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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Tuesday, May 31, 2005

Claire Wolfe on Economic Fascism

Several weeks ago I linked to a Sean Gabb piece on the economic fascism that hides behind the vulgar libertarian agenda of faux "privatization" and "deregulation." Of the Adam Smith Institute--which "sells market solutions to statist problems"--he wrote, in part:

The old statism was at least mitigated by incompetence. The people in charge of it were paid too little to feel really important; and much of their energy was absorbed in disputes with stupid or malevolent union leaders. They presided over a system that was never very strong, and that failed to weather the storms of the 1970s.

As reconstructed in the 1980s - partly by the Adam Smith Institute - the new statism is different. It looks like private enterprise. It makes a profit. Those in charge of it are paid vast salaries, and smugly believe they are worth every penny....

But for all its external appearance, the reality is statism. And because it makes a profit, it is more stable than the old. It is also more pervasive. Look at these privatised companies, with their boards full of retired politicians, their cosy relationships with the regulators, their quick and easy ways to get whatever privileges they want....

As with National Socialism in Germany, the new statism is leading to the abolition of the distinction between public and private....

There has been no diminution in the economic power of the State, only a change in its mode of operation....

Some time earlier, I had linked (in this post) to an amazing article by Nicholas Hildyard of Corner House. In it he argued that the neoliberal agenda of "free market" reform carried out under the auspices of NAFTA, GATT, CAFTA, etc., really meant just reducing the amount of activity nominally carried out in the "public" sector, while greatly augmenting the state capitalist framework within which the so-called "private" sector functioned. While more social activity might be "private" than ever before, and profits might be soaring for the commanding heights of the corporate economy, those privileged corporations operated within a set of rules stacked in their favor.

Now Claire Wolfe has more:

And yet ... all those "free-market" ideas are being used and twisted by the same politicians and bureaucrats who would once have marshalled behind the banner of some -ism. Now we have "free-markets" in the form of statist monstrosities like NAFTA and the WTO. And who would have thought, all those years ago when Reason magazine was extolling the virtues of "privatization," that privatization would mean such cruel insanities as private prison companies lobbying the federal government to give them more, more, more, more? Or private contractors delegated by the IRS to go out and collect taxes? Or "private" corporations, founded and funded by government, running government programs like AmeriCorps?...

Somehow, I won't feel one bit better about national ID if Oracle is given a "private" contract to develop its databases. Or if the Department of Homeland Security is someday turned into the "Corporation for Homeland Security" with a board of directors drawn from Microsoft, Boeing, Amtrak, and the CIA.

Monday, May 30, 2005

Book Tag

Well, I've been book-tagged by Ken MacLeod. I don't know what kind of misfortune will result from breaking the chain, so here goes:

1. Total number of books I own: a thousand or so (a rough guess, since so many of them are still in boxes from previous moves).

2. The last book I bought: Frances Moore Lappe's World Hunger: Twelve Myths and Bob Rodale's Composting (I don't remember which one actually hit the counter first).

3. The last book I read: Currently reading the new 2004 edition of Walter Adams' and James Brock's The Bigness Complex.

4. Five books that mean a lot to me:
Kirkpatrick Sale. Human Scale.
Benjamin Tucker. Instead of a Book.
David DeLeon. The American as Anarchist.
Harry C. Boyte. The Backyard Revolution: Understanding the New Citizen Movement.
Henry J. Silverman, ed. American Radical Thought: The Libertarian Tradition.

5. Tag five people and have them do this on their blogs:

Larry Gambone
Logan Ferree
Brad Spangler
Dave Pollard
Jesse Walker

Of course there are a lot more people I'd like to pass this along to (especially for their answers to #4)--but I am nothing, if not a stickler for obeying the rules.

Carnival of the Un-Capitalists

Back again! This week's host is Fruits of Our Labour.

Friday, May 27, 2005

Jane Jacobs Letter to Bloomberg

Via Progressive Review. Jane Jacobs takes on NYC's local Cockroach Caucus:

Let’s think first about revitalization successes; they are great and good teachers. They don’t result from gigantic plans and show-off projects, in New York or in other cities either. They build up gradually and authentically from diverse human communities; successful city revitalization builds itself on these community foundations, as the community-devised plan 197a does.

What the intelligently worked out plan devised by the community itself does not do is worth noticing. It does not destroy hundreds of manufacturing jobs, desperately needed by New York citizens and by the city’s stagnating and stunted manufacturing economy. The community’s plan does not cheat the future by neglecting to provide provisions for schools, daycare, recreational outdoor sports, and pleasant facilities for those things. The community’s plan does not promote new housing at the expense of both existing housing and imaginative and economical new shelter that residents can afford. The community’s plan does not violate the existing scale of the community, nor does it insult the visual and economic advantages of neighborhoods that are precisely of the kind that demonstrably attract artists and other live-work craftsmen, initiating spontaneous and self-organizing renewal....

[T]he proposal put before you by city staff is an ambush containing all those destructive consequences, packaged very sneakily with visually tiresome, unimaginative and imitative luxury project towers.... If you follow the proposal before you today, you will maybe enrich a few heedless and ignorant developers, but at the cost of an ugly and intractable mistake. Even the presumed beneficiaries of this misuse of governmental powers, the developers and financiers of luxury towers, may not benefit; misused environments are not good long-term economic bets.

Thursday, May 26, 2005

Once Bitten: Newsweek Abandons Journalism for Stenography

Sam Smith's commentary at Progressive Review:

RELIABLE SOURCES inform us that Newsweek will no longer be using reliable sources. Instead it will be relying on such unreliable sources as professional message manipulators, bureaucrats with their asses in hock, political appointees on their way up, legislators funded by corporate payola and such demonstrable masters of prevarication as our current president

Newsweek reporters will still be allowed to talk to reliable sources, they just won't be able to quote or cite them unless the editor approves, which considerably diminishes their utility.

This is not a journalistic decision. It is a corporate, bureaucratic, and legalistic response to the deliberate abuse of a story by professional message manipulators, bureaucrats with their asses in hock, political appointees on their way up, legislators funded by corporate payola and such demonstrable masters of prevarication as our current president....

If the sniveling, timorous corporate hacks running places such as Newseeek these days had been around in an earlier time, there would have been no Pentagon Papers, no Watergate, no countless other stories that essentially pitted the honesty of journalists and government whistleblowers against the manifold mendacities of agents of the state.

The justified conceit of a free press is that, on average, Michael Isikoff is going to tell you the truth more often than a Pentagon or White House press secretary. Finding this truth requires far more than documents and statements or the faithful stenography of faithless officials. It requires finding people who, rightfully in fear of their jobs, are at least willing to share a bit of the truth with a reporter whose confidence they trust. It requires judgment, perception, and inductive reasoning on the part of the scribe and it requires considerable courage on the part of the whistleblower. Once you believe the journalist no more trustworthy than an official source you no longer need a free press.

What Newsweek has done is to resign from the free press. Its defection should be regarded with far more contempt than any occasional misinformed story or deceitful writer. Such problems come and go, but a massive capitulation to the government and officials sources will change the nature of journalism forever and, with it, the public's ability to find the truth.

This is nothing new. It's a virtual replay of the backlash against investigative journalism after the so-called "Memogate." There is a mountain of evidence against Bush at the AWOL Project, much of it far more damning than the anemic claims in the forged memo that burned Dan Rather. But the ensuing fiasco put an end to CBS News' feeble and belated venture in actually investigating the facts of Bush's National Guard record, instead of merely regurgitating the official pronouncements of "both sides." After that, the corporate media was innoculated against any further attempts at investigative reporting.

But mainstream journalism has had a bias against independently digging into the facts ever since it fell under the spell of Walter Lippmann's cult of "professional objectivity." Justin Lewis has done a better job than anybody else, I think, in describing just what's wrong with that ethos:

The norms of "objective reporting" thus involve presenting "both sides" of an issue with very little in the way of independent forms of verification... [A] journalist who systematically attempts to verify facts--to say which set of facts is more accurate--runs the risk of being accused of abandoning their objectivity by favoring one side over another....

....[J]ournalists who try to be faithful to an objective model of reporting are simultaneously distancing themselves from the notion of independently verifiable truth....

The "two sides" model of journalistic objectivity makes news reporting a great deal easier since it requires no recourse to a factual realm. There are no facts to check, no archives of unspoken information to sort through.... If Tweedledum fails to challenge a point made by Tweedledee, the point remains unchallenged.

[Justin Lewis "Objectivity and the Limits of Press Freedom" Project Censored Yearbook 2000, pp. 173-74]

As Sam Smith observed, this spurious cult of pseudo-objectivity is reflected in a bias against the written word. Recourse to written sources requires independent digging by the journalist himself, instead of simply presenting a pair of quotes from the public statements of the two respective "sides."

...I find myself increasingly covering Washington's most ignored beat: the written word. The culture of deceit is primarily an oral one. The soundbite, the spin, and the political product placement depend on no one spending too much time on the matter under consideration.

Over and over again, however, I find that the real story still lies barely hidden and may be reached by nothing more complicated than turning the page, checking the small type in the appendix, charging into the typographical jungle beyond the executive summary, doing a Web search, and, for the bravest, actually looking at the figures on the charts.

[Sam Smith. Project Censored Yearbook 2000, p. 60]

This is not hyperbole. Journalists who do independent digging, instead of limiting themselves to press conference stenography, often provoke howls of outrage about "bias" from the rich and powerful. One recent example is the case of Tom Ricks, a Washington Post Pentagon reporter.

In his more than two decades covering the military, Ricks has developed many sources, from brass to grunts. This, according to the current Pentagon, is a problem.

The Pentagon’s letter of complaint to Post executive editor Leonard Downie had language charging that Ricks casts his net as widely as possible and e-mails many people.

Details of the complaints were hard to come by. One Pentagon official said in private that Ricks did not give enough credence to official, on-the-record comments that ran counter to the angle of his stories.

Here's how the "he said, she said" standard of "objective reporting" was lampooned on the Daily Show:

CORDDRY: I'm sorry, my *opinion*? No, I don't have 'o-pin-i-ons'. I'm a reporter, Jon, and my job is to spend half the time repeating what one side says, and half the time repeating the other. Little thing called 'objectivity' -- might wanna look it up some day.

STEWART: Doesn't objectivity mean objectively weighing the evidence, and calling out what's credible and what isn't?

CORDDRY: Whoa-ho! Well, well, well -- sounds like someone wants the media to act as a filter! [high-pitched, effeminate] 'Ooh, this allegation is spurious! Upon investigation this claim lacks any basis in reality! Mmm, mmm, mmm.' Listen buddy: not my job to stand between the people talking to me and the people listening to me.

Of course, this stenographic model of journalism sort of makes you wonder what the point of having newspapers in the first place. As Avedon Carol commented a while back,

Hm, let's see... I can go to whitehouse.gov and read everything administration officials have to say on the record, or I can spend money to buy a newspaper and read a repetition of selected quotes from that said material. What should I do?

If that's all newspapers are good for, what are newspapers good for?

So what's the alternative? Personally, I prefer the party press of the nineteenth century, in which truth was promoted, not by any phony idea of "objectivity," but by the adversarial process. It's the same process used when attorneys cross-examine each other's witnesses. A newspaper should openly avow its ideological orientation, make the best possible case it can for its interpretation of the facts, and go over its adversaries' factual claims with a fine-tooth comb. Truth comes not from pretended "objectivity," but from vigorously competing truth-claims in the marketplace of ideas. This older and better model of journalism can be found mainly in the alternative press of far left and right, and in the blogs. The best news digest blogs, which draw from a wide variety of public documents and newspapers to present a case, hold the promise of a return to real journalism.

Wednesday, May 25, 2005

Destroying the Capacity for Independent Thought

An excellent diatribe against daycare by Karen De Coster at LewRockwell.Com:

As a child, I placed a great premium on quiet-time and time spent alone indulging in my solo interests. Whether the order of the day was creating some new artwork or reading my books, or writing a story or listening to my records, it was something I found necessary for my peace of mind, and for the growth of my intellectual capabilities. After school, I remember running home as fast as I could and bursting into the house, heading straight for my room and all my little tasks that lay before me. It was as much fun planning those activities as it was doing them. I felt a sense of security and comfort, since I knew Mom was there, and therefore, everything was going to be all right. I ran home because I knew it was a place that I wanted to be. Now, kids don't run home to Mom anymore, because they have the latchkey stopover that comes between school and home. The security of Mom may come hours after school is over. During the summer months, for me, it was a whole day of various things to do; things I wanted to do. I never could have survived a moment as a daycare kid.

Can one who grew up like I did even imagine living the chaos of the daycare center life? Gaggles of kids, some screaming and some crying, some fighting and some sick, all letting loose in an atmosphere void of parents, control, or set discipline. Even if there exists a sense of discipline, where can a child get any peace, for instance, to read or write or study, or to develop artistic or musical talents?

There is no peace, for a daycare kid is trapped in a ritual of group games, group projects, and group trips. The activities are planned, as are lunchtime and naptime. Solo time, however, is not planned because it does not exist. A child is forced into this groupthink whether he likes it or not. He has no access to his own "things", his own comforts that he chooses, or his own hobbies. He's there to be babysat and to go along with the rest of the group on its little projects, no matter how uninteresting he may find them. And he is expected to do that for eight, ten, twelve hours a day, every day.

This phenomenon is reinforced by several others. One is the enormous increase in educational work-load, with American publik skools adopting the Japanese approach to scheduling every waking hour with relentless homework and drilling, inculating an attitude of calculating careerism, and churning out obedient drones who'll do whatever they're told--without question--by whatever organization employs them. So let's answer Karen's question with another one--when does the upwardly-mobile, professional-track little resume-builder ever find time for quiet reflection and the pursuit of independent interests, when every evening he comes home with enough homework to last till bedtime? I think it's safe to say that most of today's overachievers don't even know what an independent interest is. After twelve or sixteen (or more) years of seeing every activity and every thing learned as another line on the resume, another gold star granted by an authority figure, of responding to every bit of information with "is this going to be on the test"--how would they even know what they really want to do, for it's own sake?

Finally, if these things aren't enough to destroy the capacity for independent thought, we've got our real-life version of the "handicaps" Kurt Vonnegut envisioned in "Harrison Bergeron." In his egalitarian dystopia, everyone of above-average ability was required to wear a handicap device of some sort. For instance, a person of above-average intelligence would wear a headset that, at random intervals, zapped the wearer or deafened him with a loud noise, so that he was unable to follow any coherent line of thought for five minutes at a time. In the real world, we don't need a handicapper-general; instead, people are lining up to buy their handicaps from Cingular or T-Mobile. Until the dawning of the Age of the Perpetually Wired-in Conversation, around a decade ago, it was while doing menial chores or walking from one place to another that thinking people often got their best thinking done. Now, every other person I see going down the sidewalk is carrying on a conversation. Can anyone born before 1985 even remember what it was like to be alone with your thoughts, without the constant possibility of being jerked by an electronic leash?

Monday, May 23, 2005

Carnival of the Un-Capitalists

It's that time again! Agitprop is hosting this week's eighth installment of Carnival of the Un-capitalists.

Friday, May 20, 2005

George and Tucker

Via Bill Grennon. An amazing article by Geolibertarian Mark Sullivan: "Why the Georgist movement has not succeeded." Sullivan, President of the Council of Georgist Organizations, has venerable Geoist credentials; he traces his doctrine (in the Georgist version of apostolic succession) back to Ralph Borsodi (via Mildred Loomis) and thence to the Old Man himself.

Of course, the question of Georgism's "success" can be met with the counter-question "compared to what?" As Sullivan points out, the "success" of Marxism in the state socialist countries has been decried as a corruption by many Marxist ideologues. And he makes quick work of the too-frequent claims of free market libertarianism's increased influence in the '80s.

The so-called triumph of libertarianism in the 1980s and 1990s was, of course, no such thing. Swollen military budgets, the vicious war on drugs, the propping up of dictatorships and oil monopolists--these dominant features of the late 20th century had little to do with real libertarianism (which has always been antiwar, not just pro-market). But in order to finance such government excess, real public services and the social safety net were deviously attacked (by Reaganites and Thatcherites) using sound bites of libertarian rhetoric. The resultant and current New World Disorder or "globalization" can hardly be called a ringing victory for any coherent academic paradigm or political movement. Rather, it is an ugly grafting of libertarian theories of privatization onto the realities of imperial militarism. Our brave new world is perhaps a victory and a success for oil monopolists, global polluters, phony free traders, and other multinational financial interests--but it is an ever-worsening defeat and failure for billions of ordinary people around the world, as well as for other species, ecosystems, and Mother Earth as a whole.

Nevertleless, the question is a natural one to ask, given Georgism's wild popularity in the late 19th and early 20th centuries.

Sullivan takes a long detour from his central question, devoting most of the middle part of his article to an attempted fusion between Henry George and Benjamin Tucker. Both George and Tucker, he writes, aimed at a fusion of radical economic analysis with free market principles, advocating a laissez-faire road to socialism.

George's contemporary and anarchist rival, Benjamin R. Tucker (1854-1939) of Boston and New York, editor of the journal Liberty from 1881 to 1908, had a somewhat similar vision of the free and fair society--the abolition of all monopolies and of the state as an oppressive power. Tucker was a self-proclaimed disciple of Pierre-Joseph Proudhon, the great French anarchist and socialist rival of Karl Marx. Following up Proudhon's declaration "Property is theft," Tucker declared that "there are at bottom but two classes,--the Socialists and the Thieves. Socialism, practically, is war upon usury in all its forms, the great Anti-Theft Movement of the nineteenth century" (Liberty May 17, 1884; Instead of a Book 1893:362). Tucker took Proudhon's mutualist anarchism, including his Bank of the People, into a characteristically American direction, synthesizing European socialism with frontier-style individual sovereignty. Similarly, George prefaced Progress and Poverty with his own mission of synthesis: "... to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the schools of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism." (p. xxx). In this, Tucker and George, the Anarchist and the Single Taxer, were in agreement--their respective positions can be seen as variations of libertarian socialism or, to borrow a label from Peter Valentyne and Hillel Steiner, Left-Libertarianism.

But despite their similarities, Tucker devoted a disproportionate amount of his energy to combating George. That was unfortunate, because the two complemented each other in some important ways. For example, although Tucker and George both objected to the economic power of absentee landlords, George had a blind spot when it came to money and interest. In Progress and Poverty, he argued a "natural productivity" theory of interest that was almost totally nonsensical. Sullivan considers the thought of Tucker and Greene on the money monopoly to be an important complement to George's theory of land rent. The two could be fused, he speculates, in a unified theory of artificial scarcity in both land and credit as the result of state-enforced monopolies.

As I see it, while taking a more radical political path, Tucker's attention to the problem of exploitation of labor by "usury," especially interest on capital, as well as his critique of the state itself, complements George's analysis of economic rent and land monopoly. It was Mildred Loomis who brought this to my attention, and introduced me to Tucker's last direct "disciple," Laurance Labadie, before he died in 1975. Let me suggest, as Loomis did, such a synthesis of Tucker and George.

Real wealth deteriorates and (with the exception of "collectibles") depreciates over time. In the face of this fact, and in the absence of state-supported monopoly claims (to landed property, information and laws of nature, absentee corporate ownership, and the creation of money) that otherwise would offset it, there would be economic pressure to loan wealth at low or no interest. If the value of real wealth and services could be monetized by the labor that creates them, via socially responsible "Mutual Banks," and if land belonged to the community, with land tenure based on the payment of the economic rent (George) or conditional upon personal occupancy-and-use (Proudhon and Tucker), then the accumulation of vast amounts of surplus wealth would be discouraged by its own maintenance costs and therefore sold off or loaned at cost (not interest)--capital would be redistributed back to labor, in effect, via free and fair market transactions. In the absence of monopoly privileges, the role of time in the production of wealth is offset, balanced, or canceled out by the role of time in the deterioration of wealth, which eventually returns all wealth back to the land. Like rent, interest is the offspring of state-supported monopoly privilege, not of liberty or community.

I would add that Tucker came closer to such a unified theory of exploitation than did George: although Tucker had an anti-landlord theory of his own, in his occupancy-and-use theory of land, George almost completely neglected the role of the state in enforcing the money monopoly. In fairness, though, both Tucker and George took a negative view of patents and tariffs.

Although Tucker objected to George's single tax as a statist measure, and George himself was no anarchist, George at least laid a foundation that could be built on by self-proclaimed "anarcho-Georgists." As Sullivan indicates, George in many ways anticipated Nock's distinction between the state and the government.

George wanted to use democratic means to simplify and purify government of all oppressive features, making it "merely the agency by which the common property was administered for the common benefit'....

George's land theory is by no means incompatible with free market anarchism. Although George used the term "tax" what Georgists call "land value taxation" can be consistently viewed, instead, as community collection of rent in a stateless society.

Sullivan also tries to make Georgism more amenable to its Tuckerite rivals, as well as various traditional forms of land tenure. George was wrong, he says, to consider the Lockean pattern of absentee land titles as "normal," and to be accepted as a matter of course so long as community land rent was paid. Georgism, rather, should incorporate other ways of establishing ownership in the first place--like occupancy and use.

Georgists, in my opinion, need to see beyond George's 19th-century categories and terminology. We need to see that economic systems do not exist outside of larger sociopolitical systems. Can we really say that rent is "natural"? There are societies in which the practice of sharing access to land was the custom, and rent did not exist. Rent is a relationship, not an essence or a thing. Rent relationships arise when societies create and observe certain customs and laws regarding exclusive land tenure.

In answer to the title question, Sullivan attributes Georgism's anemic accomplishments in the twentieth century to the catastrophic effect of WWI.

World War I stopped the land-value tax legislation that had been put before the British parliament. The war enabled Lenin to take possession of the new Russian republic, derailing Karensky's intentions to institute single-tax-style reform as once championed by Leo Tolstoy, and leading ultimately to the rise of Stalin. The political reaction to the triumph of Marxist-Leninism derailed Sun Yat-Sen, who had been in favor of Single Tax and other democratic reforms in China. It unleashed a new Red Scare in the United States, in which the government persecuted and deported many radicals while it intimidated the ranks of moderate socialists and reformers that included many Single Taxers. And it led to the rise of fascism on the one hand, and totalitarian communism on the other, in Asia as well as Europe, setting the stage for World War II.

The War Hysteria and Red Scare, especially, by marginalizing economic radicalism as "un-American," sounded the death knell of the native American radical tradition in the heartland. Such petty bourgeois radicalism was either eclipsed by the imported collectivism of Lenin and Trotsky, or coopted by the state capitalism of the New Deal.

Since WWII, Geolibertarianism has moved in a more radical direction, and been enriched by such innovations as the citizen's dividend, "Green taxes" on pollution and other externalities, and regulation of the radio spectrum and other "social commons" in a manner analogous to land.

The revamped version of Geolibertarianism Sullivan advocates, based on a "unified field theory" of exploitation, might (he argues) become the basis for anti-globalist resistance:

The ultimate implications of globalization-which is nothing but the final privatization of the planetary commons-is that we can no longer afford to treat land (including the water supply, the gene pool, the electromagnetic spectrum) as a commodity. The land belongs equally to all, even if not especially to those without financial power who cannot afford to pay a rent or a tax for it. The socialization of land values must be complemented by the socialization of the land itself. Indeed, "We must make land common property." Some land must be held off the market for ecological reasons. Other species must be protected in their occupancy and use of their habitats. Ultimately, we must see the planet as Mother Earth once more. We must return to humanity's ancient wisdom before it was overshadowed by those patriarchal institutions: the military state, land privatization, and debt servitude. Our Mother is not for sale, nor is she for hire. Inspite of our abuse she gives of herself unstintingly. In the future--if we have a future--the payment of land rent for the private use of the Earth would be seen as an indemnification paid to the community in recognition of the damage and violation done to the Mother of all.

For example, the Putin government in Russia has at least toyed with Georgist principles, such as partly undoing the kleptocratic looting (aka "privatization") of natural resources via special rents or royalties.

But any Third World government that makes serious attempts at implementing such radical principles, Sullivan speculates, is likely to become a pariah state.

The current war of terrorism is to make the world safe for oil monopolists--some of whom occupy high political office and even royal estate--as well as finance monopolists, represented by the WTO, World Bank, and IMF. Indeed, it is a Georgist issue that could well be addressed as such by Georgists. But it may take some courage. Should any country resist its global corporate interests and listen to Georgists enough to implement a Georgist system, it would be threatened with ostracism by the global finance and corporate interests, as occurred in Russia. If that were to fail, perhaps the U.S. government would label the country a rogue state that harbors terrorists and then drop bombs, send in death squads, and/or declare economic sanctions that slowly murder the population until such time as it could install a puppet regime.

Thursday, May 19, 2005

On "People Power," Real and Imagined

In recent months, we've seen a lot of official and quasi-official (i.e. press) gushing about "people power" in Georgia, Lebanon, Ukraine, etc. But Jesse Walker has an interesting article at Reason on some examples of "People Power" that the neocons and the mainstream press aren't so enthusiastic about. Latin America has been the scene of "unarmed insurrections" quite similar to their better-known counterparts in the Old World--but the official reaction has been quite different:

Latin America's outbreak of people power hasn't received as much stateside attention as its counterparts in Central Asia and the Middle East. This is presumably for the same reason media accounts of nonviolent Arab movements often ignore Palestinian resistance to Israel's "security barrier": The uprisings aren't aligned with U.S. interests. Official Washington has not been celebrating South America's turn to the left—three-quarters of the continent's people now live under left-wing governments—and popular protest is generally regarded as a part of that shift. So it gets left out of the narrative of democratic transformation, and when it does surface, it's treated rather differently than its Asian equivalents. Instead of Business Week's Jason Bush describing the Ukrainian and Georgian protestors as "democratic political movements," we have Business Week's Geri Smith complaining that "citizens are taking to the streets, rather than the ballot box, to register their political grievances." (Actually, they've been taking to both.) She also quotes Moisés Naim of Foreign Policy, who calls the ferment "the politics of race, revenge, and resentment." The solution, Smith concludes, is for the World Bank and the Inter-American Development Bank to subsidize "solid government institutions."

Smith and Naim aren't alone. When The Christian Science Monitor's Danna Harman filed a solid report on the Latin American upheaval, published April 29, the voice of caution was Vinay Jawahar of the establishment group Inter-American Dialogue, who told Harman that it was "hard to argue that this sort of instability is good for a country."

(But the instability in Georgia, Lebanon, Ukraine, etc., was? For sheer comic effect, this matches George Shultz's performance in a committee hearing back in the '80s, when he (the chief diplomat of a country founded by violent revolution) chided a pro-ANC congressman for "advocating the use of violence." He was either a filthy, disingenuous liar, or stupid--and I don't think he was that stupid. If his ignorance was genuine, though, Karl von Clausewitz could have told him that Reagan, Clinton, and Bush used violence for political purposes every time the U.S. armed forces rained death on some hapless Third World country. It's like these clowns just assume their audience is so intellectually crippled by publik skool education as to be incapable of critical thought. It's almost as if the emperor is publicly revelling in his own nakedness, the better to identify and target anyone capable of seeing it. Orwell's Insoc Party, in similar fashion, issued the most insanely unbelievable claims possible, as a way of testing the faithful.)

According to Jesse, there has been a fundamental shift since the '70s from guerrilla warfare and military coups as the primary means for overthrowing governments, to "nonviolent people power."

They fall into three general categories: methods of protest and public persuasion (e.g., a march), of organized noncooperation (e.g., a tax strike), and of "nonviolent intervention" (e.g., a land occupation). Contrary to the conventional wisdom, such methods have frequently worked under repressive dictatorships as well as under relatively benign systems; many times they've succeeded where guerilla tactics have failed. In 23 of those 31 rebellions, from Bolivia to Bulgaria and from Mongolia to Mali, the uprising contributed directly to regime change.

Perhaps more important, though, are the examples of successful "people power" that didn't lead to regime change--those that treated the central government either as irrelevant, or largely a hindrance, regardless of its political ideology.

More substantial changes can occur without the government formally changing hands. Of the recent turbulence in Latin America, the most interesting event may be the revolt of the Bolivian Indians. They were the backbone of the protests that drove President Sanchez de Lozada out of power in 2003, and of the more recent turmoil as well, but that's not what I'm referring to here. I'm referring to the fact that about a fifth of the country's population now lives in villages that run their own affairs, outside of the capital's control. This power was not ceded to them. They simply took it.

That's a rural phenomenon, but it has urban echoes: The state has had a hard time governing El Alto, the overwhelmingly Indian city at the heart of the 2003 rebellion. Similar semi-autonomous zones exist in other South American countries. The Nasa Indians of Colombia, for example, gradually took back their traditional lands from the 1960s to the 1990s, and do what they can today to fend off incursions by government officials, right-wing paramilitaries, and Marxist guerillas.

Then there's a social movement that's rarely regarded as a movement at all: the squatters who occupy unused, usually government-owned land in and around most major third world cities. There they've built vast, self-governing neighborhoods that, despite some serious social problems, are usually more pleasant places to live than the legally sanctioned slums. Some, indeed, have evolved into middle-class neighborhoods.

Hmmm. That's not exactly the kind of "people power" I'd expect the Soros Foundation or the National Endowment for Democracy to get all excited about--at least not in a good way.

The relative weight given to regime change and to the building of social counter-institutions, respectively, might have something to do with the levels of official sympathy in Washington.

I've tended to dismiss --perhaps mistakenly--most of the officially favored examples of "people power" as counterfeit revolutions. Jesse argued recently that some of them (especially the Ukrainian "Orange Revolution") have had genuinely populist credentials. Much of the grass-roots action to bring down Yanukovich was just as authentic as the left-wing movements in Latin America.

Nevertheless, the outcome in most of the officially approved "revolutions," once the smoke cleared, was what the Bushies and their fellow travelers call "rule of law": a professionalized government of neoliberal elites, largely insulated from any form of genuine popular control, that do the bidding of the World Bank and IMF. Four decades ago, in Like a Conquered Province, Paul Goodman observed that real democracy had to be qualified as "participatory" to distinguish it from what he called "double talk democracy." When the Bush administration and the court intellectuals at U.S. News get all maudlin about the spread of "democracy," you can be sure they're talking about the latter kind.

So what accounts for the difference in outcome?

One explanation might be the very fact of official U.S. approval. William F. Buckley once stated, as "Buckley's law," that any insitution not avowedly conservative in principle would fall victim to creeping liberalism. We might say, similarly, that any Third World movement not avowedly anti-American and anti-neoliberal will be coopted into the global corporate agenda. When the U.S. government is involved in any way in encouraging or strengthening a popular insurrection, the elements sponsored by Soros or NED money will inevitably win out over the genuinely populist elements.

A bigger reason, though, may be that the Latin American movements treat political action as secondary to direct action aimed at building alternative institutions. The main focus of the action is what the Wobs call "building the structure of the new society within the shell of the old." As one of Marge Piercy's characters said in Woman on the Edge of Time, "The powerful don't make revolutions." In discussing who actually laid the groundwork for the future decentralist utopia, in the period leading up to the insurrection, Sojourner said:

It's the people who worked out the labor-and-land intensive farming we do. It's all the people who changed how people bought food, raised children, went to school!... Who made new unions, withheld rent, refused to go to wars, wrote and educated and made speeches.

Political action is concerned mainly with running interference: protecting the new, self-built society from state interference, and hindering the state's ability to roll back the social revolution.

Recently Jesse argued in a post to the LeftLibertarian yahoogroup that

There are conditions under which I think you can do some good by engaging with electoral politics. Libertarian activism is a matter of defending and extending the zones of free action, and sometimes the act of defense might involve, say, targeting an especially obnoxious politician for defeat.

But that's a secondary activity. The idea that one achieves liberty by electing a bunch of libertarians is ass-backwards. You achieve liberty by building alternative institutions, and by rendering any law against those institutions a dead letter.

He made a similar point, at greater length, on his blog a year or so ago:

In the 1970s, libertarians debated the "gradualist" and "abolitionist" approaches to liberty. Advocates of the second course declared that, if they could push a magic button, they would eliminate the state (or 99% of it) overnight. Advocates of the first preferred to dismantle the government piecemeal. Neither approach made sense unless you imagined the speaker was somehow put into a position of power, so he could either push that button or pull all those levers in succession. It wasn't clear which was less realistic: the idea that the abolitionist could find his magic button, or the idea that a series of moderate reforms could someday add up to radical change.

I prefer a different approach. Albert Jay Nock distinguished social power, rooted in the voluntary institutions of society, from state power, rooted in coercion. Both coexist in our culture, each one waxing as the other wanes; the libertarian's goal is to maximize the former at the expense of the latter. Washington is not always the best place to do this. The most promising transformations in America over the last few decades have taken place not when state officials voluntarily relinquished some of their authority, but when social institutions either seized new ground or (more often) crept onto it while no one was watching. Examples range from the homeschooling revolution, which achieved tremendous victories while school choice legislation was at best sputtering forward, to the various DIY alternatives eating away at licensed professions from building to broadcasting. Useful libertarian activism is a matter of defending the zones of free action that exist and assisting the people who are trying to push them further.

That leaves a lot of room for reformism, particularly when the reforms in question simply make room for the voluntary and autonomous provision of services once monopolized by the state or its privileged partners. It also leaves a lot of room for radicalism, especially when you remember that the institutions already on the ground include full-fledged contractual local "governments." You'll see how far society is able to go when you see how far it's willing to go. As Lenin once said in another context, you should be as radical as reality.

That's quite close to the kind of two-track coordination between social and political movements I called for in "A 'Political' Program for Anarchists":

Whenever it is strategically appropriate, we should coordinate the political program with the non-political program of alternative institution-building. The social movement can be used to mobilize support for the political agenda and to put pressure on the state to retreat strategically. The political movement can provide political cover for the social movement and make mass repression less feasible.

Even when it is imprudent for the social movement to resort to large-scale illegality, it can act as a "shadow government" to publicly challenge every action taken by the state (much like the shadow system of soviets and workers' committees before the October Revolution). Even though such "shadow institutions" may be unable to implement their policies in the face of official opposition, that fact in itself is an opportunity to demand, "Why are you using government coercion to stop us from controlling our own schools, community, etc.?" (This can be especially effective in pointing out the hypocrisy of the Republicans' bogus "populism," with their appeals to decentralism and local control). The objective is to keep the state constantly off-balance, and force it to defend its every move in the court of public opinion.

One example I used was the squatters' movement:

So long as the state is bound in legal prinicple to enforce property rights of landlords, any victory won by squatters will be only short-term and local, without permanent results of any significance. But the other side of the coin is that squatters are indigent and homeless people with very little to lose--after all, some people reportedly commit some minor crime around first frost every year just to get three hots and a cot until spring. If every vacant or abandoned housing unit in a city is occupied by the homeless, they will at least have shelter in the short term until they are forcibly evacuated. And the political constraints against large-scale brutality (if the squatters restrict themselves to non-violent tactics and know how to use the press to advantage) are likely to be insurmountable. In the meantime, the squatters' movement performs a major educative and propaganda service, develops political consciousness among urban residents, draws public attention and sympathy against the predatory character of landlordism, and--most importantly--keeps the state and landlords perpetually on the defensive.

Of course, this difference in approach probably also explains why official Washington and the mainstream press are so cool toward Latin American "people power." As much as the necons talk about "democracy" and "civil society," any democracy that involves genuine popular participation (and any form of civil society or "ownership society" that extends beyond the realm of consumption, and encroaches on elite control of production) will be perceived as a threat: more likely to be classified as a form of terrorism than hailed as "democracy." So focusing primarily on social revolution, rather than politics, may very well be the best way for a movement to inocculate itself against the corrupting effects of U.S. approval.

Monday, May 16, 2005

Carnival of the Un-Capitalists

This week's Carvival is hosted by Lenin's Tomb. As always, there's plenty of good stuff: check it out!

Friday, May 13, 2005

Faux Private Interests, Part III: Sean Gabb on ASI-Style "Privatization"

An old gem from Free Life Commentary:

To be fair, the Adam Smith Institute has never been in the same business as the Libertarian Alliance or the Institute of Economic Affairs. It does not propagate ideas independent of who is in power, and wait for some political interest to take them up. Instead, it sells market solutions to statist problems. A typical Libertarian Alliance pamphlet on privatisation, for example, will explore the abstract justifications for getting government out of a certain area, and will describe the general benefits of doing so. An Adam Smith Institute report, on the other hand, will look at the technical questions of how to privatise - at what the shape of the new private activity ought to be, at what special interests need to be conciliated, and so forth. And the report will often only sketch out the details of a proposal that will be fully explained in direct consultancy with a company or ministry....

My objection is not to what Dr Pirie is doing at the moment or what he is about to do. Rather, it is to the whole strategy of the Adam Smith Institute as developed since the early 1980s. It may be that Dr Pirie believes in limited government under the rule of law.... But I have to doubt whether his overall effect on British politics has been to do other than help entrench statism far more securely than it ever was in the past.

The old statism was at least mitigated by incompetence. The people in charge of it were paid too little to feel really important; and much of their energy was absorbed in disputes with stupid or malevolent union leaders. They presided over a system that was never very strong, and that failed to weather the storms of the 1970s.

As reconstructed in the 1980s - partly by the Adam Smith Institute - the new statism is different. It looks like private enterprise. It makes a profit. Those in charge of it are paid vast salaries, and smugly believe they are worth every penny....

But for all its external appearance, the reality is statism. And because it makes a profit, it is more stable than the old. It is also more pervasive. Look at these privatised companies, with their boards full of retired politicians, their cosy relationships with the regulators, their quick and easy ways to get whatever privileges they want....

As with National Socialism in Germany, the new statism is leading to the abolition of the distinction between public and private. Security companies, for example, are being awarded contracts to ferry defendants between prison and court, and in some cases to build and operate prisons. This has been sold to us on the - perfectly correct - grounds that it ensures better value for money. But it also involves grants of state powers of coercion to private organisations. All over the country, private companies are being given powers of surveillance and control greater than the Police used to possess.

....There has been no diminution in the economic power of the State, only a change in its mode of operation....

Yes, I have written for the Adam Smith Institute. I hold many of its people in high regard. I have enjoyed many of its Christmas gatherings - though no more after this appears on the Internet, I suspect! But it has done nothing on the whole to promote liberty in the past 21 years. Every one of the panegyrics on Hayek that I find in its Catalogue is more than balanced by advocacies of the kind of market reform that simply strengthens the hand of the statist enemy. Dr Pirie may pride himself on the number of solutions he has provided. In truth, he is part of the problem.

Once again, this sort of thing is why I don't welcome "privatization" and "deregulation" as a "step in the right direction," just because it increases the amount of activity that's carried out in the nominally "private" sector. When it takes place within an overall statist framework, it just makes state capitalism more efficient and stable; although the nominal public sector may control a smaller percentage of GDP, the system as a whole becomes even more statist and exploitative. As Brad Spangler noted in my previous post's blockquote, increasing the ratio of quasi-private bagmen to the state gunman just makes robbery more efficient. The nominally private corporations that profit from the ASI's "privatized" version of political capitalism, like the big industrialists who conspired with Papen and Hindenburg to put Hitler in power, are part of the state.

Faux Private Interests, Part II: Privatizing the Police State

Last week I linked to a Brad Spangler post on faux-private interests, where he used this analogy to describe "private" interests that benefit from state capitalism:

...one robber (the literal apparatus of government) keeps you covered with a pistol while the second (representing State-allied corporations) just holds the bag that you have to drop your wristwatch, wallet and car keys in. To say that your interaction with the bagman was a “voluntary transaction” is an absurdity.

Now I find this (via Progressive Review): "Chertoff Wants to Set Up Non-Profit Agency to Spy on You"

Homeland Security Secretary Michael Chertoff this week floated an idea to start a nonprofit group that would collect information on private citizens, flag suspicious activity, and send names of suspicious people to his department. The idea, which Chertoff tossed out at an April 27 meeting with security-industry officials, is reminiscent of the Defense Department's now-dead Total Information Awareness program that sought to sift though heaps of foreign intelligence information to root out potential terrorist activity. According to one techie who attended the April 27 meeting, Chertoff told the group, "Maybe we can create a nonprofit and track people's activities, and an algorithm could red-flag individuals. Then, the nonprofit could give us the names."

Hey, it's too bad Hitler didn't turn the Gestapo into a private corporation, so Nazi Germany could be a good "free market" country like Pinochet's Chile.

Thursday, May 12, 2005

Corporations, State Capitalism, and International Trade

[Note: Sorry for the length of this. I haven't been blogging as much over the past couple of weeks, because I'm moving, and this post combines several items in my file of blog material. Just trying to reduce the backlog.]

A provocative article by Mike Hoy at Loompanics.

Libertarianism is a philosophy based on individual rights.

But what happens if groups of people, i.e., collectivist entities, form together for the purpose of getting the government to grant unearned special privileges to them? How will this affect the marketplace? Well, this has actually happened in America, and the result is that these collectivist entities with their government-bestowed privileges have taken over our economy, in some particular cases to the benefit of some particular individuals, but to the overall detriment to individuals in general. These collectivist entities are known as “corporations,” and it is initially puzzling as to why they are lionized by “Libertarians,” who proclaim themselves the defenders of individual rights....

I'll say it again: corporations are not market entities – they are government entities. This was proven by the libertarian/objectivist Robert Hessen in his 1979 book, ironically titled In Defense of The Corporation (Hoover Institution). This is a very funny book, because he states in his prologue: “In this book, the belief that corporations require government permission to exist and that they are the recipients of special privileges will be challenged. I will present an alternative known as the 'inherence theory': i.e., corporations are created and sustained entirely by exercise of individual rights, specifically freedom of association and freedom of contract.”

Now, the essential distinguishing characteristic of the corporate form of enterprise is limited liability for torts. If Hessen (or anybody else) is going to show that corporations are contractual entities, he is going to have to demonstrate that limited liability for torts can be fully accounted for as resulting from voluntary agreements between consenting individuals. Here is where Hessen then proves the exact opposite of what he said he was going to prove. He openly admits that limited liability for torts cannot be a part of the market order! He says:

“Thus far, the inherence theory – the idea that corporate features are created by contract – has been applied to entity status, perpetual duration, and limited liability for debts. But how can limited liability for torts be explained by a contractual theory, since tort victims do not consent to limit their claims to the assets of the corporation?"

In fairness to corporations (words I never expected to write), I have to agree with Murray Rothbard that limited third-party liability against torts, while clearly an illegitimate grant of privilege, is of relatively minor significance compared to limited second-party liability against creditors; and the latter can be accomplished entirely by voluntary contract. (There are exceptions, of course, in such cases as the Price-Anderson Act's indemnification of the nuclear power industry, which the ASI's favorite libertarian wants to extend.) I also agree with Jesse Walker in rejecting arguments that general incorporation is a grant of special privileges. (Jesse also cites Hessen on the comparative insignificance of third-party, as opposed to second-party liability--something Hoy neglected to mention. Third-party tort indemnity is by no means essential to the corporate form.)

The revocation movement’s account of history has been laid out in many places; one is Taking Care of Business, a 1993 pamphlet by activists Richard Grossman and Frank Adams. The tract notes that in the early 19th century, enterprises took many forms, from limited partnerships to unincorporated associations to cooperatives. “Legislatures also chartered profit-making corporations to build turnpikes, canals and bridges,” the authors write. “By the beginning of the 1800s, only two hundred such charters had been granted…. Citizens governed corporations by detailing rules and operating conditions not just in the charters but also in state constitutions and state laws.”

The pamphlet does not explain why a business would tolerate such restrictions, if all it need do to avoid them was not incorporate. The answer, of course, is that incorporation bestowed certain advantages. In those days, historian Robert Hessen notes in his 1979 book In Defense of the Corporation, corporate charters often included special privileges, such as “a legally enforced monopoly, exemption from taxation, release of employees from militia and jury duty, power to exercise eminent domain, and authorization to hold lotteries as a means of raising capital.” Others received direct subsidies from the government.

Those benefits were awarded only to particular corporations.

The movement for general corporation was actually a movement to eliminate special monopoly privileges for corporations.

Even without any special grant of privilege from the state, corporations would still be a useful form of voluntary association for pooling investment funds.

(I do have serious doubts as to whether corporations could function on a national or international scale, in a free market anarchy of loosely federated direct democracies, since there would be no central state to maintain a unified legal system or impose a single law code from above. Under those circumstances, the transaction costs of operating and enforcing rights as a single corporate entity, in a large number of local venues, would likely be prohibitively high in most industries.)

The evils of corporate power derive, not from the corporate form as such, but from the state's enforcement of special monopoly privileges or its grant of subsidies to underwrite various operating expenses. This, in turn, is possible only because of the growth of the largest corporations to a size many times beyond the point of diminishing returns, thanks to state subsidies to the diseconomies of large scale, and the resulting interlocking of organizations and personnel between corporation and state. Without political influence over the state's taxing and spending power, these large corporations would be forced to internalize all of their own costs and risks--in short, they wouldn't be large corporations any more, and the corporation would just be another way for producers to organize their own production.

Back to Hoy:

Managers of corporations have more in common, as a class, with government bureaucrats than they do with individual entrepreneurs.

Now that's something we don't hear said nearly often enough. I find it fascinating that the neocon critics of the New Class (like Peggy Noonan and David Brooks) focus so much on the welfare/educational bureaucracy, or on academic and journalistic intelligentsia, but ignore the role of the managerial New Class in the corporate reorganization of the economy. Taylorism was as much a part of the "Progressive" Era as was the publik skool ideology. And all the claims of current management theory fads to have replaced Taylorism with assorted forms of "empowerment" are worth a bucket of warm spit. TQM, and every other fad of the week, translates in practice to Taylorism, because they're implemented by bosses.

I once worked in a hospital that had three separate offices, side by side, with the word "Quality" in the job titles on the doors. The place was overrun with middle management on "quality committees" doing "root cause analysis," to the extent that there were more of those people there on weekdays than actual nursing staff on the floor. But their approach to solving errors in patient care was not to increase nursing staff (most error results from chronic understaffing and overwork, and the fact that there's not time to slow down and notice things, practice proper septic techniques, or think about what you're doing); rather, it was to appoint yet another committee, and come up with another tracking form for us to fill out on top of everything we were already doing. In fact, their solution to just about everything was to think up a new slogan, tinker with the mission statement, or slap a new coat of paint on the outside. "Shining it on" should have been in their list of "core values." But then, in fairness, I've never seen a place that wasn't like that.

As David Gordon argued in Fat and Mean, the average large corporation (despite the myth of management downsizing) is a hotbed of middle management featherbedding--at the same time that more and more actual work is being squeezed out of fewer and fewer real producers (that wonderful "labor productivity" they're always talking about on MSNBC). In a competitive marketplace, such bullshit might spell the end of a hospital. But in a cartelized market, where every metropolitan areas has two or three big hospitals with the exact same pathological organizational culture, there's no danger whatsoever from competition.

Hoy continues:

....“Libertarian” followers have been taught numerous thought-stopping techniques by “Libertarian” leaders, so that anyone who attempts to discuss the non-market reality of corporations is slapped with a negative label (“anti- corporate,” “anti-trade,” etc.--there are lots), and then any questions raised by that person are literally unthinkable to “Libertarians.”

“Libertarian” leaders use an intellectual sleight-of-hand to get “Libertarian” followers to cheer for corporations. They present their pro-corporate (i.e., pro-government entity) blather as if they are talking about individuals. Let's look at a real-world example. Here is a blurb for the book Why Globalization Works by Martin Wolf from the Laissez Faire book catalog: “The foes of international buying and selling don't like to admit that if it's bad for a New York grocer to trade with a Timbuktu grocer, it's also bad for the New Yorker to trade with a New Jerseyite. Or that the end-of-the-line of such anti-market logic requires you to survive on what you can grow in your backyard, without ever trading your turnips for your neighbor's corn.”

....Contrary to “Libertarian”-spewed horseshit, “Globalization” is not Joe Doakes, “New York grocer” trading his turnips for the corn of Sam Smith, “Timbuktu grocer."

(Uh, couldn't Hoy come up with a better name than "Sam Smith" for a Timbuktu grocer?) I would add, contra the Laissez-Faire Institute's copywriter, that whether "international buying and selling" is a good or a bad thing depends on who's paying for it. All too much rhetoric in the globalization debate equates "free trade" to "more trade" or "globalization." For example, "paul d s" of Global-Growth.Org (in a comment thread) challenged Jim to answer these questions:

(vi) Do you deny that open markets encourage increased trade?

(vii) Do you deny that trade growth generally reduces poverty and brings prosperity?

(viii) Are you opposed to increasing world trade and promoting economic growth in principle?

"More trade" is a bad thing, if its increase is possible only through state intervention to shift or conceal its inefficiency costs. In such cases, "open markets" (unsubsidized markets, in which market actors internalize all their own costs) might well result in reduced trade. A great deal of the trade that takes place today is possible only because so much of the cost side of the ledger is externalized on the taxpayer, rendering it artificially profitable. And when such trade is characterized by government-enforced unequal exchange, it doesn't reduce poverty for the people on the losing side of the transaction. A mugging is a kind of "transaction," and the more times you're mugged the worse off you are. When government enters the picture, "trade" is a zero-sum situtation in which one party benefits at the other's expense. I am not opposed to increasing or reducing world trade "in principle"; so long as people are doing it on their own dime, they can decide for themselves whether it's beneficial or not, and how much of it to engage in. I'd wager, though, that a lot fewer corporations would find it profitable under such circumstances.

Even Logan Ferree of the Geoist DLC, with whom I usually agree, in the Democratic Freedom blog recently treated CAFTA as a pro-free trade litmus test. Worse, he treated the volume of "trade" as such as a net benefit, regardless of the terms under which it takes place.

Any increase in trade will create winners and losers, that's a fundamental fact of economics. The economy as a whole will improve, but let's not pretend that no one will be hurt. With a stronger economy we should have enough wealth, and compassion, to help those who are hurt by increased trade. Democrats should be focusing on how best to harness the economic growth created by trade, not blocking it.

But, as the All-Spin Zone has pointed out, CAFTA actually increases statism in some ways. For example, it mandates pseudo-"privatization" (aka looting) of taxpayer-funded infrastructure, as well as adherence to international "intellectual property" [sic] accords.

As I argued in the comment thread on Logan's post, neoliberal faux "free trade" pacts are simply selective reductions of some forms of state activity, within an overall state-capitalist framework. And the areas of selective reduction are chosen by state capitalist elites, in terms of their own strategic priorities. The overall legal framework necessary for protecting special corporate privileges, and the structural supports for keeping the international economy under the control of large corporations, are maintained or even strengthened. Only those forms of current state activity that no longer suit the TNCs' purposes (those that impede the shuffling of raw materials and unfinished goods between subsidiaries of the international corporate planned economy, and the shipping of finished goods from their sweatshop producers to consumers in the West) are eliminated. The assessment that these trade barriers no longer suit state capitalist interests reflects the transition of most capital-intensive manufacturing from the realm of national capital to transnational capital. The political conflict over tariff barriers is, therefore, a struggle between national capital (the old-line NAM constituency of the textile industry, for example) and transnational capital (the New Deal coalition that has supported pseudo-"free trade" since FDR/Truman engineered the Bretton Woods system).

In practice, no legal system in history has ever regulated every aspect of the economy. Some aspects of the economy, in any system, are subject to mandates and prohibitions, and some are left to individual discretion. It's a safe guess that the respective choice of regulation or freedom, in any system, reflects the strategic interests of that society's ruling class. As the majority argued in Gibbon v. Ogden, the decision of what not to regulate reflected Congress' mercantilist policy intentions just as much as the decision of what to regulate. To let our class enemy set the priorities in "deregulation" and "privatization," in accordance with its own strategic picture, is a recipe for defeat. WE must decide which of the commanding heights of state capitalism to seize and dismantle first, consistent with our own strategic goals.

I fully agree with Logan in considering free trade an unqualified good. It's extremely dangerous, though, to take what our coroporate class enemy calls "free trade" at face value. Things like GATT, NAFTA, and CAFTA have about as much to do with free trade, as the Ministry of Truth has to do with truth.

Getting back to Hoy's point, vulgar libertarian apologists are fond of using individuals, or small firms, as examples to illustrate the principle of faux "comparative advantage" (anything can be comparatively advantageous, if somebody else is underwriting the costs). The discussion of demand and supply curves in the standard micro-econ textbook is written as if the typical firm were still Adam Smith's pin factory. But in fact, something like 30-40% of what's classified as "international trade" is actually an internal transfer between subunits of a single transnational corporation, more akin to the operation of a planned economy than to any kind of real trade. The largest TNCs are approaching the size of the old Soviet economy, with the headquarters of an M-form corporation crunching as many numbers as Gosplan.

Wednesday, May 11, 2005

The Right to Self-Treatment

Great post on medical self-treatment at How to Save the World:

In fact, in the US the right to self-treatment was removed in 1914. This adds to the bottlenecks in our health care system, encourages patients to abrogate their responsibility for self-management of their health, and forces medical professionals to do an enormous amount of work that could easily be done by others (including the patient himself), resulting in unnecessary cost to the health care system....

For his assertion regarding the illegalization of self-treatment, Pollard cites Sheldon Richman:

Another way that the government interferes with the authentic right to health care is through the system of prescription medicines. Citizens of this theoretically free country may not use certain medicines without the written permission of an officer of the state. Yes, doctors are officers of the state by virtue of their having been deputized by the state to grant, or withhold, such permission. That was not true before 1914. Until then, adult citizens could enter a pharmacy and buy any drug they wished, from headache powders to opium. They needed no one's permission. They were, in a phrase, pharmacologically free.

That freedom was abolished as the paternalist ethic gained currency. People had to be protected from their own unwise choices. For their own good, they could not be allowed to prescribe medicines for themselves. At least, that is what they were told. In fact, we know otherwise. When Americans were pharmacologically free, they managed not to kill themselves with overdoses or inappropriate medicines. When they felt it necessary, they sought advice from physicians or others who had greater experience than themselves. Americans somehow knew not to swallow purported medicines without wondering about the consequences. (We know this because population and life expectancy grew all during the period.)

Then they lost this right. They were told they were no longer able to make those kinds of decisions. For some unfathomable reason, they surrendered their authentic right to health care without a bloody struggle.

They were lied to, of course. The doctors and the politicians did not really believe that Americans had suddenly become too benighted to medicate themselves. No, the doctors and politicians wanted power. The prescription law was just one piece of a larger conspiracy against the public. At about this time, the United States got its first laws to license doctors and accredit medical schools. The same paternalistic rationalizations were fed to the public. But the minutes of the medical societies' meetings tell another story. Historian Ronald Hamowy has documented what was really on the minds of the doctors: income. They were concerned that free entry, and hence unrestricted competition, into the medical profession was driving down fees. Only government regulation could keep the doctors living in the manner to which they had become accustomed.

That regulation took several forms. Accreditation of medical schools regulated how many doctors would graduate each year. Licensing similarly metered the number of practitioners and prohibited competitors, such as nurses and paramedics, from performing services they were perfectly capable of performing. Finally, prescription laws guaranteed that people would have to see a doctor to obtain medicines they had previously been able to get on their own. The doctors and politicians succeeded in supporting the medical profession's income; they also contributed to the infantilization of the American people. We have never recovered.

The health-care industry is a textbook example of what Ivan Illich called a "radical monopoly." As I wrote in an earlier post, state intervention artificially skews the model of service toward the most expensive kind of stuff. For example, the patent system encourages an R&D effort focused mainly on tweaking existing drugs just enough to claim that they're "new," and justify getting a new patent on them (the so-called "me too" drugs). Most medical research is carried out in prestigious med schools, clinics and research hospitals whose boards of directors are also senior managers or directors of drug companies. And the average GP's knowledge of new drugs comes from the Pfizer or Merck rep who drops by now and then.

The government having made some aspects of treatment artificially lucrative with its patent system and licensing cartel, the standards of practice naturally gravitate toward where the money is. The newly patented "me too" drugs crowd out drugs that are almost (if not entirely) as good, so that the cost of medicine is many times higher than necessary. The licensing cartel requires diagnosis and treatment by someone with an MD's level of training, when something much less might be all that's needed.

Result: Illich's radical monopoly. The state-sponsored crowding-out makes other, cheaper (and often more appropriate) forms of treatment less usable, and renders cheaper (but adequate) treatments artificially scarce. Centralized, high-tech, and skill-intensive ways of doing things make it harder for ordinary people to translate their own skills and knowledge into use-value. Schooling is something you can only get from somebody with a degree from a teacher's college, according to a state-prescribed curriculum. In the field of housing, around a third of which was still self-built in the U.S. as late as the 1940s, self-building is virtually illegal thanks to local housing codes set by licensed contractors and their lobbyists. This despite the fact that the available technology for self-building (modular houses, "cob" building, etc.) is far more user-friendly than it was sixty years ago. And healthcare, finally, is something you can only get from somebody who's spent eight years in school, jumped through the hoop of his local licensing cartel, and done a residency.

The medical licensing cartel outlaws one of the most potent weapons against monopoly: product substitution. As the Chinese barefoot doctor system demonstrated, much of what an MD does doesn't actually require an MD's level of training. Imagine a private system of accreditation with multiple tiers of training.... The "barefoot doctor" at the neighborhood cooperative clinic might, for example, be trained to set most fractures and deal with other common traumas, perform an array of basic tests, and treat most ordinary infectious diseases. He might be able listen to your symptoms and listen to your lungs, do a sputum culture, and give you a run of Zithro for your pneumonia, without having to refer you any further. And his training would also include identifying situations clearly beyond his competence that required an MD's expertise.

I'm very big on the idea of reviving the mutuals or sick-benefit societies that working people organized for themselves, back in the days before the state and the capitalist insurance companies conspired to destroy them. One small-scale attempt at doing this sort of thing is the Ithaca Health Fund, created by the same people involved in Ithaca Hours.

But this alone is not enough. The problem with such systems is they handle only the financing end of things, while delivery of service is still under the control of the same old institutional culture. Any real solution will have to involve cooperative control over the provision of healthcare itself, as well.

Imagine, for example, a cooperative clinic at the neighborhood level. It might be staffed mainly with nurse-practitioners or the sort of "barefoot doctors" mentioned above. They could treat most traumas and ordinary infectious diseases themselves, with several neighborhood clinics together having an MD on retainer for more serious referrals. They could rely entirely on generic drugs, at least when they were virtually as good as the patented "me too" stuff; possibly with the option to buy more expensive, non-covered stuff with your own money. Their standard of practice would focus much more heavily on preventive medicine, nutrition, etc., which would be cheap for members of the cooperative who didn't have to pay the cost of an expensive office visit to an MD for such service. Their service model might look much more like something designed by, say, Dr. Andrew Weil. One of the terms of membership at standard rates might be signing a waiver of most expensive, legally-driven CYA testing. For members of such a cooperative, the cost of medical treatment in real dollars might be as low as it was several decades ago. No doubt many upper middle class people might prefer a healthcare plan with more frills, catastrophic care, etc. But for the 40 million or so who are presently uninsured, it'd be a pretty damned good deal.

And by the way: I object strenuously to those who see a single-payer system, or a government-controlled delivery system like the UK's National Health, as the solution. I'd like to give those who talk about healthcare being a "right" the benefit of the doubt, and assume they just don't understand the implications of what they're saying. But when you talk about education, healthcare, or anything else being a "right," what that means in practice is that you get it in the (rationed) amount and form the State wants you to have, and buying it in the form you want becomes much more difficult (if not criminalized). It means the providers of the service will be cartelized, and that the provision of the service will be regulated according to their professional culture and institutional mindset.

Making something a "right" that requires labor to produce also carries another implication: slavery. Nobody is born with a "right" to somebody else's labor-product: as Lilburne said, nobody is born with a saddle on his back, and nobody is born booted and spurred to ride him.

Tuesday, May 10, 2005

Lump of Labor "Fallacy"

There's a really interesting dustup over at Wikipedia over the article on the "lump of labour fallacy." Tom Walker, of the Work Less Party (and blog), added some comments in rebuttal of mainstream economists' treatment of that alleged fallacy; his critique was based on the analysis in this article. Tom's comments were deleted by a subsequent editor, on the grounds that Tom was insufficiently credentialled and peer-reviewed: a rather odd position, given Wiki's status as a people's medium for circumventing professional academic gatekeeping. A vigorous debate over the editing ensued in the article's "discussion" forum.

The following remarks are based on my comment at Tom's blog.

It's not self-evidently false that machines or techniques that reduce the amount of labor necessary to do a job will reduce the amount of available work. Arguments that it is are typical of vulgar libertarianism: they are equivocal as to how far the present system can be taken as a proxy for a "free market." To say that something "can't happen" under the present state capitalist system, because that's "the way the market works," is nonsense.

In a real free market system, the bargaining power of labor would be such that jobs competed for workers, instead of the other way around. And cooperative ownership and self-employment would be much more widespread than at present. Under those circumstances, decisions to change production methods would be decisions by labor itself to increase its own productivity, with labor internalizing all the good and bad consequences of the decision. Under those circumstances, it would indeed be a fallacy that workers would suffer from increases in productivity.

But in the present government-cartelized system, with legally enforced privileges for land and capital that force labor to sell itself under terms of unequal exchange, it's hardly likely that labor will internalize all the benefits of changing the work process. The presence of the state in state capitalism causes changes that might otherwise be mutually beneficial, instead, to be a zero-sum game.

So it's quite likely, under such circumstances of privilege, that the benefits of increased labor productivity would accrue to the owners of capital, while the harm would accrue to workers.

We don't live in a free market economy, or anything remotely approaching it. In a government-cartelized, corporate-dominated economy like the present one, the rules of "how the free market works" go right out the window. For example, it makes no sense to use Say's Law to "prove" that overproduction is impossible. As Joseph Stromberg pointed out, under state capitalism J.A. Hobson could be closer to the truth than J.B. Say.

Sunday, May 08, 2005

Carnival of the Un-Capitalists

The All-Spin Zone is host of this week's Carnival of the Un-Capitalists. The theme is Latin America.

Friday, May 06, 2005

Snitching for Fun and Profit

Hat tip to Ken MacLeod. Keep Your Coils Clean links to a story about the latest intersection between the authoritarian state and the human resource processors in the publik skools.

For a growing number of students, the easiest way to make a couple of hundred dollars has nothing to do with chores or after-school jobs, and everything to do with informing on classmates.

Tragedies like last month's deadly shooting at a Red Lake, Minn., school have prompted more schools to offer cash and other prizes — including pizza and premium parking spots — to students who report classmates who carry guns, drugs or alcohol, commit vandalism or otherwise break school rules.

"For kids of that age, it's hard for them to tell on their peers. This gives them an opportunity to step up if they know something that will help us make an arrest," said James Kinchen, an assistant school superintendent in Houston County, Ga., which earlier this month started offering rewards of up to $100 for reporting relatively minor crimes like vandalism or theft and $500 for information about a crime, or plans for a crime, involving a gun.

But of course! There's so much less stigma involved in snitching when you're doing it for thirty pieces of silver, than when you just do it because you believe (however misguidedly) you're doing the right thing.

The traditional social mores by which snitches and informants are held in contempt, it goes without saying, are viewed with extreme disfavor both by the police state and the publik skools. This is just the latest in a series of initiatives, following on the heels of such programs as DARE and WAVE, aimed at removing the stigma associated with being a dirty little sneak who betrays family and friends to the authorities.

A few years back, I heard a story on NPR about the effect of TV violence on children. The story included an interview with an elementary school teacher who was nearly sobbing as she related her frustration at the reluctance of her wards to report each other's conversations to her. So she solved the problem by planting a mike to tape their conversations without their knowledge. Of course, the admirable quality of snitching and the obvious rightness of electronic eavesdropping weren't even at issue in the interview; they just set the background for the main point of the story, which was the extent to which children's playground conversation was taken up by the violent TV shows they'd watched the night before. As you might expect, this had the lachrymose teacher approaching near-Sally Struthers levels of hysteria about "the children."

The Screw the Kids blog (apparently defunct, alas) put it quite well: "Every time some syphylitic drip-dick of a politician or public policy wonk wants to pass a stupid new law, they cry 'It's for the children.'"

The article continues:

Critics call them "snitch" programs, saying they are a knee-jerk reaction to student violence. Some education professionals fear such policies could create a climate of distrust in schools and turn students against each other.

"There are very few things that I can think of that would be more effective at destroying that sense of community," said Bruce Marlowe, an education psychology professor at Roger Williams University in Bristol, R.I.

Ah--but that's the point! A sense of community is just what an authoritarian state doesn't want. A cohesive society, functioning independently of the state, can become the basis for resistance; an atomized society is so much easier to control.

Some students fear classmates with a grudge or set on making some quick money may level false accusations or plant drugs or weapons in their lockers.

But Houston County's Kinchen said: "That will sort itself out. Our officers deal with these kind of things every day; they can find out which kid is being set up and which kid is telling the truth."

Well, of course they deal with them every day. In the drug war, cops are often the very ones doing the "setting up." All it takes is a jailhouse snitch to make an accusation in return for better treatment, and that fancy speedboat the cops have been coveting can be seized without any need for criminal prosecution. It might be auctioned off to buy tasers, kevlar vests and gas-masks; it might be sold to a cop for $5 in a "private auction"; or it might just disappear from inventory.

It's especially ironic, in the light of such surveillance programs, that the cops object so strenuously to organizations like CopWatch that attempt to turn the tables by keeping an eye on them. CopWatch observers who monitor local police forces for civil rights abuses are frequently prosecuted for "obstructing police work" simply for quietly videotaping police stops and arrests. I don't know why the cops are so upset about such monitoring: as the saying goes, if you haven't done anything wrong, then you've got nothing to worry about. What do they have to hide?

The Perils of Utilitarian Property Rights Theory

Brad Spangler directed me to this great Murray Rothbard quote:

Suppose that libertarian agitation and pressure has escalated to such a point that the government and its various branches are ready to abdicate. But they engineer a cunning ruse. Just before the government of New York state abdicates it passes a law turning over the entire territorial area of New York to become the private property of the Rockefeller family. The Massachusetts legislature does the same for the Kennedy family. And so on for each state. The government could then abdicate and decree the abolition of taxes and coercive legislation, but the victorious libertarians would now be confronted with a dilemma. Do they recognize the new property titles as legitimately private property? The utilitarians, who have no theory of justice in property rights, would, if they were consistent with their acceptance of given property titles as decreed by government, have to accept a new social order in which fifty new satraps would be collect­ing taxes in the form of unilaterally imposed "rent." The point is that only natural-rights libertarians, only those libertarians who have a theory of justice in property titles that does not depend on government decree, could be in a position to scoff at the new rulers' claims to have private property in the territory of the country, and to rebuff these claims as invalid.

This discussion of utilitarian property rights theory reminded me of article I read a couple years back presenting an anarcho-capitalist model of eminent domain: a powerful party seizes someone else's property for a "better and higher use," and then pays damages in court--essentially using local juries to assess payment for seized land after the fact. I'm almost certain I saw it at Anti-State.Com, but for the life of me I can't track it down. I'm also pretty sure I remember who the author was, but since it doesn't presently appear in his archives, I don't want to unfairly charge him with it.

Here's what bugs me about all the pseudo-Coaseian arguments that the origin of property titles doesn't matter, because the market will sort them out to the most efficient users: it's not much consolation to a peasant proprietor who could be supporting himself by subsistence farming, but is currently squatting in a Calcutta gutter with a begging bowl, that the land is being used more "efficiently" by Cargill. (Of course, my knowledge of Coase is completely indirect, mainly from his use in vulgar libertarian apologetics, since I don't have the neoclassical math apparatus it takes to follow his argument in original form.) Peter Lawrence has pointed out that while the enclosure of common lands may have increased the "net efficiency" of society, one group that definitely did not benefit from this increased output were the people whose land was stolen.