no third solution

Blogging about liberty, anarchy, economics and politics

The “C” Word

July 9th, 2012

For (probably not) the last time…

The liberty movement would be in a far better place if they stopped clinging to “capitalism”, if they stopped trying to rehab the word “capitalism” and if they stopped trying to convince the rest of the world that the Randian “Unknown Ideal” version of “capitalism” — despite being predated by at least a century — is the one and only true definition of “capitalism”.


Extra Credit: Free Market Capitalism is an Oxymoron

Free Market Rhetoric

October 29th, 2011

There is a fundamental discord between people who are nominally for “free markets”, and those against, and because there is literally no common ground between them, indeed there is often a void where common ground should be, no forward progress is made.

Fortunately, both of these positions are wrong. 

  • On the one hand, the free market’s most vocal supporters tend to ignore the finer points of free market theory, like the part about how free markets tend towards a diminution of rents, and how profits accrue to all factors of production.
  • On the other hand, opponents imagine more “freedom” only for the exploiters. They believe that “free markets” means that you are justified to do whatever you want as long as you can get away with it, and unable to imagine any alternative to the status quo, they often conclude that a free market will be worse in every way (unless you’re among that 1%).

The opponents are right to believe in this Wild West caricature because it’s exactly what will happen if you start gutting the social safety net without doing anything to fix the underlying problems. Whether unknowingly, the free market advocates ‘rhetoric is ultimately perceived as either justifying, or apologizing for, the status quo: they talk plainly about gutting social safety nets, with nary a mention of the underlying inequalities that make them necessary!

Unfortunately, it’s difficult to show people what they can’t see.

Capitalism isn't working

Another world is possible

Opponents often point to the present, and say “Look at the free market failing…”. Except, it’s not a free market. And it doesn’t become one just because you call it that. Then again, the proponents usually don’t have a response to this, other than parroting some “invisible hand” argument about how the market will magically self-regulate if only you get rid of all the regulations, first. But it also doesn’t magically become a free market if you haphazardly start stripping away regulations, either.

So both parties are working on a flawed model of what constitutes a free market.

Discourse, not Dogma

And although there is something to the “invisible hand” argument, it kinda sorta presupposes a free market in the first place. It is not a trump card and you can’t just pull it out every time someone challenges your position.  If you don’t do anything to remedy the “too big to fail”, if you don’t do anything to remedy the “captured regulators” or the “lobbyists”, etc., you’ve created a free market in name only, which is NOT a free market.

wall street bull

these guys have no place in a truly free market

It’s not sufficient to just take away those things that interfere with a free market if you intend to leave in place all of the benefits (and handicaps) accrued under the old system of exploitation. You can’t leave untouched all of the institutional inefficiencies, corruptions, cronyism, all the accrued benefits from years or decades of favoritism & protectionism, etc., and expect the market to function at all like a truly free market.

An Example

I hope to demonstrate that the removal of the immediate condition is not sufficient to cure the accumulated injustices of centuries of abuse and subjugation. Sometimes it is easy to illustrate a point by way of example; consider the aftermath of the Civil War:

The institution of chattel slavery essentially dissolves overnight but the plantation owners keep their plantations, their fancy lifestyles, their estates, acres of land and livestock. Freed slaves were left with virtually nothing (since all that was theirs had previously been denied them). So the freed slaves end up as sharecroppers or very poorly paid workers — essentially slaves — having nothing with which to bargain but their labor, they are compelled by hunger to exchange their labor for whatever pittance their former masters will offer.  Thus, injustice continues in a slightly different form

See where I’m going with this?

It is indisputably wrong for someone to argue that this outcome is the fault of the free market.

It is also indisputably wrong for a free market advocate to suggest that this is the natural result of a free market.

Yet almost every discussion of “free markets” centers around these two obviously and irrevocably incorrect assumptions.



“Big Business” is the Problem

July 27th, 2011

If a workplace needs to be unionized, it’s already a problem that “seizing the means of production” can’t fix. The problem is “Big business” no matter who’s in charge and that’s why syndicalism or trade unionism doesn’t do it for me* . I object to any organization the aim of which is to monopolize a sector of the economy (and a very large union of would do precisely that).

If the unions are meant to be a counterweight to state-granted corporate privilege, the proper recourse is repeal, revoke, or nullify all the privileges in order to facilitate the the liquidation and distribution of the wealth they have amassed**. Whether this distribution may be achieved to some degree through the state’s legal apparatus is suspect, since the “law” is the capitalists’ primary instrument of oppression.

Although I am sympathetic to many labor causes, and not opposed to their means, I have reservations about their efficacy in achieving desired results.  As an equality of means brings about equality of opportunity, the real challenge is to equalize the means and I’m not convinced this happens.

  • If successful in “seizing”, the largest unions would control the “means of production”, employed thereafter for the benefit of themselves. They may be tempted to restrict membership to ensure higher wages, and by restricting membership, the union controls access to the means of production in much the same way that the capitalist-owner does: keeping employment safely out of reach for many.
  • Since all means of production are collectively held, a dissatisfied member can’t just walk off on his own because he can’t take his “share” of the cooperative capital when he leaves. Nor can he, or a group of others decide they are unhappy with the union’s stewardship, they probably can’t instigate a micro-“strike” and claim the product of their labor, or a homestead right to a share of the collective assets.
  • The individuals would be in a position much like the majority who live hand-to-mouth today: bound to the occupation by the necessity of hunger.  And if they choose to leave, they would leave with nothing***  whereupon they would ascertain that the only thing they have to negotiate with is their own labor power; they would be at the mercy of others.

On the contrary, in a free society with the means more-or-less distributed, the average man being unhappy with his station should have options:

If he has acted wisely and put some money away, if there is freedom to buy, sell, loan and borrow, he should have the financial wherewithal take some modest risks: he can go off on his own or join with co-workers and form a competing enterprise or start a new one altogether. Or he may choose to work for someone else; since there would be no workplace large enough or economically powerful enough to exert appreciable pressure on the markets for goods or for labor. In short there should be plenty of opportunities one could pursue.

What I hope we may one day obtain is an environment where no sector of the economy (including labor) is dominated by oligopoly.

I am all for abolishing the current order of things, but I do not want to simply put the power in another party’s hands (no matter which flag they’re waving). Instead I want to abolish that concentration of power which is so easily abused.


I am not suggesting  there is anything inherently wrong with labor organizations. Nor am I arguing against tactics advocated by labor organizations like the IWW (direct action, “If you need a break, take one”, etc.) nor am I fundamentally opposed sabotage, etc. If you want to argue for a syndic or a co-op of a dozen people or so who have a small shop and manage that endeavor “collectively”, be my guest. I am absolutely not debating that.
** In order to make an omelet you have to break some eggs. This is probably going to be a messy process.
*** Barring of course, any prior arrangements which may provide for severance pay, or other remuneration based on length of service, etc.

no third solution

Blogging about liberty, anarchy, economics and politics