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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

Tuesday, April 26, 2011

At C4SS: Is Money Too Cheap or Too Dear? Both

Saturday, April 23, 2011

At C4SS: Knowing the Real Enemy

Tuesday, April 19, 2011

At C4SS: Beyond the Education Bubble

Richard Troxell. Looking Up at the Bottom Line: The Struggle for the Living Wage

Richard R. Troxell. Looking Up at the Bottom Line: The Struggle for the Living Wage (Austin: Plain View Press, 2010).

The first two-thirds of this book is a series of anecdotes or vignettes. Even for those of us who reject a government role in creating a living wage, these stories should remind us of how bleak life is for the working poor, and how precarious life is for those who are homeless and unemployed—or perhaps just living from paycheck to paycheck. Too often, right-wing libertarians react to such accounts with a ho-hum “the poor will always be with us” attitude, condemning the “victim culture” or dismissing poverty as inevitable given the underclass's “short time preferences” or its position on the Bell Curve. Worse, their knee-jerk response is to regard those who point out such problems as enemies, or at best deserving of suspicion. For a libertarian culture that too often seems to position itself as the defender of the existing corporate model of capitalism as a proxy for “the free market,” anyone who points to widespread poverty and concentration of wealth under corporate capitalism must be some sort of statist who hates the market. What such people think the pathological side-effects of corporate capitalism have to do with a “free market” is beyond me.

Troxell's proposed agenda for solving the problem, which he presents in the latter part of the book, is a combination of affordable housing, single-payer healthcare, and local living wage ordinances tied to the price of housing.

As a libertarian, I can't endorse any proposal for government intervention in the economy. But I'm convinced that most of the evils Troxell rightly objects to result from existing government intervention—on the side of corporate interests, employers, landlords and the rich. The proper solution is not for government to start intervening on the side of the poor, or to redistribute wealth from the rich to the poor—but to stop redistributing wealth from the poor to the rich.

Interestingly, I was apparently offered a review copy of this book as a result of having caught someone's favorable attention with an earlier column at Center for a Stateless Society—“Yes, the Rent Really is Too Damn High”—in which I called for just such an agenda.

A huge part of existing concentrations of wealth result from rents on artificial scarcities and artificial property rights created by the state. A huge part of poverty results from inflated costs of basic subsistence created by similar such artificial scarcities and mandated inflation of the overhead cost of daily life. A libertarian agenda for poverty relief would be to dismantle such artificial scarcities and overheads and let the competition of a freed market redistribute wealth from the present rentier classes to the poor.

Troxell quotes Baylor political science professor Jerold Waltman's book Case for a Living Wage, in which he sets the criteria for a living wage: 1) it should enable the recipient to live at a certain minimum level, and 2) should prevent too much inequality from emerging. But in a very real sense, a freed market would create a living wage by these criteria.

The natural function of a market price system is to tie the price of goods and services to the cost or effort of providing them, and to tie wages to effort or disutility. The normal equilibrium of the market—the natural ratio toward which exchange is always tending—is, when goods are reproducible and there are no artificial barriers to market entry or competition, is the exchange of equal efforts or disutility. In a market of free exchange between equals, trade is effort for effort.

Artificial scarcity and artificial property rights—privilege—break this link between effort and consumption.

As I argued in the column mentioned above, a large share of the so-called “property rights” enforced under capitalism are property rights in controlling access to natural opportunities.

The Marxist Maurice Dobb once gave the example of government granting to its favored clients a monopoly right to erect toll gates across the roads, and to enrich themselves by pocketing the tolls. Standard marginalist economics, Dobb argued, would treat opening the gates as a “productive activity,” and claim that the tolls contributed to production by the amount they added to price. Forbearing to interfere with production would be a productive activity, and the tribute collected for this forbearance would be the reward for productive services.

This is what Thorstein Veblen called “capitalized disservicability”: the assignment of an economic value to the magnanimous act of allowing production to occur without interference. Among the less academically inclined, I believe it’s called “protection money.”

Such artificial property rights include many things other than land. Every state grant of power to control the conditions under which other people may undertake productive activity is a source of illegitimate rent. Both tariffs and “intellectual property,” for example, are forms of protectionism in that they restrict the right to produce a given good for a particular market area to a privileged class of firms.

In every case, the person who would apply his labor, energy and skills to the earth and its natural resources is forced to pay tribute for the right to produce and work to feed a useless parasite in addition to himself. And in every case, the privileged classes of landlords, usurers and other extortionists seek to close off opportunities for self-employment because such opportunities make it too hard to get people to work for them on profitable terms.

Much or most of the price of most of the goods you buy consists of embedded rents on artificial property rights. Much of the product of your labor goes as rent to your employer, because the artificial dearth of natural opportunities to produce creates a buyer’s market for labor in which workers compete for jobs instead of jobs competing for workers.

The rent is, indeed, too damn high.

The person who “owns” title to a piece of vacant and unimproved land, instead of working for everything she gets, is able to force someone else to work for part of what she herself gets. Part of the purchaser's or tenant's labor is directed, not to her own consumption, but to the consumption of the landlord. Likewise, that part of the price of proprietary software, music and other content, which is above the marginal cost of reproduction, amounts to an equivalent value of the purchaser's laborer which goes to feed the “owner” of the copyright. When zoning laws criminalize microenterprise in the household, and compel the producer to rent stand-alone commercial real estate, or when “safety” and “health” regulations compel her to purchase industrial-grade equipment rather than using the spare capacity of ordinary household goods that she already owns, the margin this adds to her price results in an equal rent which the owner of an established business can collect from the customer.

As the Wobblies' Big Bill Haywood said, for every man who gets a dollar he didn't sweat for, there's another man who sweats for a dollar he didn't get. Or as the individualist anarchist Benjamin Tucker put it, the deficit in unpaid labor for the non-privileged results in an equal and opposite efficit of unearned income for the privileged.

One side-effect of privilege is that the concentration of wealth in the hands of people with a high propensity to save and invest, and the reduction of income to those with a high propensity to consume, results in chronic tendencies toward overinvestment and overproduction. The system is plagued with idle productive capacity which cannot dispose of its full output when fully utilized, and with surplus investment capital which can find a profitable outlet only in speculative bubbles.

I fully agree with Troxell that a living wage—properly understood—would remedy much of the economy's chronic inclination toward crisis.

Charles Johnson, in “Scratching By,” describes all the ways the homeless and working poor are nickled and dimed to death by local government. The effect of all these policies is to raise the fixed costs of living:

Artificially limiting the alternative options for housing ratchets up the fixed costs of living for the urban poor. Artificially limiting the alternative options for independent work ratchets down the opportunities for increasing income. And the squeeze makes poor people dependent on—and thus vulnerable to negligent or unscrupulous treatment from—both landlords and bosses by constraining their ability to find other, better homes, or other, better livelihoods. The same squeeze puts many more poor people into the position of living “one paycheck away” from homelessness and makes that position all the more precarious by harassing and coercing and imposing artificial destitution on those who do end up on the street.

As described by Ivan Illich in Tools for Conviviality, as late as 1940 a major share of housing in Massachusetts was still self-built. Today, with new modular techniques, the construction of safe, comfortable and affordable housing should be easier than ever. But local building codes—written largely at the behest of building contractors—criminalize such techniques in order to lock their obsolete methods into place and protect them from competing with cheaper alternatives.

The natural effect of competition in a freed market, when all these state-enforced artificial scarcities are abolished, is to socialize the rents previously collected from them. Eliminating copyright socializes the price of proprietary content. Opening vacant land to free homesteading socializes the portion of land rent that resulted from artificial scarcity. Abolishing the zoning and licensing restrictions on household microenterprise socializes the premium brick-and-mortar downtown businesses charged on artificially inflated entry barriers. Abolishing patents socializes the benefits from increased productivity of human labor.

So in a sense, I am for socialized housing, socialized healthcare, etc. Instead of leaving the basic artificial scarcities in place and then procuring healthcare and housing at taxpayer expense for those who can't afford them, I want to make healthcare and housing affordable by abolishing the monopolies that make it possible to get rich off them in the first place. Although Troxell says it of his version of a living wage, it's also true of my version that it would reduce public expenditures on food stamps. The welfare state, when you get right down to it, is a case of the capitalists working through their state—which is, after all, the “executive committee of the ruling class”—to clean up the mess created by their privilege.

Even if Troxell doesn't agree with my emphasis, or with the principles on which my opposition to government intervention is based, I suspect he would agree with most of the agenda I propose for dismantling government support to privilege.

Some forms of that support he points to himself, such as the vagrancy laws which he discusses at considerable length. At one time, the common lands were a vital insurance policy for those who fell on hard luck. The land-poor might reduce their total need for agricultural wage labor—and thereby increase their bargaining power against the landed classes for what wage employment they did take—by meeting some of their subsistence needs through production on the common. That was, in fact, one of the chief reasons for Parliamentary Enclosures in the 18th century: the landlords complained that, when peasants had access to the common, it was difficult to get them to work as many hours, or for such cheap wages, as the gentry would prefer.

Vagrancy laws are a way of accomplishing the same result today, by criminalizing the very act of living without a permanent place of residence. All legal restrictions on individual access to public rights of way—so long as no one obstructs anyone else's movement or harasses them—are illegitimate. Such legal restrictions are in fact a violation of property rights: the individual's right of equal access to a public right of way. Restrictions on shared housing by people not related to other, living in cars, and the like, should also be removed.

By the way, Troxell points to the oddly selective enforcement of Austin's “No Camping Ordinance,” which supposedly criminalizes camping in public. For some reason, people camping out to be first in line for a sale or to buy football game or concert tickets aren't arrested. Imagine that! If you didn't know better, you'd almost think the ordinance was deliberately targeted against homeless people.

The only proper basis for appropriating previously unowned land should be human labor. Absentee titles to vacant and unimproved land should be treated as null and void. Contractor-written building code restrictions on self-built housing, which criminalize vernacular or unconventional building techniques on spurious safety grounds, should be eliminated. Vacant lots, undeveloped acreage, unused government property, vacant government buildings, military bases (Troxell mentions an attempt to turn Austin's decommissioned Bergstrom AFB into a homeless community), etc., should be opened for free homesteading. Military bases and vacant government offices should become the sites for squatter communities like Christiana in Denmark, and vacant and undeveloped land should host vibrant favelas of the sort that sprang up with self-built housing in England's Pittsea and Laindon communities, in Essex, from the early 20th century until the immediate post-WWII period (as described by Colin Ward in Talking Houses).

Like many favelas in Latin America, and like Cory Doctorow's near-future American favelas in Makers, these examples of self-built housing were by no means “substandard” or “primitive” in any objective sense. When inhabitants of squatter communities feel any sense of confidence at all, they take pride in improving their living spaces. As Colin Ward described them, most of the self-built houses in Pittsea and Laindon were quite well-built. The residents were typically people whose incomes were too low to qualify them for loans from building societies, and the houses they built—although generally safe and sturdy—would have been in violation of housing codes passed after WWII. Doctorow's description of the building skills of his fictional squatters, in the shantytowns and falelas which grew up in half-built subdivisions and abandoned shopping malls, are quite reminiscent of those of real-world communities like those in England and Latin America:

They started with plastic sheeting and poles, and when they could afford it, they replaced the sheets, one at a time, with bricks, or poured concrete and rebar.

None of them had mortgages, but they had neat vegetable gardens and walkways spelled out in white stones with garden gnomes standing guard.

Getting back to the planks of our agenda: All legal barriers to running a microbakery out of one's own home with an ordinary kitchen oven, making clothing with a sewing machine, opening a beautician shop in a spare room with the simple purchase of a chair and tools, running a cab service with the family car and a cell phone, providing daycare for the neighbors, etc., should be eliminated.

Drug patents should be abolished, legal barriers to the provision of service by clinical practitioners (dental assistants, physicians assistants, etc.) eliminated, and legal barriers to cheap cooperative health insurance like Ithaca Health (or membership-based contract practice through cooperative clinics—e.g. John Muney's $80/month plan in New York) should be removed.

Troxell mentions “Fresh Start,” a proposal to unite a variety of local social services into a single integrated program that would deal with homelessness on an integrated, process basis. In the process of discussing it, he refers to one of the contributing factors to the problem: the shutting down of the great majority of YMCAs, which once provided a source of cheap housing for the indigent. Taking these things together, I couldn't help but think of some proposals by Dougald Hine and Nathan Cravens to accomplish the same result outside the state, through voluntary self-organization. What they came up with was essentially a P2P version of Fresh Start.

In “Social Media vs. the Recession,” Dougald Hine wrote:

Looked at very simply: hundreds of thousands of people are finding or are about to find themselves with a lot more time and a lot less money than they are used to. The result is at least three sets of needs:

practical/financial (e.g. how do I pay the rent/avoid my house being repossessed?)

emotional/psychological (e.g. how do I face my friends? where do I get my identity from now I don't have a job?)

directional (e.g. what do I do with my time? how do I find work?)...

Arguably the biggest thing that has changed in countries like the UK since there was last a major recession is that most people are networked by the internet and have some experience of its potential for self-organisation... There has never been a major surge in unemployment in a context where these ways of "organising without organisations" were available.

As my School of Everything co-founder Paul Miller has written, London's tech scene is distinctive for the increasing focus on applying these technologies to huge social issues... Agility and the ability to mobilise and gather momentum quickly are characteristics of social media and online self-organisation, in ways that government, NGOs and large corporations regard with a healthy envy.

So, with that, the conversations I've been having keep coming back to this central question: is there a way we can constructively mobilise to respond to this situation in the days and weeks ahead?...

Information sharing for dealing with practical consequences of redundancy or job insecurity. You can see this happening already on a site like the Sheffield Forum.

Indexes of local resources of use to the newly-unemployed—including educational and training opportunities—built up in a user-generated style.

Tools for reducing the cost of living. These already exist—LiftShare, Freecycle, etc.—so it's a question of more effective access and whether there are quick ways to signpost people towards these, or link together existing services better.

An identification of skills, not just for potential employers but so people can find each other and organise, both around each other and emergent initiatives that grow in a fertile, socially-networked context.

If the aim is to avoid this recession creating a new tranche of long-term unemployed (as happened in the 1980s), then softening the distinction between the employed and unemployed is vital. In social media, we've already seen considerable softening of the line between producer and consumer in all kinds of areas, and there must be lessons to draw from this in how we view any large-scale initiative.

As I see it, such a softening would involve not only the kind of online tools and spaces suggested above, but the spread of real world spaces which reflect the collaborative values of social media. Examples of such spaces already exist:

Media labs on the model of Access Space or the Brasilian Pontos de Cultura programme, which has applied this approach on a national scale

Fab Labs for manufacturing, as already exist from Iceland to Afghanistan

studio spaces like TenantSpin, the micro-TV station in Liverpool based in a flat in a towerblock—and like many other examples in the world of Community Media

Again, if these spaces are to work, access to them should be open, not restricted to the unemployed. (If, as some are predicting, we see the return of the three day week, the value of spaces like this open to all becomes even more obvious!)

Nathan Cravens of the P2P Foundation took the ball and ran with it, elaborating Hine's basic idea into a Triple Alliance:

The Triple Alliance describes a network of three community supported organizations necessary to meet basic needs and comforts.
  • The Open Cafe, a place to have a meal in good company without a price tag
  • The CSA or community supported farm
  • The Fab Lab, a digitally assisted manufacturing facility to make almost anything

The Fab Lab, he explained, was intended to be based on something like the Open Source Ecology project in rural areas, and hackerspaces in urban areas.

The one thing I felt was lacking—which ties in with Troxell's mention of the old YMCAs—was cheap housing as a fourth leg of the stool. Here's my proposal for the housing leg from The Homebrew Industrial Revolution, which was based on my discussions with Cravens on the P2P Research email list (and which incidentally also used the old YMCA as a model):

Open-source housing would fill a big gap in the overall resiliency strategy. It might be some kind of cheap, bare bones cohousing project associated with the Cafe (water taps, cots, hotplates, etc) that would house people at minimal cost on the YMCA model. It might be an intentional community or urban commune, with cheap rental housing adapted to a large number of lodgers (probably in violation of laws restricting the number of unrelated persons living under one roof). Another model might be the commercial campground, with space for tents, water taps, etc., on cheap land outside the city, in connection with a ride-sharing arrangement of some sort to get to Alliance facilities in town. The government-run migrant worker camps, as depicted in The Grapes of Wrath, are an example of the kind of cheap and efficient, yet comfortable, bare bones projects that are possible based on a combination of prefab housing with common bathrooms. And finally, Vinay Gupta’s work in the Hexayurt project on emergency life-support technology for refugees is also relevant to the housing problem: offering cheap LED lighting, solar cookers, water purifiers, etc., to those living in tent cities and Hoovervilles.

Cravens, in turn, raised the possibility of providing something like the YMCA model in the same building used for the hackerspace or open cafe.

Vacant public buildings or military bases would be obvious candidates for such complexes. As cash-strapped local governments find themselves increasingly short of enforcement funding and looking for creative ways to deal with the rising tide of underemployment and poverty they may well—as some already have—relax their restrictions on such informal arrangements.

Saturday, April 16, 2011

C4SS Second Quarter Fundraiser

Well, once again our readers came through for us and our expenses are paid through the middle of January. Thanks to all who contributed for your generosity.

That's the good news. Now guess what? That's right: we're beginning our 2nd quarter fundraiser to pay the C4SS writers and staff through the end of March.

You'll notice that our budget is significantly more modest -- just about $1600 or so per month, down from two or three thousand a month in the second half of last year. I think we're operating on a sustainable basis now, and shouldn't have any more trouble matching our income to our activities at this level. I've done my part by cutting back my writing to help lower expenses.

C4SS probably has more bang for the buck, and for the staff, than just about any think tank out there. I think it's a pretty good deal. If you think the material we put out is worth it, please consider contributing. Just use the widget on any page of the C4SS site, or use the one over there to the left in my sidebar.

Friday, April 15, 2011

At C4SS: America's Peculiar Institution

Monday, April 11, 2011

At C4SS--Libya: A Pig in a Poke?

Tuesday, April 05, 2011

At C4SS: The Hypocrisy at the Heart of the Police State

Monday, April 04, 2011

Carson in The Idea Room

Tomorrow (April 5) I'll be the guest in The Freeman's online chat room, The Idea Room. It starts at 2PM Eastern. Hope to see you there!

Friday, April 01, 2011

At C4SS: Progressives Need to Rethink the Corporate Income Tax