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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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Wednesday, February 09, 2005

Who Needs Nostradamus? Hilaire Belloc Predicts "Ownership Society"

This via Mises Economics Blog:

The surprising thing about the private investment accounts proposed as a Social Security reform and considered a hallmark of an ownership society is that they'll likely leave account owners with little direct control. Workers will be offered few investment choices, won't be able to access the money until retirement, and some will be forced to annuitize their account funds when they retire, according to details released by the Bush administration on Thursday. Plus, the opportunity to re-allocate money among the different fund options will likely be limited to one or two times per year.
Cf. what Hilaire Belloc had to say about unemployment insurance, in The Servile State:

A man has been compelled by law to put aside sums from his wages as insurance against unemployment. But he is no longer the judge of how such sums shall be used. They are not in his possession.... They are in the hands of a government official. "Here is work offered you at twenty-five shillings a week. If you do not take it, you certainly shall not have a right to the money you have been compelled to put aside. If you will take it the sum shall still stand to your credit, and when next in my judgment your unemployment is not due to your recalcitrance and refusal to labor, I will permit you to have some of your money: not otherwise."

Of course, Belloc probably didn't foresee this principle being taken to the extreme that it has in Germany, where a woman was threatened with a cutoff of her unemployment benefits if she refused work as a prostitute. But generally speaking, he was pretty good at predicting the anti-worker effects of so-called "progressive" policies, when administered (as they were likely to be) on behalf of the capitalist class organized through the state.

One feature of forced savings programs like Social Security (as well as the allegedly "privatized" forced savings Bush advocates) is that, because the state prohibits withdrawal before a certain age, the worker cannot use them as part of his overall package of savings and pensions to retire early at a time of his own choosing. A worker's SS equity, combined with his personal savings and private pensions, might be enough taken together to enable him to retire at, say, 50. But if he is restricted from receiving a reduced SS income at that age, the income from his other sources alone may not be sufficient to retire on. So in effect, the state reduces the bargaining power of labor and its ability to subsist on its own resources--just like Belloc said.

The faux-privatization of Social Security is typical of the sort of thing that passes under Bush's neoconservative "ownership society" (as is also the case with neocon "privatization," "civil society" and "federalism"). They are all either crony capitalism or centralist social engineering cloaked in phony Norman Rockwell symbolism.

The neoconservative variant of "ownership," as we've commented before (see the remarks here on neocon "civil society"), applies only to the realm of private consumption and what neo-Marxists call the "social factory." Any form of distributive ownership of property that genuinely increases the bargaining power of labor, its independent access to the means of subsistence, or its ability to self-organize capital, it goes without saying, is out of the question.

"Privatization" may result in a reduction of the total amount of money nominally administered by the state budget, but the money is still spent within a network of rules largely defined by the state (as with the school "vouchers" and "medical savings accounts" so beloved of neocons).

What passes for "federalism" under the neoconservative reign of virtue is simply a decentralized administration of federal money, but with all sorts of mandates attached in the interest of promoting the correct social values (not to mention protecting big business interests). Same thing goes for the neocon idea of "limited government," in which the Tenth Amendment takes a back seat to a reading of the Commerce Clause that would make Hamilton and Marshall blush, whenever a state's tort law or other regulations threaten the interests of a corporation doing business there. Indeed, the "strict constructionists" in Congress will resort to preempting state law in a New York second, if necessary to protect the "average Joes" in the corporate suites. (Thus the recent proposal to remove class action lawsuits from state court jurisdiction.)

As a matter of fact, as Gabriel Kolko wrote in The Triumph of Conservatism, one of the main motives behind the federal regulatory state was for a least-common-denominator federal standard that would preempt potentially more stringent state standards. In addition, the enforcement of minimalist federal standards through administrative law is probably less costly to pollutors and other corporate malfeasors, in most cases, than would be enforcement of the common law of public and private nuisance that the administrative state superceded (see Horwitz's The Transformation of American Law). In other words, the "progressive" regulatory state was a plutocratic-mercantilist coup comparable to that carried out by the Federalists in 1787 (cf. the neocon Federalist Society's version of "strict constitutionalism).

On the whole, the agenda of American Enterprise Institute-style "conservatives" (as well as Adam Smith Institute-style "libertarians") aims not at a real reduction in the power of the state, but (as I argued at length in an earlier post) only in a reduction in the amount of the economy nominally administered by the state. If anything, the role of the state in the overall state-capitalist framework of rules is intensified.

Correction--Jesse Walker tells me the story of the German woman forced into sex peonage by the state is an urban legend. To quote Emily Litella: never mind.


Anonymous Anonymous said...

I've just been catching up on some of your pages with a view to making some lengthy comments after preparing them offline.

, and it turns out not to be such a myth after all.

made, only it was made automatically by computer according to preset specifications. However, as soon as it happened, it was possible to override it manually and reinstate the complainant's legal entitlements - it wasn't a purely computerised system with bureaucratic inflexibility.

But, as you say, never mind.

April 15, 2005 8:22 AM  
Anonymous Anonymous said...

Drat. Something snipped most of what I was trying to put.

Have a look at the coverage of this issue at Jerry Pournelle's site.

It turns out that the German thing did happen, only it was due to an inflexible computer system. However, the system as a whole allowed the entitlements to be reset manually as soon as the complaint was made, and that fixed things.

But, as you say, never mind. A bureaucratic system is rarely amenable to being corrected.

April 15, 2005 8:27 AM  
Blogger Kevin Carson said...

Well, thanks for reassuring me that things are almost as bad as I thought they were. Now I know how Ren Hoek felt when he took off that Helmet of Happiness. All's well with the world!

April 15, 2005 2:26 PM  

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