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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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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.


Anonymous Brad Spangler said...

In my opinion, what we're really doing is attempting to refine the class theory of Comte and Dunoyer:


...and explore its implications.

It's been referred to as Libertarian Class Theory by for a while now. Examples:

Libertarian Class Theory
How the Political Class Exploits the Economic Class
by Rick Tompkins

Mises Legacy to Feminism
An analysis of libertarian class theory
by Wendy McElroy

Radical Solidarity and Moderate Anarchism
[Anthony Gregory mentioning it in passing in a good overall article]

The Other War
[me spouting off]


This may seem ironic, coming from a self-professed anarcho-capitalist (although I've come to prefer the term Market Anarchist), but it seems more and more that events and ideas are driving the better thinkers to build a "Marxism 2.0". Consider:

1) Start with Marxism.

2) Substitute the class theory of Comte and Dunoyer for Marx's -- perhaps refining it with a better statement of what constitutes unjust exploitation.

3) Refine Marx's denunciations of primitive accumulation with an understanding of property titles arising independently of the State [radical Lockean or other].

4) Address, somehow, the shortcomings of the Labor Theory of Value. I prefer straight Misesian Subjective Price Theory whereas (as I understand it) you prefer a modified Labor Theory (please correct me if I'm wrong).

And so on...

Rothbard got us a lot of the way there, but perhaps I'm just showing my influences.

Some work might also be appropriate on how the influence of Austrian economics has some business mangement consultants sounding pseudo-syndicalist at times. For example, compare:



"In such an environment management itself changes from planning, monitoring, and controlling to simply ‘what collaborating individuals share’."


Where distributed management fails within the statist corporation, it does so due to organizational constraints arising from the inflexibility inherent to being a state-allied institution in my opinion.

May 14, 2005 3:29 AM  
Anonymous Brad Spangler said...

Almost forgot...

The relatively good news in relation to this:

"...increasing the ratio of quasi-private bagmen to the state gunman just makes robbery more efficient."

...is that it's only partially true. To understand why, we can look to explanations from Austrian economics of why authentic private enterprise (in aggregate) is more efficient than state enterprise. To the degree an enterprise isn't authentically private, those reasons will apply to it to a lesser degree.

It's not that merely calling something private really makes it so by fiat and somehow magically makes it efficient. Rather, efficient enterprise is what we tend to see develop when inefficient ones are allowed to fail in the marketplace. It's an evolutionary process. When this process of natural selection among enterprises is suppressed by means of alliance with the State, the incentives and correcting mechanisms that actively root out inefficiency are partially or wholly removed.

Note to self, must do some work on a "Theory of The Revolutionary Firm" geared toward business students.

May 14, 2005 5:12 AM  
Anonymous Anonymous said...


An important Austrian contribution to your "Marxism 2.0" would be the recognition that the Comte/Dunoyer classes are properly treated as praxeological, not demographic, categories. Individuals can and do use both economic and political means to pursue their ends at different times-- and yet it makes sense to speak of economic actors and political actors, just as it makes sense to speak of consumers and entrepreneurs even though every entrepreneur is also a consumer. The praxeological/demographic distinction makes class theory both more conforming to reality and less likely to lead to violations of individual rights.

--Nick Weininger

May 14, 2005 10:23 AM  
Blogger Kevin Carson said...

Those are all excellent links, including your "The Other War." I've been heavily influenced by the Comtean distinction between the political and economic means, but I got it second-hand through Oppenheimer.

On "privatized" statism being "more efficient," in meant in comparison to functions being formally carried out by the state. Unfortunately, the state attempts to subject genuinely private enterprise to a framework of rules in which the state capitalists have the advantage.

On the statist framework that ASI-style "privatization" takes place in, check out the article at On the Corner linked in this post:



Of course, although most people resort to both the political and economic means at different times, there are still net exploiters and net exploited.

May 14, 2005 4:09 PM  
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