Posts Tagged: capitalism

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“Capitalism”: The Known Reality

… If libertarians continue to use the word “capitalism” as some kind of ahistorical ideal, if they refuse to look at the fuller cultural and historical context within which actual market relations function, they will forever be dismissed by the Left as rationalist apologists for a state-capitalist reality. That’s ironic, considering that so many Leftists have been constructivist rationalist apologists for a different kind of statist reality. But it does not obscure a very real problem.

Reaching out to the Left or to any other category of intellectuals requires a translation exercise of sorts. Real communication depends upon a full clarification of terms; if we end up using the same term to mean different things, I fear we’ll be talking over each other’s heads for a long time to come.

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Engagement with the Left on Free Markets

… If the market and the state have coexisted historically, they can be separated logically. The question of whether class differences originally arose from successful competition in the market, and the state was then called in to reinforce the position of the winners; or whether the class differences first arose from state interference, is a vital one. The fact that the state has been intertwined with every “actually existing” market in history is beside the point; social anarchists themselves face a similar challenge–that the state has been intertwined with every society in history. The response, in both cases, is essentially the same–the seeds of a non-exploitative order exist within every system of exploitation. Our goal, not only as anarchists but as free market anarchists, is to supplant the state with voluntary relations. If the absence of something in historical times, in a society based on division of labor, is a damning challenge–well then, they’re damned as well as we are.

The questions of whether state capitalism is an inevitable outgrowth of the free market, of whether decentralized and libertarian forms of industrial production can exist under worker control in a market society, etc., are at least questions on which we can approach the Left with logic and evidence. They are, for the most part, rational and open to persuasion. At the very least, there is room for constructive engagement. And remember, it is not an all-or-nothing matter. It is possible, if nothing else, to reduce the area of disagreement on a case-by-case basis.

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Capitalism versus Capitalism, Continued

… As Long notes in his Rothbard lecture, the word “capitalism” today contains implicit contradictory market and interventionist elements. Much of the world, and perhaps most Americans, think of it as something other than laissez faire. Quoting Long:

Now I think the word “capitalism,” if used with the meaning most people give it, is a package-deal term. By “capitalism” most people mean neither the free market simpliciter nor the prevailing neomercantilist systemsimpliciter. Rather, what most people mean by “capitalism” is this free-market system that currently prevails in the western world. In short, the term “capitalism” as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.

Carson doesn’t object to the use of the word in the libertarian sense, as long as it is clearly defined. But he is not wrong to use it in the neomercantilist sense. “Hodgskin was one of the earliest writers to use the term ‘capitalism,’ and may indeed have been the first to coin it,” he writes in his book. We saw above how Hodgskin used it. In his rejoinder Carson adds, “Like Benjamin Tucker in ‘State Socialism and Anarchism,’ I advocate an end to capitalism by means of laissez-faire and free markets.” There is a long history behind the use of “capitalism” in an non-free-market sense.

Language and definitions surely evolve. But it is just as surely not the case that “capitalism” has come to mean laissez faire, no matter how hard Ayn Rand and we libertarians have tried to make that happen. The fact is, “capitalism” means, at best, the privilege-laden mixed economy we see all around us. We will fail to communicate if we ignore that fact.

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Capitalism versus Capitalism

While reading the symposium on Kevin Carson’s book, Studies in Mutualist Political Economy, in the latest Journal of Libertarian Studies, I was struck by how upset people can get when someone uses a term differently from how they use it — even if he makes his usage perfectly clear and explicitly draws on legitimate historical precedent. This comes up on at least two occasions in the commentary on Carson. I’ve read Carson’s book, and I had no trouble seeing how he uses the word “capitalism.” Much of the book is devoted to showing that historical capitalism — the real-life mercantilist political-economic system that most people attach that word to — bears only superficial resemblance to the laissez-faire free market, which he favors. Indeed anyone who does not quickly see this in Carson’s work is not paying attention. It is not some obscure point buried under other material. It is the point! Moreover, Carson shows the historical precedent — in the work of Thomas Hodgskin and Benjamin Tucker, for example — for such usage. It shouldn’t be hard to grasp.

Yet two critics can’t or won’t see it. Drs. Walter Block and George Reisman go for Carson’s jugular in retaliation for his alleged confusion of laissez faire with (state) capitalism. Carson handily disposes of the criticism and needs no help from me, but I can’t restrain myself from jumping into the fray. …

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"Vices and individual inadequacy are not the reason people end up without jobs. And the attempt to frame the debate in those terms only diverts us from the real question. Paraphrasing Spooner, the question is not what are people’s shortcomings, but what are their rights?"

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"It’s utterly stupid. The whole point of the economy is not “jobs,” but consumption. The point of human effort itself is consumption. The less effort required to produce a unit of consumption, the better. When a self-employed subsistence farmer figures out a way to produce the food she consumes with half as many hours of labor as before, she doesn’t lament having “less work.” That’s because she internalizes all the benefits of her increased productivity. And when people are free to internalize both all the costs and all the benefits of increased productivity, so that improvements in efficiency are translated directly into lower prices or shorter working hours, they have an incentive to be more productive and work less."

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"No one with a minimum of common sense and intellectual honesty should portray financial operators specialized in extracting rents through unscrupulous legal manipulation as if they were free-market players seeking to enforce fair contractual terms — especially not those who call themselves “libertarians.”"

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Economic Calculation in the Corporate Commonwealth

… The problem is that the state, by artificially reducing the costs of large size and restraining the competitive ill effects of calculation problems, promotes larger size than would be the case in a free market—and with it calculation problems to a pathological extent. The state promotes inefficiencies of large size and hierarchy past the point at which they cease to be worth it, from a standpoint of net social efficiency, because those receiving the benefits of large size are not the same parties who pay the costs of inefficiency.

The solution is to eliminate the state policies that have created the situation, and allow the market to punish inefficiency. To get there, though, some libertarians need to reexamine their unquestioned sympathies for big business as an “oppressed minority” and remember that they’re supposed to be defending free markets —not the winners under the current statist economy.

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"Everything that’s being done in the way of creating a genuine successor society to corporate capitalism is being done horizontally and cooperatively, in open-source software development groups, neighborhood gardens and Permaculture operations, hackerspaces and open-source hardware development groups, community currencies, open-source sharing software, vernacular self-built housing. The most promising models for a post-capitalist society are all based on autonomism, on self-organized peer production based on the commons, on exodus and secession by the producing classes, and on prefigurative politics and the creation of counter-institutions. Compared to the waves of corporate capitalist and neoliberal revolution from above, the waves of resistance starting with the Zapatistas and running through Seattle, the Arab Spring, M15 and Occupy are incomparably more spontaneous and libertarian than the system we’re fighting."

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Definitions and Distinctions

… CAPITALISM: That organization of society, incorporating elements of tax, usury, landlordism, and tariff, which thus denies the Free Market while pretending to exemplify it.

CONSERVATISM: That school of capitalist philosophy which claims allegiance to the Free Market while actually supporting usury, landlordism, tariff, and sometimes taxation. …