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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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Thursday, December 08, 2005

Socialist Definitional Free-for-All, Part II

Meanwhile, Roderick Long draws on a variety of sources to show the ambiguities involved in using terms like "capitalism" and "socialism," and raises the issue of how much the organization of business firms under a free market might differ, if at all, from their present form under actually-existing capitalism.

In regard to the former question, he links to Charles Johnson's free market defense of (among other things) Cesar Chavez and the Imolakee boycott of Taco Bell, and Brad Spangler's post on the semantic quagmire involved in debating "capitalism" without a prior agreement on definitions.

Spangler writes:

I more often label myself a “market anarchist” rather than an “anarcho-capitalist” these days. Capitalism, rightly or wrongly, suggests different things to different people.

To someone from the Libertarian Party / Cato Institute “mainstream” of the modern American libertarian movement, “capitalism” is intrinsically good because they see it as synonymous with voluntarism and a lack of coercion. This is rooted in the profound and very true observations by Austrian economists, such as the great Ludwig von Mises and Murray Rothbard, that the fundamental characteristic of markets is not movement of currency, but voluntary, mutually agreeable cooperation and exchange. To a libertarian, then, even non-profit groups are part of “The Market”. In other words, The Market consists of the entire sphere of all genuinely voluntary, non-coercive activity.

To those influenced by Marxist pseudo-left ideas, this seems like a tortured and alien definition of the market — a disingenuous rhetorical trick by libertarians. In actuality, though, this only reflects how important, how revolutionary those insights from free-market Austrian economics are. It sounds like nothing you’ve ever heard before. Guess what? Everything you’ve ever heard before is what has made such a mess of the world.

The heirs of this profound intellectual legacy, the libertarian movement, have failed to live up to it, though. The libertarian movements “mainstream” is poisoned by a cultural affinity to the Right that blinds them to the matter of nominally “private” interests that are in actuality full partners with the literal apparatus of government — the sum total of which is the true State.

In regard to the latter, he quotes an old post on nominally "private" interests that are in fact part of the system of state power and state-enforced class rule:

Let’s postulate two sorts of robbery scenarios.

In one, a lone robber points a gun at you and takes your cash. All libertarians would recognize this as a micro-example of any kind of government at work, resembling most closely State Socialism.

In the second, depicting State Capitalism, one robber (the literal apparatus of government) keeps you covered with a pistol while the second (representing State-allied corporations) just holds the bag that you have to drop your wristwatch, wallet and car keys in. To say that your interaction with the bagman was a “voluntary transaction” is an absurdity. Such nonsense should be condemned by all libertarians. Both gunman and bagman together are the true State.

In other words, what the ASI calls "privatization" ain't no sech a thang a-tall.

Johnson, along similar lines, writes:

I don’t have any strong opinions on whether or not the Taco Bell boycott is “anti-capitalist” because I haven’t got any strong opinions about what “capitalism” (or, a fortiori, “anti-capitalism”) means. It seems to me that has been used to describe at least three different things, two of which are mutually exclusive and one of which is independent of those two. These are:

1. The free market: “capitalism” has been used, mostly (but not exclusively) by its defenders to just mean a free market, i.e., an economic order that emerges from voluntary exchanges of property and labor without government intervention (or any other form of systemic coercion).

2. The corporate State: “capitalism” has also been used, sometimes by its opponents and sometimes by the beneficiaries of the system, to mean a corporate State—that is, active government support for big businesses through instruments such as subsidies, central banking, tax-funded infrastructure, development grants and loans, special tax exemptions, funding plants, acquiring land through eminent domain, government union-busting, and so on down the line. Since government intervention is always, by nature, either services funded by expropriated tax dollars or regulations enforced from the barrel of a gun, it’s worth noting that being “capitalist” in the sense of a free marketeer requires being “anti-capitalist” in the sense of opposing the corporate State, and vice versa. The fact that state socialists and the anti-communist Right have spent the past century systematically running these two distinct senses of “capitalism” together (in order to make it seem that you had to swallow the corporate State if you believed in the free market—which the Marxists used for a modus tollens and the Rightists used for a modus ponens) doesn’t make these two any less distinct, or any less antagonistic.

3. Boss-directed labor: third, capitalism has been used (by for example, Marxians and socialists who are careful about their use of language) to refer to a specific form of labor market—that is, one where the dominant form of economic activity is the production of goods in workplaces that are strictly divided by class. Under capitalism in the third sense, most workers are working for a boss, in return for a wage; they are renting out their labor to someone else, in order to survive, and it is the boss and not the workers who holds the title to the business, the shop, and the tools and facilities that make the business run. (Or, as the Marxists would have it, the means of production.) It’s worth noting that “capitalism” in this third sense is a category independent of “capitalism” in either of the first two senses: there are lots of different ways that a free labor market could turn out (it could be organized in traditional employer-employee relationships, or into worker co-ops, or into community workers’ councils, or into a diffuse network of shopkeeps and independent contractors) and someone who is an unflinching free marketeer might plump for any of these, or might be completely indifferent as to which one wins out; whereas an interventionist statist might also favor traditional employer-employee relationships (as in Fascism) or any number of different arrangements (as in various forms of state socialism).

With these distinctions on the table, it’s worth pointing out that many 19th century libertarians—Benjamin Tucker chief among them—who considered themselves both radical free marketeers and radical critics of capitalism; what they meant was that they attacked capitalism in senses (2) and (3)—holding that state intervention on behalf of big business was unjust and at the root of most social evils, including the exploitation and impoverishment of workers which they identified as being part and parcel of capitalism in the third sense. (They also believed that exploitative and impoverishing practices would collapse in a free market; although many of the practices of landlords, bankers, bosses, etc. were not coercive in themselves, Tucker and his circle argued, they were evils that workers would not put up with if it weren’t for a background of systemic coercion and restriction of competition.

Johnson cites a piece by Daniel D'Amico arguing that the Imolakee boycott can be "anti-capitalist" without technically requiring state intervention:

Simply put I believe, there are more ways to be anti-capitalist than just using government. Mainly promoting ideas that capitalism is evil or claiming it resorts to rampant market failure are, in my view, anti-capitalist.

But as Johnson says, BFD! (my words, not his).

[This] might mean that you can undermine capitalism in the sense of the bosses’ labor market without going for government intervention. That’s certainly true, but it’s not yet clear that this is a vice. If you think (as I do) that there are serious economic problems with the sort of bureaucratic, boss-controlled, centralized, top-down corporate commerce that rose to dominance in the 20th century, then undermining that—by pointing out, for example, that it typically involves crippling knowledge problems, fosters a culture of petulant entitlement among the decision-makers, exploits the workers and systematically shuts them out of important channels for autonomous and rewarding labor, and so on—then undermining capitalism in that sense can only be counted as a good thing. If you also think that the cultural and material conditions created by boss-directed labor profits from and tends to promote the growth of corporate statism that expropriates wealth in order to support the bosses, then that gives you even stronger libertarian reasons to support anti-capitalist agitation in this sense. And indeed there are good reasons for Austrians and their fellow-travelers to think these charges against boss-centric are solid—the knowledge problems that Mises, Hayek, and Rothbard pointed out in central planning also apply when that central planning is done by bureaucratic corporations; the potential of free market competition ameliorates the problem but doesn’t eliminate it, and if decisions are being made on the margin in a market that is already dominated by centralized interlocking bureau-corps, which are supported not only by their existing market share but also by a network of cultural attitudes towards work and jobs, it looks like it is going to be a long, hard struggle to undermine those structures and make the threat of serious competition into a practicable reality. The sort of long, hard struggle, in fact, that groups like the CIW are, at their best, engaged in.

Indeed, Claire Wolfe--surely nobody's idea of a state socialist--has made essentially the same point in a number of places. E.g.: "Dark Satanic Cubicles: It's time to smash the job culture!" and How to Kill the Job Culture Before it Kills You: Living a Life of Autonomy in a Wage-Slave Society.

Johnson also celebrates the Imolakee boycott victory in another post as "a major victory for government-free, syndicalist labor organizing," linking in turn to a still earlier May Day post:

May Day is a celebration of the original conception of the labor movement, as expressed by anarchist organizers such as Albert Parsons, Lucy Parsons, Benjamin Tucker, and others: a movement for workers to come into their own, by banding together, supporting one another, and taking direct action in the form of boycotts, work stoppages, general strikes, and the creation of workers’ spaces such as local co-operatives and union hiring halls. The spirit was best expressed by Joe Hill’s famous exhortation to Dump the bosses off your back—by which he did not mean to go to a government mediator and get them to make the boss sit down with you and work out a slightly more beneficial arrangement. Dump the bosses off your back! meant: organize and create local institutions that let you bypass the bosses. Negotiate with them if it’ll do some good; ignore them if it won’t. The signal achievements of the labor movement in the late 19th and early 20th century were achievements in this spirit: the campaigns that won the 8 hour day and the weekend off in many workplaces, for example, emerged from a unilateral work stoppage by rank-and-file workers, declared by the Federation of Organized Trades and Labor Unions, and organized especially by the explicitly anarchist International Working People’s Association, after legislative efforts by the National Labor Union and the Knights of Labor failed. The stagnant, or even backsliding, state of organized labor over the past half century is the direct result of government colonization and the ascendency of government-subsidized unions.

....The labor movement, like all too many other honorable movements for social justice in the 20th century, has become a prisoner of politics: a political situation has been created in which the most rational thing for most workers to do is to muddle through with a co-opted and carefully regulated labor movement that helps them in some ways but undermines their long-term prospects. It doesn’t make sense to respond to a situation like that with blanket denunciations of organized labor; the best thing to do is to support our fellow workers within the labor movement as it is constrained today, but also to work to change the political situation that constrains it, and to set it free. That means loosening the ties that bind the union bosses to the corporate and government bureaucrats, by working to repeal the Taft-Hartley Act, and abolish the apparatus of the NLRB, and working to build free, vibrant, militant unions once again.

In Roderick Long's original post (our starting point, if you can remember back that far), he also says some things that dovetail nicely with Johnson's comments on the bureaucratic corporation.

Government regulation thus lowers the costs associated with size and hierarchy more than it lowers the associated benefits; it stands to reason, then, that firms in a genuine free-market context could be expected to be smaller and less hierarchical than they tend to be today. This is doubly true once one takes into account the increased competition for workers that a less regulated economy would presumably see (assuming that workers generally prefer less hierarchical work environments).

So how different would firms be under a genuine free market? To answer that question one would have to be able to sort out which aspects of today’s economy derive primarily from the market and which primarily from regulation, and that’s no easy task. So I feel confident about the direction of difference, but not the degree. And in any case the degree partly depends on what workers are willing to put up with – which is a variable, not a constant (and one of the functions of a labour movement is precisely to influence that variable).

And in any case, the contention that (as Murray Rothbard said) in a free market labor will receive its marginal product isn't in itself sufficient ground for the conclusion he draws that organized labor is counter-productive. I fully agree that, in the kind of free market envisioned by individualist anarchists like Tucker, labor would receive its full product as a wage (although my conception of what that entails differs considerably from the Austrian idea of marginal product). But, if you'll forgive the allusion to Keynes, "in the long run we're all dead."

Regardless of the long-run market incentives to pay labor its full product and treat people like actual human beings, in the short run the uncertainty and potential disruption of being an at-will employee can be quite a hassle. For the benefit of those who have been living on Planet Cato these many years and never had direct experience working for a boss, I'd like to point out that the average boss can fuck your life up in some really unpleasant ways before the market disadvantages of doing so are finally brought home to him. And, as some radical historians of workplace relations have pointed out, a management policy of harassing selected subgroups of workers and dividing them against each other may produce benefits, in the form of reduced labor solidarity and bargaining power, that outweigh the alleged "irrationality" costs. On the other hand, the benefits of contractually-enforced stability and predictability are just as real to a wage-laborer as they are to the parties to any other kind of contract (see this post by Thomas L. Knapp, for instance). Believe it or not, it's nice to have established procedures for grievances and progressive discipline that prevent you from being fired arbitrarily just because your boss has a bug up his ass.


Blogger Sheldon Richman said...

Regarding our terminology, I've long thought that "socialism" should have been the term reserved for the completely voluntary society, including the truly free market based on self-ownership. Human affairs can play out in the social (consensual) arena or the state (coercive) arena (with some mixture being possible). Therefore, the two great contending political perspectives are socialism and statism. The term "individualism" need not conflict with socialism thus conceived because it addresses another level of analysis.

December 09, 2005 3:53 AM  
Blogger Kevin Carson said...

Excellent point. I've also thought that the Brits had it right with the public schools vs. state schools thing.

December 09, 2005 4:08 AM  
Blogger Unknown said...

"They also believed that exploitative and impoverishing practices would collapse in a free market; although many of the practices of landlords, bankers, bosses, etc. were not coercive in themselves, Tucker and his circle argued, they were evils that workers would not put up with if it weren’t for a background of systemic coercion and restriction of competition."

This is one of the points that it seems the hardest to get through to my more traditionally "social democratic" friends, that Capitalism(3) and it's attendant evils stem from Capitalism(2) and not Capitalism(1). Some of the dissonance I think is simply indoctrination, and some is cognitive dissonance... that the policies they support actually strengthen, not diminish "capitalism", and/or (for the more "mainstream" among them) that this is a bad thing.

December 09, 2005 8:57 AM  
Blogger Unknown said...

... also, only slightly related, I've been thinking that there are two paths basically toward a free market, and that only one of them is feasible.
This is the path of treating "anarchy" as the asymptotic limit of decentralized direct democracy... that in fact true "democracy" can most fully be realized as a (quasi) anarchy.

The other path is a Hoppean reduction to micro-states (such as Liechtenstein) and land-barony, eventually resulting (through labor retreating to marginal land) in a break-up of the large estates. I don't think this is really very feasible in the world we live in, but some of it might occur on the margins of a larger scale "true democracy" movement.

December 09, 2005 9:04 AM  
Blogger Kevin Carson said...


That's similar to my argument in my recent post titled "Making Ourselves Ungovernable," or something like that.

The central value of classical democratic theory, especially of the anglo-republican ideology of the American Revolution, is consent. The ultimate in democracy is unanimous consent.

Majority rule is simply an expedient for approximating that ultimate as closely as possible when the real thing is (supposedly) unattainable.

But the smaller the unit of self-government, the closer the approximation to that ultimate ideal of unanimous consent.

And a society in which all functions were carried out by voluntary associations would achieve the democratic ideal in full.

December 09, 2005 5:00 PM  
Anonymous Anonymous said...

The above is a contradiction. Movement of currency is voluntary, mutually agreeable cooperation.

Not all movement of currency occurs on a voluntary (coercion-free) basis. It ought to, in my opinion, but that's not the case. States and common street criminals steal -- using coercion to make currency move from you to them.

This doesn't seem like a difficult point to me.

December 13, 2005 7:22 PM  
Blogger Kevin Carson said...

"....the fundamental characteristic of markets is not movement of currency, but voluntary, mutually agreeable cooperation and exchange."

Joe, I think you're misreading this sentence. The idea is not that movement of currency is not ONE FORM of voluntary cooperation and exchange, but that the category of markets includes a broader range of cooperation and exchange than MERELY the movement of currency. IOW, the market includes all forms of voluntary cooperation and exchange--including, but not limited to, the cash nexus.

December 14, 2005 6:58 PM  

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