Lysander Spooner - Views On Economics and Self-employment

Views On Economics and Self-employment

Spooner believed that it is beneficial if people are self-employed so that they could enjoy the full fruits of their labor rather than having to share them with an employer. He argued that various forms of government intervention in the free market made it difficult for people to start their own businesses. For one, he believed that laws against high interest rates, or "usury" prevented those with capital from extending credit because they could not be compensated for high risks of not being repaid: "If a man have not capital of his own, upon which to bestow his labor, it is necessary that he be allowed to obtain it on credit. And in order that he may be able to obtain it on credit, it is necessary that he be allowed to contract for such a rate of interest as will induce a man, having surplus capital, to loan it to him; for the capitalist cannot, consistently with natural law, be compelled to loan his capital against his will. All legislative restraints upon the rate of interest, are, therefore, nothing less than arbitrary and tyrannical restraints upon a man’s natural capacity amid natural right to hire capital, upon which to bestow his labor....The effect of usury laws, then, is to give a monopoly of the right of borrowing money, to those few, who can offer the most approved security."

Spooner also believed that government restrictions on issuance of private money made it inordinately difficult for individuals to obtain the capital on credit to start their own businesses, thereby putting them in a situation where "a very large portion of them, to save themselves from starvation, have no alternative but to sell their labor to others" and those who do employ others are only able to afford to pay "far below what the laborers could produce, if they themselves had the necessary capital to work with." Spooner said that there was "a prohibitory tax --- a tax of ten per cent. --- on all notes issued for circulation as money, other than the notes of the United States and the national banks" which he argued caused an artificial shortage of credit, and that eliminating this tax would result in making plenty of money available for lending such that: "All the great establishments, of every kind, now in the hands of a few proprietors, but employing a great number of wage labourers, would be broken up; for few or no persons, who could hire capital and do business for themselves would consent to labour for wages for another."