The Fabric of Economics

And the Fundamental Paradox of Leftism
The Fabric of Economics

And the fundamental paradox of leftism

Should or Should Not (Morality)

Humans exchange things with other humans, which is half of the study of economics. Humans maximize the use of scarce means – time, labor, land, etc. – to improve their situation, which is the other half of economics.

To study economics – the relationships of human exchange and the way in which humans use means to satisfy their ends – we have to introduce two terms that the modern public finds particularly unpleasant. Morality is often exclusively thought of as a set of divine laws thrust upon humanity. Duty is often thought of as a rigid role we are coerced into by an oppressive society. Often, we encounter people that want to impose on us their own morality, leaving us with an unpleasant disposition towards these words.

I think of morality as Human Nature or Human Choice given a set of circumstances. With this definition, morality is a component of humanity (social beings) that can be studied and understood. If a reader can overcome whatever baggage he has attached to the words "morality" and "duty," then with significant help from Lon L. Fuller 1 and Murray N. Rothbard,2 we can deduce some rather fascinating facts about humanity and the incompatibility of it with leftism (socialism and Marxism).

We are social animals that live in close proximity to one another, so we obviously have some basic guidelines (morality) that we have to follow in order to live among another. Even the self-labeled "nihilists" follow certain guidelines. Furthermore, since we are each trying to improve our circumstances, we tend to discover better ways (morality) of doing just that. Those better ways of improving ourselves can be called "moral" or something else, just as long as we have some term to refer to.

Morality of Aspiration

This is the morality of the Good Life; the morality of excellence; the morality of the fullest realization of human powers. The morality of aspiration begins at the top of humanity. It tells us that the actions that lead us to some higher state are good and actions that lead us further from that higher state are bad. The morality of aspiration simply tells us to be better, which is an inherent instinct of any cognizant creature to begin with. When one person urges another to eat healthy, he is appealing to the morality of aspiration. When one person picks up a difficult book to read, he does so out of a desire to improve his circumstances.

A lack of aspiration is to be considered a failure, not a wrongdoing. A man can fail to realize his potential but should not be criminalized for that failure. There is no law that can compel a man to live up to his full potential.

The morality of aspirations applied to law, can only exclude from a man's life the more obvious of pure chance. It cannot enforce the Good Life upon him. This morality must come from a top-down approach; it must be assumed that there is a Good Life and that certain action will result in a step closer to it while other action will result in straying further from it. The morality of aspiration simply tells people to be better and pursue their interests, but it cannot tell them what their interests or the Good Life is. That must be discovered individually.

In summary, all intelligent creatures want to improve their situation. The patterns or guidelines required to do that can be studied so that we can more effectively improve. The study of those patterns or guidelines is called "the morality of aspiration" by Fuller.

Morality of Duty

Where the morality of aspiration begins at the top of human action, the morality of duty begins at the bottom. The morality of duty emphasizes the basic requirements of social living. Where morality of aspiration deals with that which should be achieved, the morality of duty deals with that which should be condemned.

Duties obey the principle of reciprocity. Duties are an exchange between people, but not always an explicit exchange. You have a duty to not steal my property despite never having explicitly come to an agreement with me that we would not steal from one another.

Humans act in the world to achieve their ends and have to work with other humans in order to do so. As such, those actions require the implicit and explicit principle of reciprocity so that a human can achieve his potential while not sabotaging another's aspirations to do the same. For brevity, let us refer to this as "morality" rather than the "behavior of intelligent social beings to minimize negative consequences from other social beings."

Obligations that are essential for living among other social beings cannot be subjective since the lack of these obligations have real consequences. As such, these minimum obligations certainly can be studied and comprehended. The counterargument is that social living obligations are not grounded in social nature of cause-and-effect which reduces down to the nonsensical belief that mankind is not a social being. Even non-human animals obey certain principles of reciprocity.

The Two Moralities

In summary, the two moralities are the way in which a person can improve himself (the morality of aspiration) and the basic requirements to live socially (the morality of duty). The ancient debate is where the line is drawn between the two.

If the morality of duty reaches upward beyond its proper sphere the iron hand of imposed obligation may stifle experiment, inspiration, and spontaneity. If the morality of aspiration invades the province of duty, men may begin to weigh and qualify their obligations by standards of their own and we may end with the poet tossing his wife into the river in the belief – perhaps quite justified – that he will be able to write better poetry in her absence. 1p. 27-28

The Puritans attempted to draw the line higher in an attempt to force more obligation than necessary on humanity, which is why they are despised even today. The other extreme is that of the compulsive narcissist who relieves himself of obligations when it is not in his interest, perpetually taking advantage of those around him. We will see shortly that the modern left strongly exhibits traits of each. It attempts to force obligations on others (the morality of duty) by appealing to "safety" or equality of outcome. Paradoxically, the modern left also rejects the morality of duty when claiming that people should not engage with one another in free exchange; and that it is in their interests (an appeal to the morality of aspiration) to not do so.

Do or Do Not (Economics)

I. The study of the relationships of exchange; the way in which individuals pursuing their interests will benefit other individual's interests when engaging in trade.

II. The study of the principle of marginal utility: the principle by which we make the most efficient use of the resources at our command in order to achieve whatever ends we have set for ourselves.

The relationship of exchange is the economic parallel of the morality of duty.

Both the economic exchange and the moral duty arise out of the more general social phenomena of reciprocity.

Consider the case of the voter and his duty to vote. If it is in fact his duty to do so, then the negligent voter may be scolded by saying something along the lines of "how would you feel if everyone behaved the way that you did?" In this case, he who reprimands the voter uses the appeal of reciprocity to argue his point. The voter can be negligent for not voting or for not informing himself properly on the issues prior to voting, and indeed, the public often complains that significant portions of society are negligent voters – they don't vote or do not inform themselves properly beforehand. These arguments are based on the principle of reciprocity. Such arguments can also be based on an appeal to self-interest as some philosophers have attempted to argue, but not for all scenarios of duty.

Imagine a scenario where two men agree to give the same amount of money to a charity of their choosing. The appeal to self-interest does not hold but that of reciprocity does. If one man chooses not to live up to his bargain, then the other man is relieved of his obligation to give his sum to a charity. Calling this "self-interest" only works if the term is broadened to encompass almost all of Human Action, rendering it an empty shell of a term. Despite neither man explicitly bargaining that one is relieved of his duty if the other neglects his own, it was implied in the agreement.

Even the Golden Rule is a statement based on the principle of reciprocity.

Judge not, that ye be not judged. For with what judgement ye judge, ye shall be judged; and with what measure ye mete, it shall be measured to you again... Therefore all things whatsoever ye would that men should do to you, do ye even so to them 1 p.20

Fuller rephrased the Golden Rule from the language of morality or friendly commerce into the language of caution or hostile trade:

So soon as I have received from you assurance that you will treat me as you yourself would wish to be treated, then I shall be ready in turn to accord a like treatment to you. 1 p. 20

The Golden Rule is more than a statement about explicit bargains, but of a code of reciprocity that exists throughout society – not merely just that of explicit bargains. There is no bargain between the voter and the rest of society, yet the argument of reciprocity is used regardless. The man who does not vote cannot convince others to vote because he has not upheld his end of the bargain. This is captured quite well with another rephrasing of the Golden Rule:

So soon as it becomes perfectly clear that you have no intention whatever of treating me as you yourself would wish to be treated, then I shall consider myself as relieved from the obligation to treat you as I would wish to be treated. 1 p.21

The duty to vote is not absolute but depends on the expectations of others to do the same.

The vote that is not counted due to corruption is still a valid action in determining that corruption exists and needs to be uprooted. It is only in the most desperate of scenarios, that of utter oppression, that certain actions are pointless, but that is only because the principle of reciprocity has been eliminated entirely (which I believe the moral definition of oppression is: the lack of reciprocity between two groups, namely government and citizen).

The notion of reciprocity is implied in the very notion of duty - which I believe is simply an expectation that social beings have of each other if they intend to live among one another. In this way, Fuller does not mean that morality is that terrible word that people associate with the religious authoritarians, but simply a description of human nature. Fuller makes a point that duty is broader than the economics of exchange by listing a brief example of an emergency scenario such as a company of men making a last stand against an encircling enemy. No one cares in this scenario to measure the contributions of each man, but simply that each gives his personal best effort regardless of the measurable impact of each man's output.

The morality of duty is simply the Human Nature that ensures social living's own survival and prosperity. It is reciprocity between individuals. Since duty has been intrinsically linked to reciprocity, three rules are established that optimize and define what a duty is:

  1. A duty is created. It is the voluntary agreement between parties affected.
  2. It is equal (otherwise, it can't be reciprocal). That which is being reciprocated from each party must be (I personally add reasonably and subjectively) equal in value. Clearly, subjective valuation is critical here, since it is pointless to only consider an exchange of a book for another book when most reciprocal exchanges require entirely different services or goods (such as the exchange of money for any good/service). Fuller adds that the bond of reciprocity does not unite men in spite of their differences, but because of their differences. The idea of equal reciprocity requires a measurement of sorts between fundamentally different things.
  3. A duty must be reversible. The same duty that you owe me today, I may owe you tomorrow. Otherwise, why would a man attempt to act as if he is another man (empathize) when he is not the other man? The reversibleness of a duty is also a check that it is reciprocal. A laborer works for a timber framing company. He is selling his labor in exchange for money. The timber framing company is selling something (a money) in exchange for the labor's time. Consider the template where either party can be inserted into either role: A ___ is selling ___ to ___ in exchange for ___.

The conditions by which these criteria are met is a society of economic traders. By definition, members of this society meet the first criterion. As for equality, it is only something like a free market that valuation of disparate goods can exist.2 Individuals barter disparate goods with one another until an agreement is met, and this process is repeated across many sets of traders. Lastly, the third principle is met in a society of economic traders since the process of consumption and production is an individual process – people tend to do both, often in the span of a single day. Clearly, the "duties" that they find themselves bound to are reversible.

The startling conclusion is that only under free-market capitalism can the morality of duty reach its full development. The relationships of exchange in a free society are the result of Human Nature, namely the morality of duty or principle of reciprocity.

The principle of marginal utility is the economic parallel of the morality of aspiration.

The morality of aspiration is our efforts to make the most of our lives – the most of ourselves in limited time. The economics of utility is how people make the most of their limited means (resources). One is that which we should do and the other is that which we actually do. These are the goals of the two, but they are also alike in the way in which they are limited. The morality of aspiration necessarily begins with the highest good of man though it fails to tell us what this target is (we have to discover the "Good Life" individually). The principle of economic utility gives us a way in which to achieve our desired ends but fails to tell us what our ends should be (we have to discover our economic or financial goals). Economists cover their ignorance of this target with the overarching term, "utility;" but this word is vague to the extent that it is an encompassing shell for almost all Human Action.

The morality of aspiration has also had such terms come and go, like Bentham's "pleasure," but for it to explain the morality of aspiration it has to be broadened to the point that we arrive at the initial limited description of the morality of aspiration – that it is simply the strive for human excellence.

Both the morality of aspiration and marginal utility are defined by some greatness (one in prosperity and the other in health/ability). Both are limited in that they cannot tell us what that specific greatness is but can be studied so that we can arrive at our own individual targets.

If studied, both tell us how we achieve those goals. Neither of them holds anything to be sacred. In the economic principle of marginal utility, no means is more sacred than another means. We organize our resources in such a way to maximize their utility. The same observation holds for the morality of aspiration. No resource is sacred because the ultimate goal is to improve one's circumstances.

Locating the Pointer on the Moral or Economic Scale

If a reader is still not convinced that economics and morality perfectly reflect one another, then consider this quote again:

If the morality of duty reaches upward beyond its proper sphere the iron hand of imposed obligation may stifle experiment, inspiration, and spontaneity. If the morality of aspiration invades the province of duty, men may begin to weigh and qualify their obligations by standards of their own and we may end with the poet tossing his wife into the river in the belief – perhaps quite justified – that he will be able to write better poetry in her absence. 1p. 27-28

An identical relationship between the principle of marginal utility and the relationship of exchange exists.

Marginal utility is the way in which we best use our means – time, labor, land, Capital goods, etc. Nothing is sacred in this principle. We prioritize means in a flexible way, depending on the circumstances. "All existing arrangements are subject to being reordered in the interest of increased economic return." 1p. 28

The economics of exchange is in stark contrast. It is based on two rigid assumptions: property and contract. How else would we engage in exchange if we are not certain that we have property to exchange? How else would we engage in exchange if we are not certain that the other party has the right to give to us his property? Furthermore, we have to be able to freely decline or freely accept an exchange in order for us to pursue our interests – we have to be able to contract.

If marginal utility expands to include the economics of exchange, then property and contract become subjective and whimsical constructs. We could not own anything, so we could not exchange anything. We would not be free unless we were the ones that were in power because the freedom to contract would not be sacred.

If the economics of exchange expands to include marginal utility, then the sanctity of property and contract are not held in their proper place. As a result, efforts to direct resources to their most efficient use (marginal utility) is frustrated by interests of those claiming property or contract illegitimately.

The question of where to draw the line is an interesting one, but another question arises.

Is morality intrinsic, in which case it leads to some compatible economics?

Or is economic organization paramount, in which case it leads to some compatible morality?


Marxism and its forebears believe that moral and legal institutions are a superstructure – that they ultimately stem from economic institutions.

Societies with free(er) markets tend to have legal systems that reflect their economic systems. The economic organization of capitalist society is determined by reciprocal exchange where the economic subject is the economic trader engaging other economic traders in reciprocal exchanges.

The legal institutions of this society are also determined by reciprocal exchange. In criminal law we organize a list of crimes with specific punishments of each, or a "kind of price list for misbehavior."1p. 25 In private law we have the legal subject (the legal counterpart to the economic trader) who "owes duties, possesses rights, and is granted the legal power to settle his disputes with others by agreement."1p. 25

With communism, the economic trader and reciprocal exchange will cease to exist when all economic endeavor is controlled centrally, and legal rights and duties will wither away as a result. The fatal flaw of Marxism is that it assumes the incorrect causal relationship – it assumes that economic organization results in a compatible morality. The truth appears to be the opposite, that Human Nature (morality) results in a specific economic organization that compliments it. This distinction is why communism fails. Communism results in more conflict between the citizen and the state because, even though the citizen's need to engage in reciprocal economic exchange is stifled under communism, he still clings to his desire for legal rights. The logical conclusion of Marxist thought (if we assume that economic organization results in compatible morality and law rather than the reverse) is that all moral and legal duties will cease to exist because it is only through the relationships of exchange (economics) that we are able to make others serve our ends by serving theirs (duties/reciprocity).

If Marxist thought were true, then the seizure of the economy would simply result in a different moral organization (or as many argue, no moral organization) that will complement the seizure of the economy; yet over and over, communism results in conflict and not prosperity. The morality of aspiration, the morality of duty, and the balance between the two appear to be incompatible with Marxist thought and appear to be resilient to drastic economic reorganization. In simple terms, Marxist theory is inhuman. It is incompatible with human nature – the morality of duty and the morality of aspiration.

The Bizarre Villainy of Leftism

To reject the morality of duty is to reject the nature of social living. Since economic organization stems from Human Nature, then the rejection of the economics of exchange is to reject this nature.

To reject the morality of aspiration is to reject a being's desire to improve his circumstances. Since economic organization stems from this desire, then to reject the principle of marginal utility is to reject this desire.

The two form a complete framework to study human morality.

The two moralities, one beginning at the top and the other at the bottom, are inversely related. The debate is not whether or not they exist: of course they do. It would be absurd to claim that they do not. The debate of morality is where the line is drawn between the two. When the line is drawn too high (morality of duty encroaches on the territory of morality of aspiration) or too low (vice versa), bizarre scenarios emerge. We tend to call these bizarre scenarios, "villains".

Those That Punish

  • Frau Diller (Book Thief, The)
  • Professor Umbridge (Harry Potter)
  • President Snow (Hunger Games, The)
  • Every Damn Main Character on the '90s sitcom, Friends
  • Nazi Germany
  • Fascist Italy
  • Maoist China

The villains that punish are the people that attempt to draw the line of morality higher. They want to impose the iron hand of obligation in areas that it should not exist. These villains emphasize order over chaos. The consequence of drawing the line of morality higher is a lack of freedom.

In the 90's sitcom, Friends, every main character is confronted with a situation where that which they desire (some person of the opposite sex) rejects or neglects them in some way. They choose to retaliate. They do this because they feel entitled to the affection and acknowledgement of that which they desire. They feel as those the other has a duty to reciprocate. Rarely do these characters take the correct approach by looking inward and asking: Am I worthy of this person? As I am in this moment, would it actually be in that person's interests to be with me? Such questions stem from the morality of aspiration because they form as the starting point for improving oneself. They also place one in the shoes of the other party, asking the basic question of whether or not that person would be achieving the morality of aspiration by choosing the person being rejected.

By choosing entitlement to things that do not rightfully belong to you, you reject the morality of aspiration. Recall that a failure to achieve the morality of duty is a thing to be punished. This is why the villains that draw the line high (reject the morality of aspiration) are "Those That Punish".

The modern leftist rejects the morality of aspiration. He wants the iron hand of forced obligation imposed on almost every aspect of daily living via de facto equality (equality of outcome). As such, he advocates and works closely with the government to impose order. The question he poses to individuals is not "how can you improve yourself?". He asks instead, "how can power be wielded to force others to help you?".

Those That Take

  • Franz Deutscher (Book Thief, The)
  • Viktor Chemmel (Book Thief, The)
  • The Joker (The Batman Franchise)
  • Calvin Candie (Django Unchained)
  • Emperor Commodus (Gladiator)
  • Officer Hans Landa / "The Jew Hunter" (Inglourious Basterds)
  • Assef (Kite Runner, The)
  • Prince Regal Farseer (Realm of the Elderlings)
  • Prince/King Joffrey "Baratheon" (Song of Ice and Fire, A)
  • Johnny Ringo (Tombstone)

The villains that take are people that draw the line of morality so low that the morality of duty (and economically, the relationships of free exchange) are discarded. The basic objects that are sacred – the principle of private property and ownership of oneself and the dignity of others to reject you – are treated flippantly. As such, honesty, which is a valuable tool of reciprocity, is discarded. Basic loyalty, an inherently reciprocal notion, is discarded.

Nothing is sacred because to achieve one's ends is to reorganize everything in such a way as to maximize personal profit.

Paradoxically, the modern leftist fits into this category of villain as well. The leftist seeks to abolish free exchange, which is the equivalent of abolishing the morality of duty.

A Paradox Within a Paradox

The morality of duty is inversely related with the morality of aspiration – the further we draw the line from the bottom (duty), the less space we have at the top (aspiration) and vice versa. A complete rejection of either (which is what a villain tends to be) is a paradox in itself because it is a rejection of something that is obviously true – the nature of social living (the morality of duty) or the logical consequence of being self-aware (the morality of aspiration).

Most villains tend to be one or the other, so despite the inherent paradox of rejecting one aspect of nature, a villain can still be logically consistent.

The leftist, on the other hand, is bizarre. As we have seen, he rejects both sides of human nature, while also appealing to both. He appeals to the morality of aspiration when he urges people to educate themselves, but he rejects the morality of aspiration when he forces obligations in place of personal freedom. He appeals to the morality of duty when he forces those obligations, but he rejects the morality of duty when advocating for communist and socialist systems.

The leftist is Professor Umbridge and Prince Joffrey.

Author's Note

Read Fuller. Read Rothbard. That is all.

Also, I departed from Fuller but relied heavily on his wisdom. Any legitimate criticisms of this essay do not necessarily reflect on Fuller.

[1] Lon L. Fuller. "The Morality of Law." Revised Ed. Yale Law School. 1969.

[2] Murray N. Rothbard. "Man, Economy, and State with Power and Market". Scholar's Edition, 2nd Edition. Ludwig Von Mises Institute. 2009.