Free Market Anti-Capitalism

The following article is by Kevin Carson, the author of Studies in Mutualist Political Economy, an excellent study of what might be called "left-wing libertarianism." Kevin's blog is "Free-Market Anti-Capitalism." With this article, we are initiating a series to introduce readers to economic approaches which are similar to Distributism, even where there remain serious differences. In a day or two, I will post my own critique of libertarianism. [Note: If anyone has any suggestions for other views to include in this series, please e-mail me.]

There has been frequent contention between free market libertarians and distributists.For example, Mises.Org has run several anti-distributist pieces (most notably by Thomas Woods) On the distributist side, John Médaille--who kindly invited me to write this guest post--has in my opinion made the mistake of treating the right-wing stance of Mises.Org as inherent in free market libertarianism as such.

In fact, I believe there is a great deal of potential agreement, as well as room for fruitful collaboration, between distributistism and the left wing of free market libertarianism.

Far too much of the libertarian mainstream leans toward pro-corporate apologetics, and confuses free market principles as such with the interests of big business and the wealthy.I commonly refer to this as "vulgar libertarianism."But this tendency does not follow of necessity from free market principles. In fact, as many of us on the free market left argue, it actually represents a perversion of free market principles.

Most of the mutual animosity between distributists and free marketers comes, not from the inherent principles of either ideology, but from cultural prejudices that have little to do with those principles.On the part of (some) Misoids, this comes from an instinctive affinity for big business and the wealthy, and a desire to defend the concentration of wealth and the rise of wage employment associated with the existing form of industrial capitalism as the products of a free market. On the distributist side, it comes from the unjustifiable acceptance of such vulgar libertarianism as representative of libertarianism as such.

In fact, far from starting out as conservative, the free market liberalism of the early political economists--Smith, Ricardo, and Mill--was a revolutionary doctrine aimed at the abolition of economic privileges, like those of the mercantilists and the Whig landed oligarchy. It is perverse that so much of the libertarian mainstream has since become identified with the modern-day counterparts of the mercantilists and landlords: the giant corporation.

But significant currents of free market libertarianism adhered to the original radical approach. Several radical strands of classical liberalism, including some self-identified socialists, drew radical conclusions from Ricardo's observation that the income of landlords and capitalists came from value produced by labor. The radical direction in which they took their free market philosophy was just this: if the natural tendency of a free market is for labor to receive its full product, then the fact that labor does not receive its full product under existing capitalism can only result from privilege. Capitalism, as distinguished from a free market, is a system in which the state represents the owners of capital and land and intervenes in the market on their behalf. Its enforcement of special privileges keeps land and capital artificially scarce and expensive in comparison to labor, so that labor must pay tribute for access to the means of production. Let, therefore, the state remove its guarantees of privilege, and let the suppliers of land and capital compete in a free market without entry barriers, and land and capital will cease to draw monopoly returns; the wage of labor will rise to its full product.

Some version of this reasoning was adopted as the basis for Proudhon's mutualism, the radical free market thought of Thomas Hodgskin in England, the individualist anarchists in America running from Josiah Warren through Benjamin Tucker (my own chief influence), and the Georgists.

Although he did not adopt nearly such thoroughgoing radicalism, Murray Rothbard (perhaps the most prominent star in the anarcho-capitalist sky) did view the present system as one in which our corporate state uses the coercive taxing power either to accumulate corporate capital or to lower corporate costs. At the height of his strategic alliance with the New Left, Rothbard enthusiastically mined the radical history of Gabriel Kolko and William Appleman Williams for insights that could be incorporated into a free market critique of state capitalism.Today, the Alliance of the Libertarian Left continues to develop this left-wing aspect of Rothbard's thought.

The chief substantive difference between distributists and left-wing free marketers, it seems to me, involves not so much our sympathies or goals as our understanding of causality. To take much distributist rhetoric at face value, it seems to imply that the present concentration of wealth and capital emerged from laissez-faire and is the natural result of a free market, and that some form of state intervention is necessary to prevent wealth from being concentrated in fewer and fewer hands. The left-wing free marketer, on the other hand, sees the natural tendency of the market as egalitarian and decentralist, and sees the present day system of corporate power and concentrated wealth as the result of massive state intervention on behalf of the wealthy and powerful.The left-wing free marketer says the same thing his radical free market ancestors said:remove all state subsidies to big business, and all special privileges protecting it from competition, and the market will operate as dynamite at the foundations of corporate power; let the dynamite of the market operate, and we will see a decentralized economy of small-scale industry producing for local markets, with widespread cooperative ownership and self-employment.

7 comments:

Adrian Saturday, September 1, 2007 at 2:54:00 PM CDT  

Wow, that was pretty good. As a distributist with libertarian sympathies, now I can have my cake and eat it too!

Kevin Carson Monday, September 3, 2007 at 12:53:00 AM CDT  

Thanks for inviting me to post, John, and for the thoughtful comments in your follow-up post as well.

A couple of points.

1) Re externalities, most market anarchists (including the anarcho-capitalist followers of Rothbard) see tort law as a powerful weapon against externalities. So the absence of a "public authority" (in the sense of a body that claims the sole right to initiate force on behalf of the public welfare) obviously does not, as market anarchists understand it, rule out the assignment of civil damages to polluters.

2) I fully agree that a great deal of marginal productivity, under state capitalism, represents simply the power of privileged factor owners. In fact, I made a similar argument for the circular nature of theories of marginal productivity in the value theory section of Mutualist Political Economy. But the power you refer to came from somewhere, and that somewhere is not a free market. I would argue that in a genuine free market, absent the monopoly rents on land and capital resulting from privilege, those concentrations of power wouldn't exist in the first place. The monopoly power that defines the "marginal productivity" of land and capital is the direct result of state intervention in the market to enforce special privileges for land and capital.

Anonymous,  Sunday, September 9, 2007 at 1:33:00 AM CDT  

It is disingenuous to suggest Tort Law as a non-government fix, because as soon as you try to apply it in areas where there is no decentralised consensus and no decentralised set of sanctions, you need an artificial policing institution to apply that fix and you have high policing costs because breaching is not a rare exception but a widespread norm - and these costs create a secondary funding need with its own tendency to create externalities (compare land tenure in England with tribal land customs in colonies, and also with broadcast bandwidth rights). Coase himself allowed for this in his formulation, but Vulgar Coasians often skip it. The "true" fix relies on a mixed strategy that also includes non-government policing (e.g., Trinity House polices pilots in English waters in a mediaeval way) and engineering out the need, i.e. not gratuitously and unnecessarily entering into areas where this sort of conflict can come up (e.g. do not unbundle water rights from more easily owned land rights).

P.M.Lawrence (temporarily anonymous while between ISPs).

taebo training Monday, June 28, 2010 at 8:43:00 PM CDT  

I believe there is a great deal of potential agreement, as well as room for fruitful collaboration, between distributism and the left wing of free market libertarianism.

teeter hang ups Monday, June 28, 2010 at 9:31:00 PM CDT  

Capitalism, as distinguished from a free market, is a system in which the state represents the owners of capital and land and intervenes in the market on their behalf.

teething symptoms Monday, June 28, 2010 at 11:47:00 PM CDT  

The main substantive difference between the free distributive and the left wing of marketing, it seems to me, involves not so much our sympathies or goals that our understanding of causality.

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