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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

Thursday, June 30, 2005


....Klaus von Bulow Baby Jessica Joey Buttafuoco Menendez brothers British au pair Tonya Harding Lorena Bobbitt O.J. Simpson JonBenet Ramsey Susan Smith Survivor Chandra Levy Robert Blake Kelly Clarkson Elizabeth Smart Laci Peterson Kelly Lynch Terri Schiavo Runaway Bride Michael Jackson Natalee Holloway Brennan Hawkins....

Almost Thou Persuadest Me: Or, Why I Am Not (Quite) a Georgist

I participate in a lot of Georgist discussion forums, and have quoted quite a few Geolibertarians of various stripes in my blogposts. Generally speaking, I am on quite friendly terms with Georgists, and have a lot of sympathy for their ideas. But I've never found their arguments convincing enough to embrace full-blown Georgism.

Of course, the individualist anarchists' occupancy-and-use ideas on land ownership have a lot in common with Georgism. Both theories are outgrowths of the radical fringe of early classical liberalism. They both, in very Ricardian terms, tend to see landlordism as a form of parasitism, a sinkhole that absorbs the fruits of progress created by human labor and ingenuity. Both theories, as distinguished from mainstream Lockeanism, are premised on the understanding that "land is different," because "they're not making any more of it." Both mutualism and Georgism operate on the assumption that, both because of this limited supply, and the fact that they are not the product of human labor, land and natural resources are in some sense the common inheritance of mankind. The Georgists treat the community as steward for this common heritage in a much more active way, seeing it as the proper agent for collecting the compensation owed everybody else when somebody removes a piece of land from the common. Mutualists and individualists see the common property in land as a much more residual thing, extending only to refusing to enforce absentee titles on behalf of someone who wants to exclude others from a piece of land, when he isn't using it himself.

Although I don't (ultimately) go along with the idea of a land value tax on ordinary commercial and residential land, I am quite favorable to the Geolibertarian idea of treating especially limited resources (aquifers, old-growth forest, mineral deposits, coastal and riparian frontage, etc.) as a common, with the community regulating access to them.

And although I don't favor the LVT as part of an end-state society, I'm a lot more open to it as a transitional measure. That is, if we accept that the state will be abolished gradually, and that some taxation will take place in the transition period, a tax on the site value of unimproved land is probably the least unjust tax anybody could come up with. If my state or local government proposed abolishing sales and personal property tax, and real estate tax on buildings and improvements, and shifting it all to an increased tax on site value, I'd enthusiastically support it.

All this being said, I still haven't been sold on the full package of goods. For one thing, I don't believe there are many (if any) genuine "public goods" that can't be funded by user fees on the people actually benefiting from public services. And when a service can be funded by user fees, I prefer to do so. People make much more rational use of such things when they're priced according to cost and they have to pay for what they use, than when they're funded out of general revenue. So either the rent the community collects will be extremely low, or there will be an almighty big citizen's dividend from what's left over.

I also don't think the problem of economic rent is that serious, in and of itself. It would be mitigated considerably under an occupancy-and-use regime, and a society in which public services were provided on the cost principle.

For example, a great deal of the present inflated value of favorably situated land is actually an externality from subsidized infrastructure. Good schools, subsidized roads, utilities, etc., drive up property values when the recipients of these goods don't pay the full cost of providing them. If they were funded on a cost basis, and the people using them were assessed the full cost of providing the service, it would reduce the demand-driven market value of real estate quite a bit.

A lot of inflated site value in urban areas also results from artificial scarcity: that is, it's really an indirect result of absentee landlord rent, not economic rent as such. Nock, despite being a Georgist, himself noted as much in his discussion of the political preemption of land. A great deal of the scarcity of land is artificial, resulting from large parcels being held vacant by absentee owners for speculative purposes. If all such land in built-up areas were opened to settlement, the rental value of the rest would go down considerably.

In addition, economic centralization increases the scarcity of favorably situated land. It's simple geometry. When industry is small-scale and for local production, and population is dispersed into lots of pedestrian-bicycle friendly mixed-use communities of a few thousand people, it will be a lot easier to find commercial land within a short distance of one's customers. Likewise zoning restrictions on mixed-use development, which artificially increase the distance between where people live and where they shop and work. When economic activity is dispersed and local, and neighborhoods include both homes and businesses, favorably situated land will be a lot less scarce compared to the general population.

Wednesday, June 29, 2005

Knappster: There's Property, and Then There's Property....

Last week, the Supreme Court ruled that property rights are so trivial and unimportant that it's okay for any politician with a bribe in his pocket and a wild hair up his ass to take your home at gunpoint, bulldoze it and build a parking lot where it used to be.

Today, the Supreme Court ruled that property rights are of such paramount importance that anyone who creates a tool which might conceivably be used to violate them can be held liable if anyone does violate them.

Apparently the importance of property rights depends on just whose rights we're talking about -- your real ones, or the imagined ones of governments and corporations.

Some animals are more equal than others.

Kind of makes you wonder what world the liberal blogosphere lives in. Do you think it's ever the McMansions or the gated communities that get bulldozed for "economic development projects," or to build a new freeway? And it's funny how those "blighted areas" are always inhabited by poor people--and how the "revitalization" projects always result in a net loss of housing units, with the new ones priced out of their range. Not to mention how downtown gentrification, in the process of making Main Street attractive to a bunch of yuppie bastards, also prices it out of the range of family businesses operating on a shoestring budget. And at every step of the process, the real estate interests get rich. But Daily Kos and fellow travellers are so hypnotized by all the Art Schlesinger rhetoric about government as a "progressive" force, and Clinton's hoodoo that government's just "all of us working together," that they refuse to see the hand in their pocket.

P.S. There's some great stuff at Counterpunch on the same theme.

Alexander Cockburn: ....the Court’s liberals, plus Souter and Kennedy decreed that between private property rights on the one side, and big-time developers with the city council in their pockets on the other, the latter wins every time.....

The case on which the Court ruled was known as Kelo v. City of New London. In the decorous prose of Linda Greenhouse in the New York Times, it concerned “a large-scale plan to replace a faded residential neighborhood with office space for research and development, a conference hotel, new residences and a pedestrian "riverwalk" along the Thames River. The project, to be leased and built by private developers, is designed to derive maximum benefit for the city from a $350 million research center built nearby by Pfizer Inc., the big pharmaceutical company.”

I assume every CounterPuncher can figure out what this really means. God help all “faded residential neighborhoods”. Well, if the poor folks work really hard maybe they’ll be able to go live in the Grand Hyatt or Towne Plaza raised on the rubble of their homes.

George Corsetti [producer of Poletown Lives!]: Justice Stevens talks about how the New London plan was “carefully formulated” and how the local legislatures and courts were best at “discerning local public needs.” Nonsense. Many of these local politicians have the values of used car salesmen and the not-so-subtle exchange of votes for campaign contributions is commonplace....

The difficulty with this case and with this issue is that it does not address the fact that there is simply too much money to be made by politically connected developers and too many corrupt, self-serving local politicians and legislators willing to do their bidding.

And the media, our watch dog on government, is as profit-driven as the developers and is certainly more closely aligned in interest with the banks and chamber of commerce types than with the working class. If anything, the corporate media can be depended upon to cast the issue in a way that makes voting against some development project akin to burning the flag. How could anyone be “opposed to progress” or opposed to a development that will “produce jobs” or “clear slums” or “increase the tax base?”

Tuesday, June 28, 2005

Taser Tuesday: Too Close to Home

Gretchen Ross at Green Lantern has been carrying a Taser Tuesday feature for a long time now, but unfortunately the issue just hit her on a more personal level. Her sister, returning to Canada from a trip to the States, had a nasty experience with the jackboots of the U.S. Border Patrol. Throughout the experience, she remained painfully aware of the thug's grip on his 50,000 volt taser. I don't know what cops are like in Canada, but I'm sorry Gretchen's sister had to learn firsthand what twenty-odd years of Drug War militarization has done to U.S. law enforcement. In all too many communities, they view themselves as an occupying force, a band of brothers surrounded by a hostile population. That was exactly the recipe for My Lai.

If you think I'm being overly dramatic, check out Gretchen's Taser Tuesday archives. You can find all sorts of utterly horrifying stuff in the regular "Who the Police Beat" feature, in Fred Woodworth's periodical The Match!* The causes of the problem are discussed in an article by Cato's Diane Cecilia Weber: "Warrior Cops: The Ominous Growth of Paramilitarism in American Police Departments"

And if you think that thing about an occupying force in a hostile population was too over-the-top, just read this quote from Weber's article:

We’re into saturation patrols in hot spots. We do a lot of our work with the SWAT unit because we have bigger guns. We send out two, two-to-four-men cars, we look for minor violations and do jump-outs, either on people on the street or automobiles. After we jump-out the second car provides periphery cover with an ostentatious display of weaponry. We’re sending a clear message: if the shootings don’t stop, we’ll shoot someone.

You know that scene in the opening of Escape From New York, where the U.S. national police, in Nazi Chic black uniforms, pile out of the black cruiser? It ain't fiction any more. I saw a story a few years ago in my local newspaper about how the cops here were switching to black uniforms, as part of a national trend. Supposedly the reason was that it was hard to find stable suppliers for various shades of gray and blue, but black was always in stock somewhere. But somebody from a local police force also added, helpfully, that people tended to show more "respect" to a guy dressed like a Sturmbannfuhrer. "Respect," indeed. The Prussianization of our culture proceeds apace. It's only a matter of time till we're showing the kind of respect that civilians showed in Berlin ca. 1900, stepping off the sidewalk when they saw anyone in uniform.

My dad was a cop, and a good friend of mine is a cop now. But every time I see a police cruiser behind me, I get real nervous. And if it follows me through a couple of turns, I just about go ballistic. I know my dad was a good man. I don't know these guys, and an awful lot of people are attracted to the uniform for the same reasons as Dim in A Clockwork Orange. As jittery as cops are nowadays (what with the hostile occupied population and all), you never know when they'll interpret the wrong kind of nervous eye-twitch as "aggressive behavior" or "resisting arrest" and taser you about 47 times or so--and then taser you some more for "not obeying instructions," because you're too busy convulsing in agony. And if anything happens, unless you're lucky enough to be videotaped, it's your word versus theirs. They'll probably throw as many charges as possible at you to blackmail you into copping a guilty plea. As somebody once said in a comment thread over at Eschaton, I'm starting to feel like I'm in a Paul Verhoeven movie based on a Phillip K. Dick novel.

Here's Gretchen's comment from her newsletter:

As a side note, when an American police officer approaches you with a taser, it doesn't matter that you've done nothing wrong. It doesn't matter if you have a reasonable and legal explanation. You don't argue, you don't talk about your rights, unless you want to risk getting 50 thousand volts, possibly consecutive times.

They taser people for absolutely nothing now, so these people who foolishly believe they are free get upset and start talking about the bill of rights. These people are only making their own hospital bed when they do that. This isn't your great grandfather's America. You fall out of line in the slightest, and you might get tazed. Which, judging by over 103 cases of taser related deaths, might kill you.

Now, if you're prepared to be tasered over nothing, and risk injury and death, by all means, bring up your rights. But if you like having voluntary control over your own muscles, and particulary if you enjoy being alive, just bend over and take it for your country's freedom. Do as you're told, citizen.
* The Match! P.O. Box 3012, Tucson, AZ 85702. Free for the asking, but send a $5 (cash) donation per issue.

Maxspeak on Thomas Friedman

According to Max Sawicky, Tom Friedman's been getting rich off protectionism:

Of course, Thomas Friedman is a huge supporter of protectionism, it has made him a relatively wealthy man, he just doesn't realize it.

How is Thomas Friedman a protectionist? Well, for one he sells books that are protected by copyrights. Copyrights are GOVERNMENT imposed monopolies. The government will arrest me if I make copies of Thomas Friedman's books and sell them like any other good (or in the Internet Age, I make it available for free on the web).

Actually, this is quite consistent with what Friedman means by "free trade." It doesn't take much reading between the lines to realize that when Friedman talks about the neoliberal version of "free markets," he's fully aware that they're a statist construct.

For globalism to work, America can't be afraid to act like the almighty superpower that it is....The hidden hand of the market will never work without a hidden fist-McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps.

In other words, what Thomas Friedman means by "free trade" would make Cobden and Bright roll over in their graves. His idea of "free trade" has fallen afoul of Joseph Stromberg's acid wit:

For many in the US political and foreign policy Establishment, the formula for having free trade would go something like this: 1) Find yourself a global superpower; 2) have this superpower knock together the heads of all opponents and skeptics until everyone is playing by the same rules; 3) refer to this new imperial order as "free trade;" 4) talk quite a bit about "democracy." This is the end of the story except for such possible corollaries as 1) never allow rival claimants to arise which might aspire to co-manage the system of "free trade"; 2) the global superpower rightfully in charge of world order must also control the world monetary system.

Contrast that to real free trade:

The formula outlined above was decidedly not the 18th and 19th-century liberal view of free trade. Free traders like Richard Cobden, John Bright, Frederic Bastiat, and Condy Raguet believed that free trade is the absence of barriers to goods crossing borders, most particularly the absence of special taxes – tariffs – which made imported goods artificially dear, often for the benefit of special interests wrapped in the flag under slogans of economic nationalism. That was the point, for instance, of the Anglo-French treaty of 1861 which abolished a whole array of restrictions.

Classical free traders never thought it necessary to draw up thousands of pages of detailed regulations to implement free trade. They saw no need to fine-tune a sort of Gleichschaltung (co-ordination) of different nations’ labor laws, environmental regulations, and the host of other such issues dealt with by NAFTA, GATT, and so on. Clearly, there is a difference between free trade, considered as the repeal, by treaty or even unilaterally, of existing barriers to trade, and modern "free trade" which seems to require truckloads of regulations pondered over by legions of bureaucrats.

The present neoliberal project of "free trade" dates back to FDR/Truman's Grand Area, and the global economic order enforced by the Bretton Woods agencies:

....I think we can deduce that when, from 1932 on, the Democratic Party – with its traditional rhetoric about free trade in the older sense – took over the Republicans’ project of neo-mercantilism and economic empire, it was natural for them to carry it forward under the "free trade" slogan. They were not wedded to tariffs, which, in their view, got in the way of implementing Open Door Empire. Like an 18th-century Spanish Bourbon government, they stood for freer trade within an existing or projected mercantilist system. They would have agreed, as well, with Lord Palmerston, who said in 1841, "It is the business of Government to open and secure the roads of the merchant." British historians John Gallagher and Ronald Robinson have referred to this as "the imperialism of free trade." Quite so, provided we don’t confuse it with the genuine free trade espoused by anti-imperialists such as Cobden and Bright. (You know that the other side has done well in the semantic war when you have to put words like "genuine" in front of formerly uncontested concepts.)

Tell me about it. I ought to have a separate key for "genuine free markets" to save myself time.

According to Oliver MacDonough,* the Palmerstonian precursor to Friedman's neoliberalism was utterly loathed by the Cobdenites. The sort of thing Cobden objected to included the "dispatch of a fleet 'to protect British interests' in Portugal," to the "loan-mongering and debt-collecting operations in which our Government engaged either as principal or agent," and generally, all "intervention on behalf of British creditors overseas" and all forcible opening of foreign markets. Cobden opposed, above all, the confusion of "free trade" with "mere increases of commerce or with the forcible 'opening up' of markets." I suppose this is my cue for a gibe at the Adam Smith Institute. Consider them already gibed at.

*"The Anti-Imperialism of Free Trade," The Economic History Review (Second Series) 14:3 (1962) .

Monday, June 27, 2005

Stumbling and Mumbling on Contract Feudalism

Chris Dillow observes "that many workers now have more and better capital equipment at home than they do at work." Which

destroys the traditional reason for going out to work; in industrial societies we had to go to factories because that was where the machinery was.

With this reason no longer applying for many of us, one would expect to have seen an explosion in the numbers of people working from home. After all, there are enormous costs to having workplaces separate from our homes; commuting and rent to name but two.

However, teleworking is still rare....

Of course, there are lots of things keeping us working in offices: data-feeds; the desire to see colleagues (so I'm told); a need to get away from the kids; and the vain hope that there might be a meeting that isn't a complete waste of time. But I suspect the main obstacle to the growth of teleworking is not technology but power. Offices (and maybe factories too) exist not because they are technically efficient but because they provide easy ways for the boss class to supervise and control workers.

Chris takes advantage of the opportunity to promote Stephen Marglin's brilliant essay, "What Do Bosses Do?" (which I've attempted to hawk myself--but it's worth recommending again and again).

Local Corporate Welfare: Kelo, TIF Districts, and Cockroach Caucuses

Nick Weininger writes at Catallarchy, concerning the Kelo decision:

The point here seems so well suited to Kevin Carson I’m surprised he hasn’t made it yet: give the State the power to play around with ordinary individuals’ lives and possessions whenever it sees a Greater Public Good to be advanced by so doing, and that power will always be captured by the ruling class; it is too tempting a prize for the Wal-Marts and Donald Trumps of the world not to grasp, and they will be neither public-spirited nor restrained in its use.

Well, speak the devil's name and he appears. Despite the fact that Nick has already made my point for me quite succinctly (and quite well), I'll hold forth on the issue.

By way of disclaimer let me first say: as a Tenth Amendment absolutist, I object in principle to the "incorporation" doctrine of the Fourteenth Amendment being used to apply the Fifth to the states. Therefore, I grudgingly agree with the majority opinion that eminent domain abuse is a matter for state and local governments--not the federal courts.

That being said, I also consider the practice under consideration to be utterly reprehensible. Any and all governments engaged in seizing private land for private economic development are legitimately subject to a necktie party--and the sooner the better.

According to Matt Welch at Reason Hit & Run, the liberal blogosphere is generally favorable to the decision. For example, Matt Yglesias is afraid of throwing the "progressive" baby out with the bathwater:

If the Court had gone the other way, we'd see fewer abusive uses of eminent domain, and also fewer worthwhile economic development schemes. The way they ruled, we'll see more good economic development plans, and also more bad ones.

And Daily Kos figures maybe corporate welfare ain't so bad after all, if all them crazy right-wing libertarian types are agin it:

However, if the Court had ruled differently and NOT allowed local governments to do this, it would have been a disaster for local governments to build for the community (including when the purpose is to help the environment, build affordable housing, create jobs, etc.). It would have sacrificed needed community power at the hands of the sort of property-rights extremism frequently displayed by right-wing libertarian types.

Let there be no mistake: what these goo-goos call "good economic development plans" and "building for the community" amounts, in practice, to corporate welfare. There's a reason that urban real estate interests are a major part of the Democratic money coalition, as Thomas Ferguson pointed out in Golden Rule. Their "progressive" policies for cities, whether called "economic development," "urban renewal," or "revitalization," are in fact nothing but subsidies to what Harvey Molotch called local "Growth Machines." For example, the "liberal" Dianne Feinstein was the Godmother of San Francisco's growth machine; ditto for our one-time soccer grandma Democratic candidate for Congress, Ann Henry. Their policies, plain and simple, are good for urban real estate values.

For example, have you ever seen the aftermath of a typical downtown revitalization project? Every Main Street that I've ever seen "revitalized" is gentrified beyond recognition. The real estate is priced out of the range of most of the old family businesses that used to locate there: the small grocers, shoe repair shops, affordable working class restaurants, etc. Then the street's taken over by banks, yuppie clothing retailers, banks, fern bars, and banks.

Besides outright cofiscation, another means of producing the same result is the so-called "improvement district." When the owners of a majority of the property value in a neighborhood decide to form an improvement district, they can force everybody else there to join and kick in their share of the funds. One such district, in Fayetteville, Ark., resulted in the gentrification of Dickson St. in just the past few years. It was used to bulldoze a couple square blocks of small businesses, some of them there for years, that didn't present the right "atmosphere"--along with a historic creek, which had to be put under ground--and replace them with the Walton Arts Center (yes, those Waltons) and associated parking. The Walm Art center, as Joe Alexander calls it, is a monstrosity. The architecture looks like a bank or a really awful junior high school, or something. If you want to see STOMP or something by Andrew Lloyd Webber, I guess this place will have you happy as a pig in shit.

Before the transformation, the neighborhood several blocks either side of downtown Dickson was inhabited largely by aging hippies and back-to-the-landers who had settled here thirty years ago. The low rents and availability of convenient shopping within walking distance made it an attractive neighborhood for those of modest incomes. Now it's being priced out of the range of such renters.

In another Hit & Run post on Kelo, Julian Sanchez observes:

One thing about the argument over Kelo struck me as a little ironic in the wake of yesterday's decision: The libertarian side of the argument seems to entail that takings are permissible if the government is using the land itself to accomplish a goal, but not if it makes use of private markets to do so. In other words (on this argument) it is a public use if government condemns a strip of land to build a public highway, but not if it auctions the land to a private firm hoping to build a toll road, as many libertarians would presumably prefer.

Well, I guess that's the sort of "privatization" the libertarians at the Adam Smith Institute would prefer. That's what most of their faux "privatization" translates to, in practice. Corporatist collusion between government and nominally "private" firms, the latter operating within a protective framework of rules created in their interest.

The best way to "privatize" roads, as for any other form of government property, is what Rothbard and Hess recommended 35 years ago: treat it as the property of those who are currently homesteading it--i.e., as the cooperative property either of the clientele, or of the labor force operating it. In the case of highways, this would mean treating them as a socially-owned commons, devolving control of them to decentralized federations of local communities. We need to get away from the vulgar libertarian idea that "privatization" means ownership by a conventional corporation, and resurrect the ideas of the commons and of (non-state) social property.

But in making this comparison, at least, Julian helps to strip away the aura of sanctity surrounding the traditional "public" uses of eminent domain. Whether stolen land is given to nominally "public" or "private" entities, the real purpose is the same: corporate welfare for the local Chamber of Commerce. Transportation infrastructure, just as much as the building of a new Wal-Mart on seized private land, is a subsidy to politically connected business interests.

The funding of big infrastructure projects is a central lobbying emphasis of the urban Growth Machines. Actually, I prefer the term Cockroach Caucus, which I borrowed from Michael Bates of Batesline, who has irritated the Tulsa Cockroach Caucus to no end by describing them as "the 'Developers, Chamber, and Establishment' party," and a "cluster of special interests which has been trying to run the City of Tulsa without public input, and preferably without public debate." More recently, he wrote this:

The [Tulsa] World is more than just an observer of the local scene. It is an integral part of the tight social network that has run local politics for as long as anyone can remember. This network... has pursued its own selfish interests under the name of civic progress, with disastrous results for the ordinary citizens of Tulsa and its metropolitan area....

The Cockroach Caucus is most recently infamous for convincing state and local elected officials to pour $47 million in public funds into Great Plains Airlines.... It went bankrupt, leaving local taxpayers liable for millions in loan guarantees. Many leading lights of the Cockroach Caucus, including World Publishing Company, were investors in Great Plains Airlines.

The Cockroach Caucus has wasted tens of millions in public funds on failed economic development strategies...., and has bent and sometimes broken the rules of the land use planning system to favor those with political and financial connections. The same small number of connected insiders circulates from one city authority, board, or commission to another, controlling city policy, but beyond the reach of the democratic process.

Here, in Northwest Arkansas, the Third District Congressman guarantees himself lifelong incumbency by bringing home highway money to serve the interests of Tyson, Wal-Mart and J.B. Hunt. The main north-south corridor through this area, the John Paul Hammershit Expressway (Hwy 540), is named after a retired Third District Congressman--our own counterpart to Alphonse "Senator Pothole" D'Amato. And, as I described in my post on the Cockroach Caucus, our local chapter stooped to some pretty remarkable levels of corruption to railroad the regional airport through local government with no democratic debate on the issue.

But abuse of eminent domain for private development, and infrastructure pork like highway and airport money, aren't the only shenanigans that Cockroach Caucuses get up to.

For example, a big issue in the news around here lately has been the Tax Increment Financing (TIF) district. As Dan Sullivan describes it,

(From School of Cooperative Individualism) Developers petition local taxing jurisdictions to allocate improvement taxes on the additional value they create to the financing of the improvements themselves, or to ancillary improvements that would otherwise have been made by the developer. In effect, the developer is paying taxes to himself.

(From Georgist News) Pittsburgh's new mayor is setting us up with a scandalous number of TIFs, and of the most corrupt variety. And Allegheny County is beginning to do the same, as the corporate elite have something of a stranglehold on the government here.

For example, a new Home Depot is being built, and the entire property tax burden for 20 years is allocated for financing of its construction. Thus, they are paying property taxes to themselves. Naturally, a variety of specialty hardware shops in the area are furious; they've been paying the city's higher mercantile taxes for years and now the city is using those revenues to subsidize a corporate giant that will put them out of business.

Well, isn't that a sweet deal? Make use of the subsidized public services everybody else's tax money is paying for, while you get to plow all your own tax money back into your own business!

Sunday, June 26, 2005

Carnival of the Un-Capitalists

This week's host is Impasto. And despite this being the thirteenth edition, and all, I think it turned out mighty well.

Friday, June 24, 2005

On the Irrationality of Large Organizations

The following ramble is based on my general lines of research for a forthcoming work on the anarchist theory of organizational behavior. Some of the same general themes were touched on, briefly, in the section on Fiscal and Input Crises in Chapter Eight of Studies in Mutualist Political Economy.

Mises, in Human Action, explained that the functionaries within planned economies could make even tangentially rational decisions about the value of factors and intermediate goods, only through implicit pricing: they relied on the market prices of goods in the pre-state socialist economy, or in countries in the outside world, as an imperfect reference point for their own valuation. But the further removed the reference point, in time or space, the less relevant it was as a guide to the real values of things immediately within the purview of the planner, and the more imperfect as a basis for valuation within the planned economy. Rothbard, in Man Economy and State, developed the idea further. The valuation problem did not stem from state versus private ownership, as such, but from the fact that there was only one owner. For that reason, a fully vertically integrated firm, or a single private cartel that owned the entire economy, would fall victim to the very same rational calculation problem as a centrally planned state socialist economy. The more steps in the production chain that are integrated vertically into one firm, the more the market price system is replaced by internal administration. But even the management of a vertically integrated corporation must have reference to implicit prices, based on market prices outside the corporation--just like the planners of a state-owned economy. And the larger the corporation, the larger the island of planning; and consequently, the further the planners are removed from explicit market prices and the more imperfect an approximation those market prices are to the actual valuation of goods within the firm. The larger the firm, the more it took on the internal characteristics of a planned economy and was subject to the calculation problem.

So the rational calculation problem isn't a purely qualitative threshold. It's a quantitative relationship that applies to all organizations, and increases with size. That isn't a problem in the free market, Rothbard argued, because the market sets maximum limits to feasible size. The firm will be unable to grow beyond the point at which increased economies of scale cease to offset the increased internal difficulties resulting from the calculation problem.

But we don't live in a free market. We live in a state capitalist economy where the state has cartelized most industries: by anti-competitive regulations; by subsidies to operating costs that render corporations artificially profitable at sizes far above maximum economy of scale; and by subsidies to capital- and skill- and R&D-intensiveness that artificially increase the minimum feasible size and otherwise raise entry barriers. We live in an economy, in short, where the average corporation has all the internal inefficiencies and irrationalities of a planned economy--but is able to survive because the taxpayers foot the bill for so many of the diseconomies of scale.

And the calculation of value is not the only problem besetting such large organizations. Another is the distortion of information flow within large organizations, described brilliantly by R.A. Wilson.

….in a rigid hierarchy, nobody questions orders that seem to come from above, and those at the very top are so isolated from the actual work situation that they never see what is going on below....

He described it as the "burden of nescience" confronting the "burden of omniscience":

Every authoritarian logogram divides society, as it divides the individual, into alienated halves. Those at the bottom suffer what I shall call the burden of nescience. The natural sensory activity of the biogram--what the person sees, hears, smells, tastes, feels...--is always irrelevant and immaterial. The authoritarian logogram, not the field of sensed experience, determines what is relevant and material…. The person acts, not on personal experience and the evaluations of the nervous system, but on the orders from above….

Those at the top of the authoritarian pyramid, however, suffer an equal and opposite burden of omniscience…. They must attempt to do the seeing, hearing, smelling, tasting, feeling and decision-making for the whole society.

But a man with a gun is told only that which people assume will not provoke him to pull the trigger. Since all authority and government are based on force, the master class, with its burden of omniscience, faces the servile class, with its burden of nescience, precisely as a highwayman faces his victim. Communication is possible only between equals. The master class never abstracts enough information from the servile class to know what is actually going on in the world where the actual productivity of society occurs…. The result can only be progressive disorientation among the rulers.

Or as Kenneth Boulding put it, large organizations tend to create false images in the minds of decision-makers, with those at the top of the hierarchy living in completely imaginary worlds.

Because of the cartelizing policies described above, because the cartelized sector is able to pass its taxes on to the consumer (those it actually pays, after disproportionate tax breaks to the largest and most capital-intensive firms), and because the competitive sector is taxed to subsidize the monopoly sector, the state capitalist "commanding heights" tend to crowd out all competing forms of bottom-up organization. As Paul Goodman described it in People or Personnel, even non-profits and cooperatives are infected with the pathologies of corporate-bureaucratic organizational culture: status-salared "professional" management, high overhead, mission statements, etc. This hegemonic form preempts all other models of bottom-up organization:

[The] genius of our centralized bureaucracies has been..., as they interlock, to form a mutually accrediting establishment of decision-makers, with common interests and a common style....

In brief, ...the inevitability of centralism will be self-proving. A system destroys its competitors by pre-empting the means and channels, and then proves that it is the only conceivable mode of operating.

The irrationality of large organizations stems from the fact that, for any human being to make optimally efficient decisions, he must internalize all the positive and negative effects of his decisions. In a large hierarchy, the consequences of the irrational and misinformed decisions of the parasites at the top are borne by the people at the bottom who are actually doing the work. And the actual producers, who know what's going on and experience the consequences of decisions made by others, have no direct control over the decision-making. The typical large organization, in fact, is so large that the transaction costs of tracking the positive and negative consequences of a decision and aggregating the data for the relevant decision maker are greater than the potential savings from any decision.

As a result, the organization must replace what Goodman called "intrinsic motivation" (direct experience of the consequences of one's actions, or gratification by the nature of the work itself) with "extrinsic motivation" (administrative incentives and penalties):

In my opinion, the salient cause of ineptitude in promotion and in all hiring practices is that, under centralized conditions, fewer and fewer know what is a good job of work. The appearance of competence may count for more than the reality, and it is a lifework to manufacture appearance or, more usually, to adapt to the common expectation. Just as there is reliance on extrinsic motives, there is heavy reliance on extrinsic earmarks of competence: testing, profiles, publications, hearsay among wives, flashy curricula vitae. Yet there is no alternative method of selection. In decentralized conditions, where a man knows what goes on and engages in the whole enterprise, an applicant can present a masterpiece for examination and he has functional peers who can decide whether they want him in the guild....

....What swells the costs in enterprises carried on in the interlocking centralized systems of society, whether commercial, official, or non-profit institutional, are all the factors of organization, procedure, and motivation that are not directly determined to the function and to the desire to perform it....

But when enterprises can be carried on autonomously by professionals, artists, and workmen intrinsically committed to the job, there are economies all along the line. People make do on means. They spend on value, not convention. They flexibly improvise procedures as opportunity presents and they step in in emergencies. They do not watch the clock. The available skills of each person are put to use. They eschew status and in a pinch accept subsistence wages. Administration and overhead are ad hoc. The task is likely to be seen in its essence rather than abstractly.

Ursula Leguin might have been thinking of Goodman's intrinsic and extrinsic motivation when writing this passage in The Dispossessed:

Atro had once explained to him how this was managed, how the sergeants could give the privates orders, how the lieutenants could give the privates and the sergeants orders, how the captains... and so on and so on up to the generals, who could give everyone else orders and need take them from none, except the commander in chief. Shevek had listened with incredulous disgust. "You call that organization?" he had inquired. "You even call it discipline? But it is neither. It is a coercive mechanism of extraordinary inefficiency--a kind of seventh-millennium steam engine! With such a rigid and fragile structure what could be done that was worth doing?" This had given Atro a chance to argue the worth of warfare as the breeder of courage and manliness and weeder-out of the unfit, but the very line of his argument had forced him to concede the effectiveness of guerrillas, organized from below, self-disciplined. "But that only works when the people think they're fighting for something of their own--you know, their homes, or some notion or other," the old man had said. Shevek had dropped the argument. He now continued it.... He explained to Atro that he now understood why the Army was organized as it was. It was indeed quite necessary. No rational form of organization would serve the purpose. He simply had not understood that the purpose was to enable men with machine guns to kill unarmed men and women easily and in great quantities when told to do so.

When the people doing the productive labor of the organization own it, identify with its goals, and internalize all the consequences of their decisions, it can be organized rationally on bottom-up principles. Under such circumstances, the productivity of labor skyrockets--just check out the results of worker self-management in Spain, described by Sam Dolgoff in The Anarchist Collectives. And the productive process will often be improved in all sorts of ingenious ways. The main source of productivity-enhancing innovation is not (despite what Schumpeter and Galbraith claimed) the "technostructure" or the R&D department of a giant corporation. As Barry Stein observed in Size, Efficiency, and Community Enterprise, most enhancements to productivity come from small changes to the process, or incremental improvements to the machinery, that are best identified by those engaged directly in the production process. And when they have the ability to make such changes directly, on their own authority, instead of submitting them to a "suggestion box" to be digested by six echelons of committees, the result is breathtaking flexibility and innovation. The producers' co-op is made to order for producing such an effect.

Unfortunately, such an organization is incompatible with milking workers of surplus product. Given a goal that has no intrinsic meaning to the people serving it, the organization must adopt exploitative methods. Leguin was right: under these circumstances, an authoritarian, top-down institution, based on command and central planning, is the only thing that will answer to the job.

Thursday, June 23, 2005

Quotations from Chairman Sam

In another contribution to Thomas Knapp's seminar on the Wally Conger quotes a statement by Sam Konkin (SEK3) and himself on the Movement of the Libertarian Left. It's worth reading in full, but these two paragraphs stand out for me:

In the medium-range, we should build a New Libertarian Alliance (Revolutionary Agorist Cadre) of defenders of the Counter-Economy (the underground free market, aka “grey” and “black” market). The State “withers away” as each individual secedes from the statist society and goes counter-economic.

In the long-range, the Counter-Economy will overwhelm State Capitalism and State Socialism to produce a society based on voluntary interaction with a minimal amount of self-defense needed, which can be handled by ordinary market facilities. This society of free trade in goods and values is the agora.

Here's another gem I culled from the archives of the LeftLibertarian yahoogroup. It's SEK3's brief account of the rise of the MLL:

...we take our name from the synthesis of two sources. Murray Rothbard defined himself as the "sane, sober, anarchist center" during the rise of the Libertarian Movement (1968-1973, well before the LP), and those who opposed his "plumb line" did so from the Right (conservative, minarchist, less anti-statist, less historical-revisionist, etc.) or the Left (radical, anarchist, more anti-statist, more anti-power- elite, etc.).

It's certainly true that the Libertarian Left tended to (and still does) prefer Rothbard's alliances with SDS (1965-69) than, say, the paleoconservatives (1989-95), but in both cases, we prefer Left AND Right against the totally-statist, utterly unredeemable, political (archist) Center.

And we're all free-market here. Agorists believe only the Counter-Economy has a chance of approaching a pure free market, from the "underground" or beyond the frontier. I debated this with Murray Rothbard after the publication of New Libertarian Manifesto and his criticism (and my defence) of it in the 1980s. A few copies are still available.

During the formation of the LP in 1972-74, we were involved in re-organizing the Student Libertarian Action Movement (SLAM), mainly in New York and Arizona.But we decided to confront the Free Libertarian Party (in New York, they couldn't just call it the "Libertarian" Party because the courts ruled the mindless rednecks of New York City would confuse it with the "Liberal" Party --- two oxymorons right there) and see if we could abort it from within.

The original Radical Caucus, for which I take responsibility, began when the outgoing Chair (Ed Clark) and incoming Chair (Jerry Klasman) invited me to join, not only the FLP, but the Executive Council. I told them I would work to destroy the Party, they accepted on those terms, and I did.

At its peak, the FLPrc claimed about a quarter of the membership, and through alliances with Reform minarchists from upstate, had a majority by the time of the 1974 convention. I then walked out to prevent that happening, and the Convention went into chaos, with different sides winning different offices and points. Murray Rothbard, in exasperation, pointed to me sitting outside the meeting hall at my New Libertarian magazine table, and called out, "Is he the only one who understands what is going on?"

Our RC members had already gained delegate status for the national convention in Dallas (we had first appeared in Cleveland the previous year and started national recruiting). Again, we allied with Reform minarchists (like E. Scott Royce, who writes an excellent political column for NL to this day) and claimed about a third of the vote. Then we walked out for good, forming the New Libertarian Alliance (NLA).

There's a lot more, including the purging of eight state newsletter editors by the LP's own Stalin, Ed Crane, for so much as mentioning our existence, but I"ll skip ahead. In 1978, it looked like the U.S. was going to start another "Viet Nam" in El Salvador and the NLA divided over whether to participate in above-ground coalitions to stop the war. Most went underground; I started The Agorist Institute to defend counter- economists (we actually got IRS recognition in 1986) and, for anti-imperialist coalitions, the Movement of the Libertarian Left.

The second source (remember, I mentioned two sources a few paragraphs back) was due to my observations of the Euro political scene. Communism was swinging right and forming parliamentary coalitions. In France, a Union of the Left (Union de Gauche) formed to challenge the Gaullists and Independent Republicans. It consisted of the Communists, Socialists, and the Mouvement des Radicaux de Gauche (MRG) or "movement of left radicals", which had split from the Radical Party that allied itself with the Gaullists and Centrists. Although the MRG were parliamentary, and the RC (SLAM-NLA) are anti-parliamentary, the "Movement" name sounded perfect to distinguish us from the "libertarian" Party.

So we became the Mouvement des Libertariens de Gauche/Movement of the Libertarian Left (MLL)....

We promptly joined both the anti-nuclear coalition and the CISPES-led U.S. Out of El Salvador groups.

We refused to support either the Sandinistas or the Contras in Nicaragua, but did come out for the Terceristas and its Commander Zero, Eden Pastora. He returned the favour in 1994 by speaking to the Karl Hess Club, an MLL front if anyone still was wondering, and announcing his candidacy for president of Nicaragua, running against both sides, with a ringing endorsement of . . . Thomas Jefferson.

So I guess you can say... that two Left Libertarians are Eden Pastora and Thomas Jefferson. Actually, they sort of define our "far right wing" in that they still muck about with voting and elections. On our other side, I would include anagoric (non-market) anarchists who willingly work with us, such as Noam Chomsky, Alexander Cockburn (who I take some credit for recruiting), Ursula K. LeGuin and Michael Moorcock (at least while he was still an anarchist.)

We received a strongly positive portrayal in old SDSer James Weinstein's "In These Times" around 1988, in the same article that trashed the LP. Yeah!

Individualist Anarchists in the First International, Etc.

Well, Shawn Wilbur's blog is living up to his reputation. In his second post, he's already got an excellent piece of historical analysis on the confusion of tongues within the International Workingmens' Association:

...the more individualistic and market-friendly early forms of anarchism pose all sorts of problems for contemporary anarchist ideologies - both right and left. Engaging with them takes us back to a time before the marxian coup in the First International remapped the political terrain, when socialism still meant little more than simultaneous concerns with social science and social justice. It's hard to grasp the diversity of that International. Beyond the familiar assortment of folks from the labor movement, the cooperatives, Proudhonists, Marxists, Bakuninists and such, Stephen Pearl Andrews and the Woodhull sisters were part of an American section grounded in part in Andrews' pantarchy and universology. William Batchelder Greene, the "American Proudhon," was a member of a French-speaking Boston chapter which understood the work of the International as a continuation of that of the Knights Templar. Cabet's Icarians were represented as well. You can imagine Marx tearing out his hair, wondering how he could get rid of half this crew. He worked it out eventually, of course, expelling the American English-speaking sections before he and Bakunin had a chance to duke it out. And while he was at it, Andrews and Greene continued to translate and disseminate Marx and Engels' Manifesto.

I'll be honest. The strange, promiscuous character of that First International fascinates me. All of the work that i've been doing on the history of anarchism and mutualism is aimed at getting a glimpse of some of the roads not travelled from that point to the present. It's tempting to say that the breakup of the International was a sort of Tower of Babel incident for the broad socialist movement. Certainly, some form of common language was lost, as it rapidly became almost impossible to speak of a broad socialist movement - and largely remains so today. But the incident is also, and perhaps more compellingly, a sort of Babel-in-reverse. First, there was a clamor of voices, but there was also this fragile joint project, the International. And then there was a different sort of clamor, but not within the joint project, which had become rather narrow and German.... There's still a lot of historical spadework to be done to flesh out the genealogies of the various current anarchistic and socialistic currents, but there's also the very difficult job of trying to grasp the character of the International in that earlier moment.

I guess i'm happy to call myself a mutualist because it positions me within a story that must reach back before marxian takeover - to the extent that it's possible to do so. Mutualism, for me, is necessarily identified with the sort of chaos-in-concert that seems to have characterized that early, broad socialism.

The contrast to that "early, broad socialism" is especially jarring, to someone living in the aftermath of the state socialist ascendancy. Engels had reached the point in Anti-Duhring of envisioning a transition to "socialism" consisting of the workers' state expropriating the One Big Trust, with the state replacing the board of directors as the final authority from which the professional managers took orders (with production being run on the basis of strict one-man management, of course--no room for any of that left-wing infantilist nonsense). It's no wonder that Mises, by the time he got around to writing on the calculation problem, could matter-of-factly define "socialism" as state ownership and planning of the economy. It's hard to believe that the very term was coined by an Owenite cooperative magazine; or that there was a time when Proudhon identified it with free exchange between producers' associations, and Tucker with "consistent Manchesterism"; and even Marx could write of a society run by the "associated producers."

In the process of his post, Shawn includes this statement of mutualist angst, which resonates powerfully with me.

There was a time, not all that long ago when mutualist was a term used very little among the generally left-anarchist company i was keeping. It struck me as a term used to keep folks like Proudhon carefully suspended about half in and half out of "proper anarchism." It was also a nice way to say "individualist anarchism" without starting quite as many fights. There still aren't very many of us who call ourselves mutualists, but at least now when we do so we only have to explain why we're not automatically enemies of anarchism about half the time. Let's hear it for progress.

Testify! Mutualism/individualism being such a neither-fish-nor-fowl kind of thing, I find myself often reminded of its fringe status in both the free market and libertarian socialist movements. In the mainstream of both movements, the majority response I encounter ranges from

1) grudging tolerance toward a wayward comrade (one of me is OK, provided I'm willing to write off those other commies/capitalists as beyond the pale); to

2) shrieking and finger-pointing, like a pod person in Body Snatchers (He's not really one of us! He's a commie/capitalist cuckoo in the libertarian/anarchist nest!). I kid you not--I've been called an "Ayn Rand-worshipping Nazi" in social anarchist venues for advocating laissez-faire, and a "commie" in right-wing libertarian ones for saying nasty things about landlords.

Wednesday, June 22, 2005

What is Counter-Economics?

As part of the ongoing symposium on the , Wally Conger answers Vache Folle's question with a quote from Sam Konkin's New Libertarian Manifesto:

The function of the pseudo-science of Establishment economics, even more than making predictions (like the Imperial Roman augurers) for the ruling class, is to mystify and confuse the ruled class as to where their wealth is going and how it is taken. An explanation of how people keep their wealth and property from the State is then Counter-Establishment economics, or Counter-Economics for short. The actual practice of human actions that evade, avoid and defy the State is counter-economic activity....

Wally adds:

In short, a peaceful black market or underground economy is an example of counter-economics in practice.

I suggest that free market counter-economics, as a form of praxis, can benefit greatly from the venerable anarchist tradition of "alternative social institutions" or "social counter-power." A good summary of this can be found in the section of the Anarchist FAQ: "J5. What alternative social organizations do anarchists create?" It includes sections on rank and file-controlled labor unions, mutual banks and LETS, cooperatives, alternative schools, and mutual aid associations. This article by Brian Dominick on "dual power" strategy is also a good one. I also recommend Karl Hess' Community Technology for lots of examples of decentralized, bottom-up technology in action; if you want lots more of that sort of things, check out the Intermediate Technology Development Group and the utterly mind-blowing Appropriate Technology Sourcebook.

I attempted myself, in a post last March, to deal with the way these various forms of practice might dovetail together in creating an alternative economy--with the intention of gradually supplanting the state capitalist economy. The title, "Building the Structure of the New Society Within the Shell of the Old," comes from a Wobbly slogan; but the concept is a central one to most strains of the anarchist tradition.

Tuesday, June 21, 2005

Shawn Wilbur Blogs

Great news! Shawn Wilbur, proprietor of Libertarian Labyrinth (an individualist anarchist historical site), has joined the free market anti-capitalist blogosphere (that's my characterization, not his). He has two blogs up and running: Libertatia Lab Reports and In the Libertarian Labyrinth. The latter of them, by his own description, contains the "more focused" material.

This guy has forgotten more minutiae of American individualist anarchist history, and the myriad strains of petty bourgeois decentralism that have grown out of it, than I ever learned. I mean, stuff about Stephen Pearl Andrews that didn't even make it into James Martin's footnotes--and Bolton Hall, Ralph Borsodi, Mildred Loomis, and yada yada yada, out the wazoo. So he's starting out with some high expectations to live up to.

Rothbard Article Online; the Rothbardian Left Continues

Thanks to Mises.Org, Murray Rothbard's classic "Confessions of a Right-Wing Liberal" is now online--for the first time, so far as I know.

It first appeared in the New Left journal Ramparts in 1968, during Rothbard's attempted strategic coalition between Old Right and New Left. The fruits of that coalition can be seen in, among other things: Rothbard's writing for Ramparts; his own periodical Left and Right; his collaboration with New Leftist Ron Radosh in editing A New History of Leviathan (a critique of 20th century corporate liberalism); his contributions to the James Weinstein/William Appleman Williams project Studies on the Left; the joint foundation of the Libertarian movement in the July Days of St. Louis, by free market dissidents from the YAF and anarchist walkouts from SDS; and some excellent writing by Rothbard and Karl Hess in the first year of The Libertarian Forum. It's also reflected in Hess' excellent Community Technology, Neighborhood Government (coauthored with David Morris) and his "Plowboy Interview" with Mother Earth News.

One great irony of this Old Right/New Left collaboration is that so many of the New Leftists involved in it went on to become neocons--and, seemingly, mortally ashamed of their Old Right ties. As Stromberg comments,

To mention Rothbard is to bring to mind the lost weekend Radosh spent as an near-ally of right-libertarian anti-imperialists in the mid sixties. Bob Dylan appears in this book, but Rothbard and his associates do not. Yet Radosh wrote on FDR’s foreign policy for Rothbard’s Left and Right (3, 3 [Spring-Autumn 1967]), edited a book with Rothbard, A New History of Leviathan (New York: E. P. Dutton, 1972), on the rise of US corporatism and empire (to which Williams contributed), and wrote a thoughtful and friendly survey of right-wing "isolationists," Prophets on the Right (New York: Simon & Schuster, 1975), with chapters on Charles Beard, Oswald Garrison Villard, Robert Taft, John T. Flynn, and Lawrence Dennis.

Of this political lost weekend there is not a trace in this memoir. Could it be that the politically shipwrecked Radosh, having washed ashore near the New Republic, Al Shanker, and the Olin Foundation, is more ashamed of once consorting with right-wing libertarians than of having been a Stalinist?

Stromberg refers to Radosh's neocon conversion, bitingly, as a return to the corporate center. Jesse Walker notes, similarly,

Yet Radosh’s first friendly contacts with the right did not come in the ’80s or ’90s. They came in the ’60s, when the group around the journal Studies on the Left, which included Radosh, pioneered the idea of "corporate liberalism." This was the notion that, as Radosh puts it here, "the dominant worldview of American political leaders was not one of laissez faire, but rather a managerial form of liberalism." In its "cruder form," Radosh continues, the theory "was used to argue that in the United States, the true enemy of the left was not the ‘reactionaries,’ i.e. old-style Republicans and conservatives, but rather the liberals who comprised what they liked to call the ‘vital center.’"

This stance allowed a certain measure of cooperation between the Studies leftists and Murray Rothbard’s circle of isolationist libertarians. Rothbard contributed to Studies on the Left, and in 1967, Radosh in turn contributed to Rothbard’s Left and Right. In 1972, the two co-edited A New History of Leviathan, with contributions from both sides of the anti-liberal aisle; three years later, Radosh published Prophets on the Right, a sympathetic study of the conservative critics of American imperialism.

Virtually all of this is missing from Commies. Perhaps Radosh felt he did not know enough gossip about the libertarians to include them. More likely, it would have unduly complicated his conversion narrative to acknowledge the existence of anti-imperialists outside the left.

As somebody once suggested on a discussion list, Ron Radosh seems to have had more respect for the Old Right back when he was a commie than he does today as a neoconservative.

Here's Rothbard's commentary on his own use of New Left historical analysis, one of the best parts of the article:

Our analysis was greatly bolstered by our becoming familiar with the new and exciting group of historians who studied under University of Wisconsin historian William Appleman Williams. From them we discovered that all of us free marketeers had erred in believing that somehow, down deep, Big Businessmen were really in favor of laissez-faire, and that their deviations from it, obviously clear and notorious in recent years, were either "sellouts" of principle to expediency or the result of astute maneuverings by liberal intellectuals.

This is the general view on the right; in the remarkable phrase of Ayn Rand, Big Business is "America's most persecuted minority." Persecuted minority, indeed! Sure, there were thrusts against Big Business in the old McCormick Chicago Tribune and in the writings of Albert Jay Nock; but it took the Williams-Kolko analysis to portray the true anatomy and physiology of the American scene.

As Kolko pointed out, all the various measures of federal regulation and welfare statism that left and right alike have always believed to be mass movements against Big Business are not only now backed to the hilt by Big Business, but were originated by it for the very purpose of shifting from a free market to a cartelized economy that would benefit it. Imperialistic foreign policy and the permanent garrison state originated in the Big Business drive for foreign investments and for war contracts at home.

The role of the liberal intellectuals is to serve as "corporate liberals," weavers of sophisticated apologias to inform the masses that the heads of the American corporate state are ruling on behalf of the "common good" and the "general welfare"—like the priest in the Oriental despotism who convinced the masses that their emperor was all-wise and divine.

There's been a flurry of writing lately within the Left-Rothbardian blogosphere on Rothbard's abortive New Left project, provoked in part by this latest posting by the Mises Institute. For example, Wally Conger writes:

The once “conservative Republican” Rothbard exhorted libertarians to recognize their past and ally themselves with the New Left, from which had sprung the anarchistic, anti-imperialist “Port Huron Statement.” He and other libertarians shared podiums with Leftists like Paul Goodman and Carl Oglesby. At the end of the ’60s, many libertarians — most of them, like me, student members of the Young Americans for Freedom — followed Rothbard and former Goldwater speechwriter Karl Hess out of the right wing to build coalitions with the Left. An exchange of interesting strategic and tactical ideas ensued, but the fusion didn’t hold ultimately.

Rothbard himself abandoned the idea, gravitating later toward the position now identified with the paleos at LewRockwell.Com. But Samuel Edward Konkin (SEK3) dedicated himself, until his recent death, to a Rothbardian/New Left alliance. Wally Conger again:

The Movement of the Libertarian Left (MLL) worked to lay the groundwork for a day of reconciliation with the Left from 1978 until Sam’s sudden death last year. And they made inroads. MLL had this goal: to develop a coherent, long-term, non-political, anti-party strategy consistent with hard-core Rothbardian theory. Sam and other New Libertarians (aka Libertarian Leftists) interacted regularly with New Leftists like Alexander Cockburn, Christopher Hitchens, Carl Oglesby, Jon Rappoport, and Noam Chomsky.

And, as Wally reminds us, Sam's elist, LeftLibertarian, is still going as strong as ever. His New Libertarian Manifesto is also available online, thanks to Black Crayon.

Tom Knapp, meanwhile, kicks off a symposium aimed at building on, extending, and applying Konkin's Left-Rothbardian thought as the basis of an ongoing agorist movement. If you want to participate, by writing a blogpost relevant to this theme, just check technorati tags under "movement of the libertarian left," and paste in the code (like this):

Finally, while we're on the subject of free market radicals collaborating with New Left types.... Larry Gambone of Porcupine Blog has called attention to the new network that's been set up, Independent World Television:

Independent World Television is building the world’s first global independent news network. Online and on TV, IWTnews will deliver independent news and real debate from professional and citizen journalists -– without funding from governments, corporations or commercial advertising. Using the web to organize and raise funds across borders, IWTnews is building an international movement for democracy.

It is, as Larry says, a "left-leaning" network intended to compete with Fox News. And it's organized as a non-profit. What's really tantalizing, as he informed the mutualist yahoogroup recently, is that its board, along with New Lefties like Howard Zinn, includes a representative of the free market Independent Institute. Now that's the kind of ideological cross-pollination we need to see more of.

Monday, June 20, 2005

James Weinstein, RIP

Via Doug Ireland. Weinstein (1926-2005), who broke with the CPUSA over Hungary in 1956, was one of a handful of seminal thinkers who contributed to the New Left historiography of the 1960s. He was a leading figure in the "corporate liberal" analysis of 20th century state capitalism: it was reflected, among other things in his book The Corporate Ideal in the Liberal State, and in Studies on the Left (whose editorial board also included fellow U. of Wisconsin radical William Appleman Williams). The best articles from Studies on the Left were compiled under the title For a New America.

Weinstein went on to edit, in his later years, the often excellent In These Times.

The corporate liberal school had a major influence on Rothbard and the Rothbardian Left; Rothbard himself contributed to Studies on the Left, I believe. One great example of this Old Right/New Left anti-state capitalist fusion was the book A New History of Leviathan, coedited by Rothbard and New Leftist Ron Radosh (which I can't believe Amazon doesn't have listed).

Glenn Reynolds' Upside-Down Version of History

Or Reynolds joins Monbiot in the ass-backward club (via Peter M. Lawrence):

But the Industrial Revolution changed things. Improvements in organization, communications, and machinery meant that it was often much more efficient to do things on a large scale than on a small one. Adam Smith noted this in his famous description of a pin factory in The Wealth of Nations.

Some economies of scale do exist. But in most forms of production, they level off at a relatively modest level (far smaller than the average plant size, let alone firm size, in most industries). After that, the diseconomies of large scale (multiple layers of bureaucracy and the transaction costs of internal control) begin to offset productive efficiency. And even before economy of scale peaks out, in terms of unit cost of production, it is offset in many cases by increased distribution costs. (See Adams and Brock, The Bigness Complex; and Stein, Size, Efficiency, and Community Enterprise.)

In the economics section of Human Scale, Kirkpatrick Sale describes a decentralized economy of small-scale production for local use. It would likely rely on small factories using multi-purpose production facilities that could switch from one production run to another with a minimum of retooling. There would be more creative use of available local materials, more emphasis on repair, reuse and recycling, and a lot less planned obsolescence. And in the rigorious competition and cost-internalization that would exist without the protections of a cartelized oligopoly market, it's unlikely that costly things like annual model changes and cosmetic product differentiation would survive very long. But in terms of both unit cost and man-hours, it would likely be more efficient than the present economy. My own off-the-cuff guess is that, in such an economy, the average worker could produce his current standard of living in about 20 hours a week.

What large organizations are really more efficient at is control. The giant corporation is much better than a cottage producer at obtaining subsidies from the state, externalizing its operating costs on the taxpayer, and lobbying for regulations to cartelize the industry. It's much better at strong-arming its suppliers and outlets. This latter is sometimes called "market power," but that's a misnomer. If size were the legitimate outcome of superior effectiveness in the free market, it would be accurate to call this "market power" and say it was a well-earned payoff from past performance. But when the large size results from government cartelization, government subsidies to the inefficiency costs of large-scale organization, and government subsidies to accumulation, R&D and technical training that promote large size and capital-intensiveness, and thus artificially raise market entry barriers--why, in that case, such "market power" is just another form of ill-gotten gain.

And one of the forms of control that the factory organization is most efficient at is the control of productive labor. Take Adam Smith's example of the pin factory, that Reynolds makes so much of. As Stephen Marglin pointed out in "What Do Bosses Do?", most of the efficiencies achieved by division of labor in the pin factory could be achieved almost as well by one cottage worker dividing and then sequencing the sub-tasks: first drawing out and straightening all the wire, then cutting it, then sharpening it, etc. The important thing is not so much division of labor, as division of tasks to minimize startup and switchover time.

But in a cottage industry, the pin-maker can decide when to stop and start work. He can decide when to step outside and smoke a pipe. He can decide how much money he needs to subsist on, and adjust his work schedule accordingly. If any surplus value is extracted from his labor, it can only be done indirectly through the cost he pays for raw materials or the premium he pays to a wholesaler to dispose of his product. (And it doesn't take too much imagination to envision a society in which the pin-makers themselves are organized cooperatively to buy raw materials and market their product. The main obstacle to it is political--it's hard to imagine the Whig oligarchy having much patience for that sort of thing in Hannoverian Britain.)

What a factory is much more efficient at is forcing the laborer to work on someone else's schedule, and fleecing him of his entire product minus what he needs to subsist on. There's a large body of literature, by radical industrial historians, on the theme of social control as a motivating factor in the choice among alternative forms of production technology. The pioneers of "deskilling" as a central aim of the production process, of course, were Andrew Ure and Frederick Taylor. But the pioneer critical analysis of it was Harry Braverman's Labor and Monopoly Capital, followed in quick succession by William Lazonick, David Montgomery, and David Noble. Institutional economists like David M. Gordon also do a lot of good work on internal authoritarianism as a corporate response to stagnant real wages, speedups, and an increasingly disgruntled work force.

In the process of his larger argument, Reynolds just can't avoid repeating the vulgar libertarian "better than the alternative" apology for sweatshops:

William Blake's "Dark Satanic mills" weren't as bad as they're remembered today -- if they had been, people wouldn't have flocked to them. Or maybe it's fairer to say that, bad as they were, they were still better than life as a subsistence farmer. But they were very, very different.

I just don't have the heart even to paste in my past responses to this lame "argument," so if you're interested please just click the link.

The one thing I'd add to what I've already written on the subject is that the ruling class literature of the period is chock full of complaints about just how hard it was to get workers into the factories: not only were the lower classes not flocking into the factories of their own free will, but the owning classes used a great deal of energy thinking up ways to force them to do so.

Although the kind of thing I'm saying is denounced as "Marxist class warfare" these days, the land-owning and employing classes of early industrial Britain said the same thing in very nearly the same words, in a pretty frank "we're all men here" style. The cottager with independent access to a piece of land, it was complained, would only work a few days a week to supplement his income, and perhaps even then only work seasonally when he needed an extra stake of money to pay taxes or buy some luxury item. The periodical press resounds with demands for enclosure, the reduction of land available for household gardens, and forcible restriction of independent access to the means of subsistence so that the working population would have no choice but to work in the factories or as agricultural wage-laborers for whatever hours a master saw fit to demand of them.

For example, here are some excerpts from contemporary writings, culled from E.P. Thompson, Christopher Hill, and dat ol' debbil Karl Marx. I'm too lazy to paste in the citation data for each one, but you can find them all in Chapter Four of Studies in Mutualist Political Economy:

...to lay them [the poor] under the necessity of labouring all the time they can spare from rest and sleep, in order to procure the common necessities of life.

That mankind in general, are naturally inclined to ease and indolence, we fatally experience to be true, from the conduct of our manufacturing populace, who do not labour, upon an average, above four days in a week, unless provisions happen to be very dear.... I hope I have said enough to make it appear that the moderate labour of six days in a week is no slavery.... But our populace have adopted a notion, that as Englishmen they enjoy a birthright privilege of being more free and independent than in any country in Europe. Now this idea, as far as it may affect the bravery of our troops, may be of some use; but the less the manufacturing poor have of it, certainly the better for themselves and for the State. The labouring people should never think themselves independent of their superiors.... It is extremely dangerous to encourage mobs in a commercial state like ours, where, perhaps, seven parts out of eight of the whole, are people with little or no property. The cure will not be perfect, till our manufacturing poor are contented to labour six days for the same sum which they now earn in four days.

Every one but an idiot knows that the lower classes must be kept poor, or they will never be industrious.

...the use of common land by labourers operates upon the mind as a sort of independence.

[leaving the laborer] possessed of more land than his family can cultivate in the evenings [meant that] the farmer can no longer depend on him for constant work.

Legal constraint to labour is attended with too much trouble, violence, and noise, creates ill will etc., whereas hunger is not only a peaceable, silent, unremitted pressure, but, as the most natural motive to industry and labour, it calls forth the most powerful exertions....

It seems to be a law of nature that the poor should be to a certain degree improvident, that there may be always some to fulfill the most servile, the most sordid, and the most ignoble offices in the community. The stock of human happiness is thereby much increased. The more delicate ones are thereby freed from drudgery, and can pursue higher callings etc. undisturbed.

[among] the greatest of evils to agriculture would be to place the labourer in a state of independence.

Farmers, like manufacturers, require constant labourers--men who have no other means of support than their daily labour, men whom they can depend on.

[Enclosure would force laborers] to work every day in the year. [Children would] be put out to labour early [and the] subordination of the lower ranks of society... would be thereby considerably secured.

Indeed, for an honest statement of the problem, we need look no further than Mandeville's Fable of the Bees, so beloved of vulgar libertarians:

It would be easier, where property is well secured, to live without money than without poor; for who would do the work? ....As they ought to be kept from starving, so they should receive nothing worth saving. If here and there one of the lowest class by uncommon industry, and pinching his belly, lifts himself above the condition he was brought up in, nobody ought to hinder him; ...but it is the interest of all rich nations, that the greatest part of the poor should almost never be idle, and yet continually spend what they get.... Those that get their living by their daily labour... have nothing to stir them up to be serviceable but their wants which it is prudence to relieve, but folly to cure.... To make the society happy and people easier under the meanest circumstances, it is requisite that great numbers of them should be ignorant as well as poor....

By the way.... Despite attempts by Mises and others to rehabilitate the early industrialists as small craftsmen who saved investment capital through thrift and hard work, any who fit this profile were for the most part junior partners. The senior partners, the source of most of the investment capital, were the same landed oligarchs who were driving independent proprietors off the land.

More generally, it's a common complaint of the owning classes, whenever labor has too much independent access to the means of production and subsistence, that it's hard to get them to work longer hours or on a regular basis, and that even then only when they're offered a wage so high as to cut the profit margin to almost nothing. For example, E.G. Wakefield, an early 19th expert on the planting of colonies, recommended that the lower orders' access to vacant land be severely restricted:

In colonies, labourers for hire are scarce. The scarcity of labourers for hire is the universal complaint of colonies. It is the one cause, both of the high wages which put the colonial labourer at his ease, and of the exorbitant wages which sometimes harass the capitalist.

Where land is cheap and all men are free, where every one who so pleases can obtain a piece of land for himself, not only is labour very dear, as respects the labourers' share of the product, but the difficulty is to obtain combined labour at any price.

It's similar to the complaint of American industry in the 1920s, when the culture of thrift had not yet accommodated itself to the mass-production of cheap crap. Even in cities, people would produce what they could at home, in the household economy, and work only enough to buy what they thought they really needed. Had those cultural persisted, increasing productivity might have led to constantly decreasing work-weeks and expanding leisure. The solution, described by Stuart Ewen in Captains of Consciousness, was the mass-consumption revolution: installment buying, cosmetic product differentiation, planned obsolescence, and relentless propaganda to identify "homemade" and "old-fashioned" with "substandard" and "atavistic": "This Nestle infant formula is so much more scientific and up-to-date than your clunky old breast, Mrs. Bhardwaj...." Like enclosures, it was--far from a spontaneous outcome of the free market--a revolution imposed on society from above in response to producing class recalcitrance.

Meanwhile, Peter Lawrence has some interesting comments on Reynolds' comparison between the factory worker and subsistence farmer:

Of course, it's making the wrong comparisons, comparing "life as a subsistence farmer" with "life as a factory worker", when it should be comparing factories with oppressed agricultural labourers' conditions (they were often not even farmers). It also misunderstands that subsistence farming is not harder work than factory work, only full time farming is; true subsistence farming is just not that intensive except when people are forced onto really marginal land the way some evicted Irish were. Normally, subsistence farming involves occasional hard work and a lot of spare time for other activities (like making cuckoo clocks in Black Forest winters, for cash sale when travel could resume). Working your own land and then some to pay rent, tithes or taxes, now that does need more work - as does working a small part of your own land inefficiently while you clear the rest of it, like the American pioneers. So the author is mistakenly comparing factory conditions with the artificial alternatives obtaining during industrialisation, instead of with the conditions that would have obtained if it had not been for industrialisation.

But I don't want to leave you with the impression that a simple Chesterbellocian peasant proprietorship would be a return to a golden age either; that only ever applied transitionally, between the end of endemic mediaeval warfare and the intensification of enclosures in response to the peace dividend. Even with institutions in place to maintain that we couldn't go back to it now - developed countries are overpopulated for that lifestyle, besides which today's populations don't have the skills to go back to that any more than the first Australian convicts could feed themselves by their own efforts until they learned what their ancestors were brought up to do (just look at land reform in Zimbabwe today!).

I don't agree with Mr. Lawrence's assessment of population pressures, by the way. Biointensive farming produces more vegetables per acre than mechanized row-cropping, with far less fossil fuel consumption for fertilizers and long-distance distribution than the present system. So if we'd be overpopulated for that kind of economy, we're far more overpopulated for the kind we have now.

In any case, my main point is that Glenn Reynolds gets it backwards. The large firm and the factory system did not become the dominant economic institutions because of some objective technological imperative, or their superior efficiency in a free market. They became the dominant economic institutions because of their superior effectiveness at controlling labor; and then the state intervened in the market to make them efficient enough to survive.

Sunday, June 19, 2005

Carnival of the Un-Capitalists

This week, it's another themed edition--Science--and the host is Guerrilla Science.

Friday, June 17, 2005

Still More on Contract Feudalism

I've written in the past about Contract Feudalism: a state of affairs in which, thanks to the state's pro-employer intervention in the market, the bargaining power of labor is so weak that workers will suffer just about any indignity to keep their job. In a post last week, I linked to a good article in Monthly Review about organized capital's strategic offensive over the past thirty years to weaken labor's bargaining power. The state capitalists, since adopting their new neoliberal consensus of the Seventies, have been hell-bent on creating a society in which the average worker is so desperate for work that he'll gratefully take any job offered, and do whatever is necessary to cling to it like grim death.

But even so, I never cease to be surprised by the new indignities that labor is subjected to. Just when I think things couldn't get much worse, I find this abomination (via Wake-Up Wal-Mart Blog, hat tip to The Green Lantern who drew my attention to it):

New rule requires workers to work any shift or be fired

Wal-Mart officials in Cross Lanes told employees on Tuesday they have to start working practically any shift, any day they’re asked, even if they’ve built up years of seniority and can’t arrange child care.

Store management said the policy change is needed to keep enough staff at the busiest hours, but some employees said it appears to be an attempt to force out longer-term, higher-paid workers.

“We have many people with set schedules who aren’t here when we need them for our customers,” said John Knuckles, a manager at the store, which is located in the Nitro Marketplace shopping center and employs more than 400.

“It is to take care of the customers, that’s the only reason,” he said.

Workers who have had regular shifts at the store for years now have to commit to being available for any shift from 7 a.m. to 11 p.m., seven days a week. If they can’t make the commitment by the end of this week, they’ll be fired.

“It shouldn’t cause any problem, if they [store employees] are concerned about their customers,” Knuckles said.

Several single mothers working at the store have no choice now but to quit, said one employee, who would not give her name for fear of retribution.

“My day care closes at 6 and my baby sitter can’t work past 5,” said the employee, a mother of two who has been a cashier for more than three years. Neither of the services is available over the weekends, she added. “I have to be terminated; I don’t know what I’ll do.”

“Wal-Mart is supposed to be a family-oriented company, but kids don’t matter,” the worker said.

Along with the “open-availability” policy, the store is requiring all floor employees to learn how to run cash registers, several employees said. They suspect this is an attempt to brace for the departure of many of the employees who now work as cashiers.

When announcing the new policies, store managers said they expected to lose about 60 people, according to another employee who asked not to be named.

“They said sales were down so much, they had to make a change,” the worker said. “The past year they’ve really been nitpicking” longer-term employees, who are paid more.

“A lot of people were mad and there were women crying — it’s just terrible,” said the worker, who has been at the store six years. “I’ve put up with a few things, but this has got to be the worst thing I’ve seen them do.”

Other Wal-Mart stores have open-availability rules, but it does not appear to be required of each store by company headquarters. Managers at Wal-Marts in South Charleston and Ripley refused to comment, but one employee at the store in Spencer, also speaking on condition of anonymity, said there was no such policy in place there.

(One thing that jumps out at me, especially, is that the policy's being used to harrass and drive away better-paid senior workers, and simultaneously increase job insecurity and management control over the overworked people that are left. Surprise, surprise, surprise! That's what's meant by the "increased labor productivity" the talking heads on CNBC make so much of.)

I haven't been able to figure out, just from reading the story, whether the policy actually requires workers to be on-call on their days off and come in at a moment's notice, or just to be available for scheduling on various shifts. Gretchen Ross of The Green Lantern, in response to my query, says she's pretty sure it's the former. If so, that's especially hellish. Wage labor, traditionally, has involved a devil's bargain in which you "sell your life in order to live"; you cut off the eight or twelve hours you spend at work and flush them down the toilet, in order to get the money you need to support your real life in the real world, where you're treated like an adult human being. In other words, the bargain assumed, in Elizabeth Anderson's words (she's the person who coined the term "contract feudalism"),

the separation of work from the home. However arbitrary and abusive the boss may have been on the factory floor, when work was over the workers could at least escape his tyranny (unless they lived in a factory town, where one's boss was also one's landlord and regulator of their lives through their leases). Again, in the early phase of industrialization, this was small comfort, given that nearly every waking hour was spent at work. But as workers gained the right to a shortened workday--due to legislation as well as economic growth--the separation of work from home made a big difference to workers' liberty from their employers' wills.

Out in the real world, where your judgment and values actually mean something, you try to pretend that that other place doesn't exist. Imagine if you could never enjoy a day off, or even an hour enough, without the constant awareness that the phone might ring and drag you back down into hell.

For all too many employers, the traditional devil's bargain is no longer good enough. Employers (especially in the service sector) are coming to view not only the employee's labor-power during work hours, but the employee himself as their property. They are expected to live on-call 24 hours a day: that thing they used to call "home" is just the shelf they're stored on when their owner isn't using them at the moment. And the boss has a claim on what they do even during the time they're not on the clock: the political meetings you attend, whether you smoke, the things you write in your blog--nothing is really yours. Most people who blog on political or social issues, probably, fear what might turn up if the HR Nazis do a Google on them. And as for the job search itself--good God! You've got to account for every week you've ever spent unemployed, and justify what use you made in your time without a master. If you were ever self-employed, I guess, you might be considered "overqualified": that is, there's a danger you might not quite have your mind right, because you don't need the job badly enough. And the kinds of questions about why you left your past job, the personality profiling to determine if you're concealing any non-Stepford Wife opinions behind a facade of obedience, etc.... It's probably a lot like the tests of "political reliability" to join the old Communist Party of the Soviet Union.

It doesn't take a rocket scientist to grasp the root of the problem, or the solution. Timothy Carver (aka Decnavda) puts the alternatives in very stark terms:

....anyone who has sat a negotiation table knows where the real power to gain a lion's share of the mutual benefit lies: with the power to walk away. If one side can walk away from the table and the other side cannot, the party that can leave can get almost anything they want as long as they leave the other party only slightly better off than if there was no deal at all....

What creates an imbalance in the power to walk away? One situation is need. If one side has to make the exchange, their power to walk away is gone.

....For most people, a job is the ultimate need. It from the earnings of job that all other needs are satisfied.

Capital is wealth that is used to help produce more wealth. By definition, capital is not needed by its owner: Wealth that is needed is consumed. Instead of investing in capital, the owner of excess wealth could choose to hoard land and gold, or indulge in ostentatious luxury. But capital is needed by the laborer, for whom it is necessary for the production of the wealth that the laborer needs to live.

Thus, free exchanges between labor and capital make the world a better place, because they all increase value in the world and they all make all participants better off than they were before the exchange. Free exchanges between labor and capital also inevitably result in capital retaining the greatest share of the increased value by exploiting its power to walk away from the exchange.

So how can we make the exchange more fair?

The socialist answer is to abolish the free market in labor and capital, and make the laborers the owners of all the capital they utilize. But this throws the baby out with the bath water. The exploitation of the zero-sum game is ended, but so are the wealth-producing advantages of the positive-sum game. The owners of excess wealth are forbidden from putting it to use in the creation of more wealth, and laborers have no incentive to produce excess wealth, since it cannot be invested. Increased value is never exploited, because there is no increased value.

The conservative answer is to give workers more training to do better or different work. But better training does not change the minimum needs the worker must satisfy to be willing to work. It merely increases the increased value of the labor-capital exchange, all of which can be taken by capital due to their power to walk away.

The liberal answer is to have the government meddle in the labor-capital exchange....

There is another way. The need for government meddling could end if the balance of negotiating power between labor and capital were equalized. Currently, the imbalance exists because capital can walk away, but labor cannot.

Carver proposes a basic guaranteed income to redress the balance of bargaining power. I prefer Benjamin Tucker's free market socialist solution. As Tucker argued, the imbalance in bargaining power between labor and capital was not the result of a free market, but of government intervention in the market on behalf of capital:

It was discovered that capital had so manipulated legislation that unlimited competition is allowed in supplying productive labor, thus keeping wages down to the starvation point, or as near it as practicable; that a great deal of competition is allowed in supplying distributive labor, or the labor of the mercantile classes, thus keeping, not the prices of goods, but the merchants’ actual profits on them down to a point somewhat approximating equitable wages for the merchants’ work; but that almost no competition at all is allowed in supplying capital, upon the aid of which both productive and distributive labor are dependent for their power of achievement, thus keeping the rate of interest on money and of house-rent and ground-rent at as high a point as the necessities of the people will bear.

On discovering this, Warren and Proudhon charged the political economists with being afraid of their own doctrine. The Manchester men were accused of being inconsistent. The believed in liberty to compete with the laborer in order to reduce his wages, but not in liberty to compete with the capitalist in order to reduce his usury. Laissez Faire was very good sauce for the goose, labor, but was very poor sauce for the gander, capital....

....Proudhon and Warren found themselves unable to sanction... the seizure of capital by society. But, though opposed to socializing the ownership of capital, they aimed nevertheless to socialize its effects by making its use beneficial to all instead of a means of impoverishing the many to enrich the few. And when the light burst in upon them, they saw that this could be done by subjecting capital to the natural law of competition, thus bringing the price of its own use down to cost, – that is, to nothing beyond the expenses incidental to handling and transferring it. So they raised the banner of Absolute Free Trade; free trade at home, as well as with foreign countries; the logical carrying out of the Manchester doctrine; laissez faire the universal rule. Under this banner they began their fight upon monopolies, whether the all-inclusive monopoly of the State Socialists, or the various class monopolies that now prevail.

Of the latter they distinguished four of principal importance: the money monopoly, the land monopoly, the tariff monopoly, and the patent monopoly.

Most important, by far, was the money monopoly, or

the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, of issuing the circulating medium, a privilege which is now enforced in this country by a national tax of ten per cent., upon all other persons who attempt to furnish a circulating medium, and by State laws making it a criminal offense to issue notes as currency. It is claimed that the holders of this privilege control the rate of interest, the rate of rent of houses and buildings, and the prices of goods, – the first directly, and the second and third indirectly. For, say Proudhon and Warren, if the business of banking were made free to all, more and more persons would enter into it until the competition should become sharp enough to reduce the price of lending money to the labor cost, which statistics show to be less than three-fourths of once per cent. In that case the thousands of people who are now deterred from going into business by the ruinously high rates which they must pay for capital with which to start and carry on business will find their difficulties removed.... Then will be seen an exemplification of the words of Richard Cobden that, when two laborers are after one employer, wages fall, but when two employers are after one laborer, wages rise. Labor will then be in a position to dictate its wages, and will thus secure its natural wage, its entire product....

Just imagine a market in which jobs competed for workers, instead of the other way around. As I wrote in the "Contract Feudalism" post,

Instead of workers living in fear that bosses might discover something "bad" about them (like the fact that they have publicly spoken their minds in the past, like free men and women), bosses would live in fear that workers would think badly enough of them to take their labor elsewhere. Instead of workers being so desperate to hold onto a job as to allow their private lives to be regulated as an extension of work, management would be so desperate to hold onto workers as to change conditions on the job to suit them. Instead of workers taking more and more indignities to avoid bankruptcy and homelessness, bosses would give up more and more control over the workplace to retain a workforce.

Here's what the Anarchist FAQ has to say about it:

It's important to note that because of Tucker's proposal to increase the bargaining power of workers through access to mutual credit, his individualist anarchism is not only compatible with workers' control but would in fact promote it (as well as logically requiring it). For if access to mutual credit were to increase the bargaining power of workers to the extent that Tucker claimed it would, they would then be able to: (1) demand and get workplace democracy; and (2) pool their credit to buy and own companies collectively. This would eliminate the top-down structure of the firm and the ability of owners to pay themselves unfairly large salaries as well as reducing capitalist profits to zero by ensuring that workers received the full value of their labour. Tucker himself pointed this out when he argued that Proudhon (like himself) "would individualise and associate" workplaces by mutualism, which would "place the means of production within the reach of all."

UPDATE--Gretchen at Green Lantern has updated her original story. Wal-Mart, apparently, has caved under the pressure of public outrage. They're busy retracting, denying, "clarifying," and explaining what they "really meant." In other words, they're retreating as fast as the North Koreans after the Inchon landing.

The one thing these bastards seem to understand is how to go belly-up when somebody else has the whip hand. So don't let them forget....