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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 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.


Anonymous Atreyu42 said...

I suggest a mix between the land value tax proposed by geolibertarians and the negative income tax suggested by Milton Friedman.

The idea is that those with more land than the deserved land per capita, should have to pay a tax. Yhe collected tax would go to those with less than that land per capita. The ammount of the tax would be fixed by direct democracy, and the landlord could always sell the land in the free market to avoid the tax.

This would create a system with the three dimensions of liberty: personal liberty, economic liberty and positive/political liberty.

May 22, 2005 11:07 AM  
Anonymous Atreyu42 said...

"Like rent, interest is the offspring of state-supported monopoly privilege, not of liberty or community".

I don't agree. The problem isn't interest. The problem is debt: "My current position is that one cannot be ethically bound by agreements that restrict one's liberty to be self-governing. It has always been my view that one cannot be bound by an agreement to be a slave. Although one can enter into a contract that mandates one to serve as a slave, one should be considered free to cease honoring that contract at any time".

So the problem is that once you borrow money in a capitalist system, you are enslaved no matter if you cannot afford to pay the loan nor the interest. And the state will enslave you, forcing you to pay the interest forever or making the debt grow exponentially.

But what if you were not forced to pay the loan? What if you could choose not to pay it?

Microcredits (or grameencredits) are loans that you can choose not to pay at any moment: "Most distinctive feature of Grameencredit is that it is not based on any collateral, or legally enforceable contracts. It is based on 'trust', not on legal procedures and system."

Are microcredits and their interest robbery? I don't think so.

May 22, 2005 1:00 PM  
Blogger Kevin Carson said...

I still haven't embraced the Geoist view of rent, but I find the arguments fascinating. Geoists and Tuckerites at least have the understanding in common that land is different, because "they're not making any more of it."

On interest, whether or not it is robbery depends on whether the rate is higher than would be the case in a free market, as a result of state intervention. On ending the state's ability to enforce payment, Spooner made a similar argument. If a debtor simply couldn't pay, because of unforseen circumstances, and there was no evidence of intent to defraud, then by golly he couldn't pay. It was the lender's responsibility to identify a good risk; and the main incentive to repay would be future credit-worthiness. Are you a Spoonerite, by any chance?

May 25, 2005 8:39 PM  

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