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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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Saturday, July 01, 2006

David Friedman on "Agorism"

Via Roderick Long, on LeftLibertarian:

"My own preference is for the sort of economic institutions which have been named, I think by Robert LeFevre, agoric. Under agoric institutions almost everyone is self-employed. Instead of corporation there are large groups of entrepreneurs related by trade, not authority. Each sells, not his time, but what his time produces."

-- David Friedman, The Machinery of Freedom, pp. 144-145

I'd add the caveat that, under state capitalism, the implementation of such ideas is usually carried out under the aegis of Tom Peters' rhetoric ("outsource everything!") and is all too likely to appear reality as described by Naomi Klein in No Logo: a network of "independent" sweatshop fiefdoms subject to the quasi-feudal authority of a corporate headquarters that retains control of finance, intellectual property and branding, and mass purchasing power. But in a decentralized free market economy (as I suggested in "What Can Bosses Know?"), I'd expect present corporate hierarchies to be replaced by some combination of independent contracting and cooperative ownership.


Blogger Alberto said...

> I'd expect present corporate hierarchies to be replaced by some combination of independent contracting and cooperative ownership.

What you do think about this?

July 01, 2006 2:19 PM  
Anonymous Anonymous said...

I do find that funny, a capitalist admitting that they prefer socialism! Shame he advocates an economic system where that "preference" will not be an option for the majority of people.

And does Friedman not know that both neoclassical and Austrian economics prove that self-employment and co-operatives are inherently inefficient? Does he not know that economics has shown that you need bosses, landlords and interest takers to ensure that scare resources are efficiently allocated?

I'm only glad that neoclassical and Austrian economics do not describe the real world and so there *is* hope for humanity!

July 04, 2006 4:13 AM  
Blogger Eric H said...

Independent entrepreneurs who sell their wares and keep all the proceeds is not socialism as I've ever heard it described before. And before you decide what it is that David Friedman is advocating, you might read the book. I think he would prefer the label "anarcho-capitalist".

I would also recommend reading Oliver Williamson's _Economic Institutions of Capitalism_ and Thomas Malone's _Future of Work_ to get an idea of where the limitations lie in such schemes. They look nice on paper, but there are efficiency problems that arise (though probably not the ones Anonymous has in mind).

July 07, 2006 11:57 AM  
Anonymous Anonymous said...


If Austrians who talk about substituting self-employment and entrepreneurship for corporate hierarchy sound socialistic, it's just evidence of parallel evolution in the libertarian left and right. I'd applaud it when it appears on the right, rather than try to claim royalties for the left.

The Austrians who claim that uniting ownership with labor is "inherently inefficient" are, I believe, making assumptions about the division of labor between production and the "entrepreneurial function" that have little to do with any actual corporation in the real world. Because of the near-black box nature of the semi-planned economies of large corporations, and the Gosplan-like irrationality and Byzantine culture described by Robert Jackall in *Moral Mazes*, the "entrepreneurial" activity at the top of the hierarchy and among finance capitalists involves little more than shifting money from one venture to another based on an MBA-like assessment of the paper returns. The right-Austrian reverence for entrepreneurship in channelling factors to their highest use, and promoting more efficient (or more "roundabout," as if the two were the same) production methods, is laughable. The aggregation of distributed, idiosyncratic knowledge of the production process is almost impossible in a corporate hierarchy, and the "entrepreneurs" who decide where the money goes are almost completely cut off from anything that's going on in the production process itself.

eric h,

I've never read Malone, but I'm a big fan of Williamson. I believe the limitation you're referring to in substituting markets for hierarchies is Williamson's thesis of "asset specificity"--is that correct? My problem with that thesis is that state capitalism, by promoting market size and division of labor far beyond pareto-optimal levels, also promotes asset specificity far beyond its point of maximum efficiency. The state subsidizes R&D and technical education, subsidizes capital-intensive and deskilling forms of production, and promotes production on an artificially large scale. Otherwise, the economy would likely lean much more toward small-scale production for local markets, using general-purpose machinery for short production runs. The asset specificity that leads to the choice of hierarchy over market, in such circumstances, would likely be much less of a factor then.
--Kevin Carson, public computer

July 11, 2006 5:31 PM  
Anonymous Anonymous said...

Anyone who says they prefer a society of all or nearly-all self-employed people is being really naive. Has it occured to them that most people simply do not wish to to run their own business? Working for someone else is easier than working for oneself. It's easier to allow someone to direct you than to direct yourself. If one is employed by someone else, he is able to to go work, then come home and forget about. He doesn't have to worry about accounting, planning, markting, etc. Most people default to whatever takes the least effort. In these utopias absent of state coercion, there would still be way more people employed by others than self-employed.

June 26, 2007 12:11 PM  
Blogger Unknown said...

As you can or could see, because of my bad english, there not only anglophone who are interested in market-anarchism and agorism.

My point is that in absence of autority, I don't see how it could be possible that free people organised themself the way you would prefered them to be organised. Organising others is autority. And without autority, they will simply regroup themself in the form each see fit for the best of is knowledge.

But, I do suspect that if state stop give privileges, deliberately or not deliberately, to bigs owners (corporation) paid by smalls owners (worker, medium and small enterprise), the big owner will lose their privileges and drop to the level of mediums and smalls enterprises.

So instead of having big monopoly, protected by the state, imposing their model of corporate organisation, I think that we can expect a free-market with no autority and no artificial monopoly to be much more creative in matter of organisation model. Each model competing with each other and each finding is proper place in the market, without being able to get monopolistic except if the model is much more efficient.

October 08, 2007 11:09 AM  
Blogger Kevin Carson said...

Actually, frédéric, I agree with much of what you say. I expect the most likely outcome is that the state capitalist system will collapse 1) under its own weight from systemic crises of various types as demand for the subsidized inputs outstrips the state's ability to provide them; and 2) from a wide range of pressures from diverse opposition movements that have little in common besides their hatred of state capitalism. The successor society, therefore, is likely to be a panarchy. I'm just trying to get mutualist ideas as big a place in the mix as possible.

October 11, 2007 11:46 AM  

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