage Increased to: Status
HB597 Plum $15.00 Tabled
HB623 Krizek $10.10 Tabled
HB988 Lopez $5.00 for tipped employees Tabled
HB995 Levine $10 Tabled
HB1258 Rasoul $11.84 and indexed to CPI Tabled
SB88 Marsden $10.10 Passed by
SB129 Edwards $10.10 Passed by
SB668 Favola/Dance $15.00 Passed by

 

While these all died, at the same time another national conversation surrounding commerce was evident in Sen. Carrico’s SB41, which prohibits the Commonwealth from punishing any person or business because of their stance on marriage. This bill passed the House and the Senate and is awaiting action from the governor.

Let me be clear up front: I am absolutely opposed to a compulsory minimum wage. It is functionally equivalent to compulsory maximum prices. What difference is there if I am required to pay for labor above a certain amount so there may be more money to transact, or if I am required to set prices below a certain amount so that there may be more money to transact? But worse than that, the mandatory minimum wage is a logical contradiction with dangerous consequences: it is compulsory commerce.

Which brings me to an opening salvo of what I humbly hope can restore to the reader to a proper understanding of what has too long been lost: Radical Commerce.

On Commerce and Profit

Sadly, the dialogism taking place in both of the issues above is in the context of a nation that has forgotten that commerce is radically free. That is, at its root – its radix commerce is a liberty enjoyed between two peoples. Compulsory Commerce removes liberty and choice from the equation making it not commerce at all, but rather a regulated mercantile.

Again, at its root, commerce is derived from two merchants – (the merce) coming together (the com). By coming together, they exchange merchandise – each one obtaining a profit from the other. Let me reiterate, radical commerce involves merchandise between merchants at a market or mercantile. These words are all related, of course, but they are also derived ultimately to the Latin verb merere – i.e., to receive what one is due share or price, whence we get our word “merit.” They meritoriously engage, each one freely improving their situation by such engagement, which is also known as profit.

(It is true, that one party may not seek actual improvement, but that it engages so as to prevent damage or loss to their current state of affairs. Insofar as this is an attempt to improve a trajectory of degradation, the principle remains the same, and can therefore likewise be defined as improvement or profit.)

To say it one more time, mutual profit is the foundation of commerce. But our American understanding has drifted so far away from this foundation, even to the point that the word “profit” has pejorative connotations that are equal to those sins of greed or theft. I believe this is because “profit” is no longer considered an improvement upon a current state of affairs, but rather limited to an increase in money.

An increase in money may indeed be one way to profit, but to limit the concept of profit to a single example is a logical fallacy. Profit may also be obtained physically in other goods (I improve my state of affairs with your shovel while you improve yours with my axe); it may be obtained intellectually (I improve my state of affairs by listening to your lecture on quantum theory – even if you require that I pay); it may be obtained spiritually (the removal of spiritual guilt, the assurance of eternal life, etc.). The point is that “profit” cannot be understood to involve only the increase in a quantity of money.

To return again, when two people engage each other to improve their respective state of affairs they are engaged radically in that which is now called commerce.

Commerce must be radically free because if it is not one is compelled to participate at the market under conditions which he otherwise would not. In other words, in compulsory commerce, at least one party is denied the full extent of his rightful profit he would otherwise have secured. This is not commerce at all, rather it is theft. For theft may be defined basically as profiting from another’s affairs without his informed permission.

Under normal circumstances, if Party A profits without Party Q’s informed assent, or in spite of Party Q’s informed dissent, we renounce Party A as a thief, a con-man, a liar, and demand justice for Party Q.

But if that which we call “government” has compelled Party Q to comply with Party A’s quest for profit, we suddenly are willing to renounce Party Q for his non-compliance, and demand further “justice” for Party A, which “justice” indeed is nothing more than Party A’s increased profit without the informed permission of Party Q.

Compulsory commerce, then, in the final analysis becomes functional larceny with a positive feedback loop, with Party Q ever at the mercy of Party A’s quest for further profit; the ultimate consequence of which quest is Party Q’s being reduced to mercantile slavery, with no hope of freely improving his state of affairs.

So we see that Freedom is the engine of commerce. We must consider radical commerce as a mutually beneficial, or mutually profitable enterprise between two or more parties at liberty to exchange with informed permission. Often money is involved in commerce, but it does not have to be. But even if money is involved, this does not change the nature or the essence of radical commerce. It only changes the convenience. But this is another element of commerce America has forgotten: that money is nothing more than a convenience in commerce – it is not its engine.

On Money, Currency, and Value

Again, money is a convenience of commerce; it does not deserve to be called the engine of commerce any more than rails deserve to be called engines in a locomotive. Both money and the rails make easier the movement of commerce and trains, ameliorating the friction of transportation and transaction.

Money does not have special essential properties that differ from any other thing. Any thing can be used as “money,” though there are certainly some “things” that are more stable (and therefore more desired) when recognized as money.

What money does have – especially when it is generally and popularly recognized as such – is representative properties, or virtual properties. This is what makes money convenient – that is, that which brings two things together. It holds for each agreeable party that which we call currency, or a representation of current value, or a value that, like a river, may flow freely and uniformly from one point to another. Money, to be accepted as currency in commerce, must be mutually agreeable to all parties involved. That currency is often legally established by government – that is, established through legislation with the consent of the people – does not make legislation a necessary condition for money to be current. It is precisely the consent of the people engaged in commerce that makes money current, not the legislation per se.

In radical commerce, when governments attempt to establish currency without consent, this currency is called fiat – not because it is not “backed” by a commodity, but because it is not backed by the consent of commerce. Fiat currency is the most vulnerable to corruption and volatility – its validity held over a fire by a single, fraying thread, that thread which is called “belief.” Belief in the fiat – the “so let it be done” – of a government comprised of men and women essentially equal to those of the governed. Belief that this government may predict and control every variable and adjust their fiat accordingly. Belief that others will continue to believe this fiat the same as you.

But returning to money that is current by the consent of the parties involved, simply because the currency itself has agreed upon value – that is, each party agrees that one dollar is equivalent to one dollar – this does not mean every transaction of currency has equal value.

By “value” we mean the subjective worth or merit of merchandise in the market by each merchant engaged in commerce. It is, radically, the power and competence – the ualere, the valiance, the valour – that a thing holds over an individual. And just as every relationship between two persons is necessarily different, so is every relationship between a thing and every individual it encounters different. And we see therefore, that every thing’s value is for every person necessarily different, however minute the differences among persons may be.

For example, a sock holds a certain competence and power over a cold-footed person that exceeds the competence and power it has over a warm-footed person. This is, or should be, easily discerned: The sock has more value for the former than the latter.

The merchant then is the subject of a thing’s value, and expresses a thing’s power over him – considering consciously and subconsciously countless variables – in a quantifiable measure of merit. With current money, the merit of a thing for one subject could quantifiably be equivalent to two dollars; but it could also be quantifiably equivalent to three socks, or one particularly bad book. But for another subject, the merit of that same thing – with no change in its essential properties – could quantifiably be equivalent to ten dollars, or forty socks, or one particularly good book.

Likewise, the labor of a gardener for half a day might, for the garden owner, be worth twenty gallons of gasoline; but for the gardener it may not be worth twenty gallons of gasoline, but rather ten gallons of gasoline, two large pizzas, and a gallon of milk. As a compromise, the garden owner and gardener may agree that fifty dollars represents adequately both parties’ measurements of the labor’s merit, the merit of the gasoline, the merit of the pizza, and the merit of the milk. But again, this value – this measurement of merit – is arrived at subjectively, freely, voluntarily, and without compulsion. They have agreed that fifty dollars for the gardener is equivalent to fifty dollars for the garden owner, but they have not agreed that twenty gallons of gasoline is equivalent to ten gallons, pizza, and milk. That is to say the money is current, but the items the money represents is not.

So we return once again to see that money is nothing more than a representation of value. It may be current in and of itself, but this does not mean the things it represents are current and that these things have the same quantitative worth for every individual.

It is the same for socks as it is for labor. One sock may provide more warmth than another, and is for the cold-footed individual, more meritorious to him. One gardener may be meticulous and efficient while another is ignorant and clumsy. Surely the former may be ascribed more merit than the latter, at least to the garden owner who craves meticulosity and efficiency.

But what we see more and more today is not just that the currency of money should be agreed upon, but that the currency of goods and services this money represents should also be current. That is, we believe one unit of labor is necessarily equal to another, regardless of the laborer. We believe one unit of sockage is necessarily equal to another, regardless of the material or the skill of the maker. We assume that money may, or must, measure the merit of a man. We consider ourselves – or a third party – master over the value of a thing, whether by legislative fiat or angry protestation. In short we consider value subject to our power, not we subject to the power and competency of value.

The convenience of current money has indeed eased the friction of transporting twenty gallons of gasoline just to secure the labor of a gardener, or forty socks. But it has also had the deleterious effect of creating an essential distinction between buyer and seller. It is deleterious because no such distinction between buyer and seller exists.

On Buying and Selling, and Employment

We live in a society now in which one may readily distinguish between buyer and seller by which has the money. He who pays money for goods or services is the buyer; he who provides goods or services for the money is the seller. But if money itself is distinguished by its virtual properties rather than its essential properties – that is, money-qua-money only represents value rather than intrinsically possesses it – then the distinction between buyer and seller based on money is likewise a virtual distinction, and not an essential one.

Instead, we may logically posit that both merchants engaged in commerce are both buyer and seller at the same time, distinguished only by their relative interaction – or transaction –  to the other.

To illustrate, Party A walks in to Party Q’s shop to buy a shovel. He has no currency, but he believes his axe will suffice as money to exchange for the shovel. If Party Q is agreeable – that is, if Party Q sees profit in securing an axe – then Party A is correct: his axe suffices as money to purchase the shovel of Party Q. But Party A is not simply buying a shovel; he is selling his axe. Likewise, party Q is not simply selling his shovel; he is buying an axe with his shovel. Thus we see that both Party A and Party Q are both merchants, both buyer and seller – both engaged commercially for mutual profit.

Likewise we see this same relative transaction when currency is involved. If Party A buys a shovel from Party Q with fifty dollars, he is not only buying the shovel: he is also selling his fifty dollars. Party Q is both selling his shovel and buying fifty dollars from Party A.

To continue, this relative transaction is not limited to goods. It also applies to services and labor. A gardener may sell his skill to buy fifty dollars from the garden owner; the garden owner may sell fifty of his dollars to buy the gardener’s skill.

This concept is so rudimentary, yet so important, to the nature of radical commerce. But yet we succumb perpetually to the temptation that considers only the party that holds the money as the buyer, and only the party that holds goods or services as the seller. Nothing could be further from the truth.

So when engaged in this commerce, we may naturally conclude that all parties engaged in transaction are what we colloquially call “the customer.” The business owner is as much the customer of his clients as his clients are customers to him. They exchange representations of value freely and voluntarily to achieve mutual profit. The proprietor of a fast food restaurant is eager to buy the currency of his customers by selling hamburgers to improve his state of affairs; the patron of a fast food restaurant is eager to sell his money to buy hamburgers to improve his own. The proprietor is likewise eager to sell his currency in exchange for labor, just as the laborer is eager to buy the currency of the proprietor by working.

In perhaps what may seem the most drastic extension of radical commerce, not only are all parties “the customers” – both the buyer and the seller – but they are also both the employer and the employee. This will seem less drastic with proper exposition.

We commonly think of the employer as he who owns the property and may disburse that property as he sees fit. We extend this thought to mean the employer is he who has the money, the capital, or the ownership of the business. But while the former definition is appropriate, the latter extension is not.

Indeed an employer is one who may distribute his property as he sees fit; and the employee is the recipient of that property. But too often we forget that fundamental to the idea of property is first and foremost the idea of self-propriety. That one is his own person and not another’s is a crucial point in the idea of commerce. For out of the maxim that an individual’s mundane ownership of himself we also see that his exertions to produce – his labors – are also his own. What he does with these physical or mental exertions – whether potential or actual – is for him to choose.

We follow naturally from this that what this man gains in exchange for selling his skilled exertions is likewise his own property – whether that gain be currency, a sock, or gasoline.

So we see then, that when two property owners are engaged in a commercial transaction, they are radically – again, at their roots – both employer and employees. Party A, as the laborer, is the employer over the business owner in the sense that he may disburse his property – his self-propriety, his skilled mental and physical exertions – as he sees fit. By agreement, the business owner is as much obligated to sell his own labor (commonly in the form of wages) as the laborer is to sell his (in the form of service). The laborer may contract his business-owner employee for a number of years to provide his labor in exchange for currency, and if his business-owner employee violates the terms of the contract, he may freely terminate and ban him both as an employee and a customer.

The business owner is likewise the employer over the laborer, as he disburses his property on agreeable terms. So we see that both parties disburse their property – whether in the medium of currency or manifested in a skilled service. Both parties are at the same time employee and employer, both are the customer, and both are the buyer and seller.

That businesses commonly use current money as a representation of property, or self-propriety, again does not mean that money has intrinsic or essential value that may automatically rend a schism between he who holds the money and he who wishes to buy the money. Irreconcilable expressions of value may indeed rend that schism – that is, if the fast food restaurant owner only values the necessary labor at two socks per hour, but the laborers unanimously value their skill at twenty socks per hour, a compromise is unlikely. But money, especially current money, has no such power except that we hold fast to the belief in its magical qualities.

So what does this mean for the two issues identified above – the battle over minimum wage, and the battle over where religious freedom and commercial obligation intersect?

Again, when a mandatory minimum wage is established, it compels at least one party in a commercial transaction to purchase property (or self-propriety) at a rate which he might not otherwise have purchased it. It likewise forces another party to sell his service, his skill, his propriety at an efficiency or value beyond his abilities. While the latter party may be slow to object to this, it makes a man no less complicit in commercial larceny when he acquiesces to compelling another to give up his property at a disagreeable frequency.

In the other, in which the General Assembly is simply reasserting rights that naturally belong to business owners as customers – that they not be forced to purchase money from a party in a situation disagreeable to their conviction.

What would we say in any other situation in which a party was compelled to purchase the property of another, provided that property was offered freely and that party had the means to purchase? Would we acquiesce to the mandatory purchase of socks by every customer that had five dollars with them?

The objection may arise that we as a society have agreed to distinguish between buyer and seller by establishing places of public commerce, and that when one party agrees to participate in public commerce, he likewise agrees to the rules that regulate that public commerce – thus allowing for the compulsory purchase of currency from patrons, and allowing for regulated minimum wage. The objection is noted and understood – but the problem with public regulation of public commerce is that when it does not adhere to or recognize the essential functions of commercial interaction, it is just as liable to favor the landowner or the commercial tenant as it is to favor the shop patron or the laborer. Such abuses against property we have seen throughout human history, but yet we still fancy ourselves as masters over mercantile value.

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