May 08 2007
Outing the L-Word Part II: Nature, Power, and Hierarchy
“We have long lived with the notion - undertaken and popularized in earnest from the outset of the cold war and peaking during the Reagan era - that the American economic system is the most natural and God-given, and that the more taxes are cut, public utilities privatized, and business de-regulated, the more closely we approach some state of grace and harmony with the natural order of things.”
By Andrew S. Taylor
5/8/07
While there are many strains and sub-categories of Libertarianism, each with their own distinct epistemology and nuances, there is one common argument that is shared by all: that laissez-faire capitalism is the most “natural” of all economic systems and that, by extension, systems of redistribution such as communism and socialism are the most “artificial.” This argument is sometimes implicit, and sometimes it is quite overt. The purpose of this essay will be to discuss why it is wrong, and to further explain why the way in which it is wrong can lead us to a better, more consistent philosophical construct in defense of social democracy.
It should be clear that, at this point in the game, such a construct is sorely needed. While pundits both left and right are able to appear in various public forums, armed with reams of data and legions of pie-charts in defense of their various positions on pragmatic or empirical terms, only the free-market Right seems able to speak confidently from principle. The mainstream Left, if it is to be truly progressive (which I mean in its most literal sense of aiding human progress), must have a platform and strategy more imaginative than simply waiting for the Right to fail, pointing out the failure, and then “solving” the problem by being slightly less vicious. In the present era, the mainstream Left acquires power when the outrages of the Right leave voters no other choice, and they never retain the confidence of the public for very long because, intellectually, they have become fundamentally vacant. The Left (or those politicians who claim to speak for it) no longer knows why it believes what it believes. The Right does “know,” which is why they, even when in the minority, will retain a hold on the American imagination that the Left has long relinquished.
This question is deeply relevant now. We have long lived with the notion - undertaken and popularized in earnest from the outset of the cold war and peaking during the Reagan era - that the American economic system is the most natural and God-given, and that the more taxes are cut, public utilities privatized, and business de-regulated, the more closely we approach some state of grace and harmony with the natural order of things. The rising and falling of the stock-market - is this not like the ebb and flow of the tides? The cycles of the moon? Do not the patterns of the market resemble the gentle respiration, the self-correcting perturbations of the natural world? In this context, we are meant to see the planned economy as something of a straight-jacket, a cage, a crude and mindless apparatus whose purpose is to prevent the growth of life in all its glorious chaos and serendipity. This transfixing vision has a hold on the discourse and platforms of both our major political parties.
But let us blink away the pixie-dust for a moment, and consider an alternate possibility: that capitalism, even in its most laissez-faire and “de-regulated” form, is every bit as much “artificial” as Stalinist communism. I am not making an argument about moral equivalence here, nor am I using the term “artificial” in some pejorative sense. I mean, quite literally, that both economic systems are invented, planned, regulated, and can only function by means of an imposed consensus, i.e., by force. Neither represents an integration of the “natural order” into the lives of humans, though the idea that capitalism does is extremely powerful. This explains why, in America, we are loath to challenge it directly. (If it seems that, on this last point, I am smearing the mainstream with a rightward brush, consider Clinton’s widespread popularity with the mainstream Left not in spite of, but rather because of an economic policy more rightward than that of any other post-war president).
It makes sense, of course, that proponents of any economic ideology would want to propose that their system is the most “natural.” The west, even at its most modern and secular, is still a culture whose psychology is deeply embedded in Christian mythos, and so our notion of “progress” is often inextricable from the pursuit of Eden on Earth. The struggle towards the ideal economic system, in some sense, registers in the American psyche as a struggle to overcome our spiritually fallen human reality. The old-guard Left is equally guilty of this fallacy, from Rousseau onwards.
The problem for both wings is that no economic system is “natural” because money is not natural. Any economic system is an artificial system, because it must be established and maintained by some degree of force, and relies on a dominant cultural ideology in order to function. Nor can there be any delusion of being able to approach “naturalness” in a structured economy, as if it were some untouchable but virtuously compelling asymptote towards which we might nobly bend. It makes no more sense to talk of degrees of “naturalism” than it does to parse the distinctions between degrees of death. Once you are no longer alive, the possibility of nuance goes right out the window. By the same token, no human societal invention can properly claim greater “naturalness” over any other.
The question in fact is not one of naturalism versus artificiality, but rather one of scale and structure. The moment we begin to organize society according to standardized concepts and abstractions - of which money is one, and the means of distributing and routing it another - we are dealing in artifice. The difference between a capitalist economy (whether ideal, as in the Libertarian model, or actual, as in the American model) and communism as it has been practiced in its many forms, is to be found primarily in the nature of consolidated power, i.e, where and to what extent it is consolidated. Giant corporations and powerful, authoritarian governments internally function according to similar principles of hierarchy. Office politics and government politics use the same social skills and delegation of power through a chain of command. The difference is this - in a capitalist economy, several powerful corporate bodies are rivals, and in statist-communism, one supreme governing body retains an unrivalled monopoly over all resources.
In the modern era, the perceived differences in social permissiveness (free-speech, etc.) between American and Soviet (or Cuban, or even North Korean) society are as attributable to such differences in scale as they are to any supposed cultural tradition of free expression (for, in fact, Americans seem to have internalized so much of the corporate/managerial mindset that self-censorship is possibly the greatest threat to free expression in America today, even and especially among journalists and other framers of public opinion). Much of what remains of our “social freedom” lives between the gaps, narrowing though they are, not currently covered by the numerous corporate and state entities vying competitively for domination. To wit, we might most accurately view American capitalism at the turn of this century as a rivalry between a modest handful of competing totalitarians, whose only check against complete domination over civic life is to be found in the energy they must exert in warfare against one another, and with what remains of our ever-diminishing legal protection against them in the form of government - itself an increasingly corporate entity. The skeptic who doubts this proposition need only consider the almost incomprehensible vastness of energy, resources, intellectual talent, and sheer time and space expended in the realm of pubic discourse by corporations to get every living citizen to think like they do. He or she need only observe how much of this discourse is about the orchestration of dreams, desires, and other preternatural murmurs as opposed to the discussion of empirical fact. And then the skeptic must finally observe that the remaining 1% of this discourse which happens to be somewhat factual is there only because extensive legal regulations still exist which prevent - sometimes - the most harmful and egregious confabulations from passing muster. For now. Even if Bill Gates and Warren Buffet are willing to say “when,” can anyone rationally doubt that there now exist many corporate overlords willing to seize and exploit any opportunity for greater power over society that presents itself? To whom citizenship and fairness are pitiable abstractions for the feeble-minded and weak? Or are we to assume that, Enron and Halliburton aside, megalomania is a true rarity even among billionaires capable of buying influence in the world’s most powerful governments? Of taking over the role of government itself? Considering these question in the light of the evidence presented by our daily lives, by the billboards and commercials and endless parade of banners, by the outsourced “reconstruction” of obliterated societies, does it not seem that corporate propaganda is every bit as concerned with controlling our thoughts as any other totalitarian propaganda? Indeed, is there any other defining characteristic of the totalitarian state than its constitutional tendency, its inherent desire, to be the exclusive colonizer of the human mind?
It seems we can attribute what remains of our freedom to the fact that there is multitude of totalitarianisms currently vying for control. If America were ruled by a single, all-powerful corporation, it would hardly appear different from Soviet Russia. The corporation would have to own everything - housing, the media, all of industry and all intellectual property. It would have crushed its competition from existence. It would exist as a totalitarian state. As the tip of the corporate pyramid sharpens and grows more distant from the base of society, as merger after merger puts a dwindling handful of executives in control, we continue to approach that dreaded singularity known as Big Brother (and take note that the hyper-capitalist society that Russia has transformed into with devastating rapidity is not one iota freer from authoritarianism than it was before).
The peacetime-warfare (i.e. warfare through economy and the control of public opinion) of competing interests is what defines a mixed economy. But, in order to secure a free society, it is not enough that the interests merely compete; they must also be fundamentally different externally from one another in form and function if they are to provide checks and balances against each other. This must also be true internally, between their constituent parts. The human animal being what it is (a beast with a recently developed, intelligent fore brain encasing an ancient, hungry reptilian one), the tendency of human groups to organize into leaders and followers must be channeled into institutional structures of highly limited and uniquely defined power, appropriate to their assigned social function. The business model must be different from the government model, and the government model must be different from the military model. The more that the business, government, and military models begin to resemble one another in function and form - whether through cross-pollination (large numbers of individuals moving from one sector to another via professional connections) or through the sheer domination of one model over all others (via a military coup, a repressive political regime, or a robber baron-style wholesale buyout of government), the more a society veers towards totalitarianism, for the obvious reason that “competitors” whose interests are similar or identical are not capable of providing a system of long-term checks and balances. Put another way, powerful institutions are defined by their socially-enforced limitations above all else, by those rights and responsibilities which they are expressly and constitutionally denied. The lack of such clearly-defined boundaries between power-wielding bodies is what leads to totalitarianism. This is what Eisenhower warned us about is his famous speech, referring to the “military-industrial” complex, and it is why more than a few fascist despots have defined their own polity of choice as “the melding of industry and government” or “capitalism run amok.”
The danger, then, is not that corporations exist, or that the government and its laws exist, or that the military exists. The danger is that each of these bodies, all of which are hierarchical and which wield great power over society as a whole, have a dependably human tendency to seek more power and control over the material conditions of reality than is healthy for society as a whole. It is therefore crucial that society must ever be on guard against the over-indulgence of any one “model” or the liberal intermixture of interests between industry, government, and the military. Each of these elements of society perform crucial functions, but their different external functions increasingly hide internal similarities, and these similarities are the reason that corruption and collusion of power interests across the line of public and private are coming to define our civic life. And, in the era of globalization, it is the business model that it is rapid ascent, with the military model not far behind as the government model recedes back into the pre-dawn horizon.
We must make the following observation of the business model: while businesses may thrive or perish of their own accord in a free society, and the health of business can (though not necessarily) indicate the health of society as whole, the traditional business infrastructure itself is not in any way dependant on social freedom. Instead, the business model is based on rigidly defined hierarchies, much like a comparatively low-stakes military, in which there is a chain of command based on rank, and a pyramid of downwardly cascading delegation of authority. The clerks and low-level managers - the privates and sergeants of the business world - are at best devoted only to the functions of their immediate department, more likely than not existing in a state of rivalry or bitterness regarding the strangers on the upstairs floor. Even fairly small businesses routinely disperse information downwards on a “need to know” basis, keeping the nature of their most important decisions under wraps until the last possible moment - especially those most likely to directly affect their employees, . It is no mystery as to why military training is often regarded as the best preparation in the business world, since the same competence in obeying authority from above and executing it downwards is required in both milieus. The “triumph” of the mixed economy, to the extent that it is a triumph (it is also many other things) is that it keeps its numerous would-be despots and tyrants contained to comparatively small regions of influence, even as within those regions there are endless battles for control of the fiefdom.
This leads us to observe the most important similarity between the military and the business model: it is designed for optimum function in a state of warfare. In other words, it is meant to operate on the assumption that its mortality is daily imminent, that it will be attacked by the enemy/competition at any given moment. It is designed to function efficiently in a permanent mode of perceived existential crisis. Reflection upon the greater meaning of the task is at best useless, and in fact is likely to be counter-productive and inhibit judgment in combat. This psychological stance of fierce “adherence to the task” is necessarily a feature of any social hierarchy. It is, indeed, the whole point of having a hierarchy, which maximizes the number of individuals devoted to the What and How, and minimizes to a tiny, extremely powerful minority those who determine the Why. It is bracingly, awe-inspiringly successful, but it is not democratic, nor is it reflective.
Like the military model, the business model is an effective and powerful tool which in many cases can be wielded to produce, distribute, procure, etc. But you would no more want a government run on a business model than you would want it run on military model, and for precisely the same reason - it is a model which only knows the particulars of the crisis, i.e., the immediate present and the near-term future. It is not a democratic structure, and it does not act with reference to objective social values except to the extent that those values are imposed from without. Both the business and the military exist to perform tasks, and they are designed to do so brilliantly. They were not devised with the intention of defining the public good.
The great problem with the “crisis mode” is that even brute reality has its limits, and if society does not legally intervene, it will be the limits of crisis-mode mentality that will define corporate behavior. Whatever walls are erected to regulate corporate power, the corporation will push against them with all its might, hoping for a crack in the facade. Without laws limiting working hours, setting minimum wage, safety and privacy standards and so on, there will always be someone willing to work for longer and for less, i.e., someone in a greater state of individual crisis. Labor laws, if not set by the state, will instead be set by the limits of desperation. The Libertarian will argue that this is precisely what makes the laissez-faire system “natural,” and this of course is hokum of the highest order, because it completely overlooks the fact that the modern industrial corporation, the technology that fuels it, and even the various forms of monetary currency which fund it are not products of the natural world but of human invention. The modern arrangement between employer and employee does not exist in nature. It is a creation of industry. They are human concepts, a product of our modern and artificial social arrangements.
The Libertarian who argues that laissez-faire capitalism is an expression of natural law does so through Darwinian metaphors. They posit the free economy as a wilderness, in which the most “productive” individuals achieve order and through their own egoistic pursuits raise the standard of living for everyone. For instance: without Thomas Edison, no light bulbs. Edison is likened to the alpha wolf most equipped to thrive in the wilderness. The irony here is that the Darwinian metaphor relies on a non-intentional, pre-conscious system - nature - for its referent. The more accurate metaphor is the exact opposite of Darwinism, i.e., agriculture. By means of a systematized, highly refined, and wholly artificial infrastructure of social institutions based on notions of common citizenship, equity, plurality, and commonwealth, people like Edison, and the many thousands who were talented and industrious enough to work for him (and often be exploited by him), were nurtured into being by society’s careful ministrations. Schools, educators, keepers of the peace and justice, this is why we have the light bulb. We can credit Edison for being the first without worshipping him for it. Another would soon have followed. One thing Darwin was clear on; wheat and corn do not naturally arrange themselves into tidy, efficient rows for hundreds of square miles as a result of natural selection.
Libertarians argue that the government which governs best, governs least. Yet, having read all-too-many Libertarian essays, discourses, rants, and tracts, I never cease to be confounded by the astonishing rarity with which Libertarians question whether, once government has been drowned in its proverbial bathtub, no other system of repression might arise to replace it, despite the overwhelming historical evidence that this is precisely what happens.
Human society requires structure, and where the structure is not defined by some semblance of consensus before-hand, it is defaulted upon, often with dire consequences. It is true that for much of the eighteenth and nineteenth century in America, “big” government interfered little in the affairs of business. However, businesses were small because corporations were strictly limited in size and scope by the exigencies of public charter, hence there was little to interfere with. When granted their own “personhood” at the end of the nineteenth century, all checks on their growth were undone. Unfettered capitalism, as practiced by the British Empire and later by the United States following Reconstruction, was “tempered” only by a rigidly defined and merciless fatalism regarding the prospects for human happiness on Earth. The Enlightenment-era Aristotelian Deism and the philosophically nuanced Christianity of the founders gave way to those chapters of the Good Book found on either side of the savior, those passages in which plagues of locusts and running sores were either reported or predicted. Christ became the sugar-pill by which Social Darwinism, itself a bleakly Old Testament revelation, was swallowed.
This happened, because laissez faire capitalism places severe demands upon its practitioners. A laissez-faire society cannot and would not “liberate” us to live our lives as we see fit, with no one else legally obliged or permitted to account for us but our own conscience. It is not a free-love, chain-smoking, pot-growing, SUV-driving free-for all. Instead, it would create a series of drastic circumstances to which we would have no choice but to submit. A society with no minimum wage, no mandated health-coverage, no restrictions on the work-week, no checks on the predatory practices of credit-card companies, no required labels on food containers and no FDA at all, is a society in which even the most mundane acts of buying food and finding a job become a constant struggle against the wiles of unscrupulous salesmen.
It is worth considering what businesses already have done in the past few decades. They have demanded that their employees submit to drug tests, they have monitored their private emails and internet usage (a courtesy now recently extended to every American citizen), and they have sold personal information (credit ratings, social security numbers, etc.). Furthermore, they have created an economic situation in which one must be a debtor in order to receive an education and housing, and in which supposedly private matters regarding one’s spending habits, previous addresses, and money problems are de facto public knowledge, available for purchase by other creditors. There is little evidence - no evidence - that the major corporations of today have any interest whatsoever in viewing their employees and customers as private citizens with rights. They routinely employ vast armies of lawyers to find loopholes in laws to protect consumers, and employ other, equally vast armies whose sole purpose is to lobby to have those loopholes widened to the point that they swallow all regulation completely. There are no company ethicists on the payroll. Shall we consider a world run entirely by private police forces, private schools, private roads and private prisons, all of whom are free to exclude membership and employment for whatever reason they like? These are all violations of our personal liberty by corporate powers which only a strong democratic government can prevent.
An “excess of government” in a democracy is a logical impossibility, since a democratic government is defined by two essential characteristics: 1) It values the egalitarian over the hierarchical, and 2) its purpose is to enact the will of the people, i.e., to subjugate the hierarchical institutions of business and the military to humanistic value systems and democratic will. A government that has come to insinuate a pernicious level of control over the lives of the citizens it is meant to represent is not an excessively democratic government at all. History will show that such tyrannies are either excessively militarized or excessively corporate. Such governments have retreated from the enlightenment values which seek to free the individual from the strictures of merciless hierarchies. A government that becomes incorporated or militarized, or which succumbs or defers to the corporation or the militant, is a government rapidly regressing into the social psychology of feudalism. The government that refuses to subjugate and regulate corporate power is the government which kicks open the door, welcoming into the corridors of power the divine right of numerous child-kings, despotic accountants, and cool-headed tabulators of human labor.
There is a reason why our society, a century ago, was so fiercely rigid and conservative, and this is it precisely. We were at the mercy of the giants of capitalism. Only God was more powerful, hence He was our only recourse for injustices suffered. This is likely the same reason for the growth of evangelical fundamentalism today. And yet it ultimately matters little whether the worker at the bottom believes in the Supreme Being or not. He should be concerned, gravely concerned, that his masters on Earth, having long lost a fear of the people and their means of representation, know no fear of Him either.
A close examination of the relationship between money and labor will be discussed in part 3.
Andrew S. Taylor’s official website can be found at Fables and Riddles.
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A simply superb analysis…My felicitations. I have only one very small question/quibble with the author position, and that is that I get a bit nervous when I see a “pox on both your houses” slant. Is Andrew erasing all political labels here? He seems to be identifying communism, as was experienced in the USSR, with all its flaws, granted, as the equivalent of fascism and imperial captalism. This has been a longstanding distortion, obfuscation used by liberals and the right—which Andrew Taylor certainly is not. So I’m mifed…My modest point is that while its undeniable that the old Soviet Union was an authoritarian (OK, even “totalitarian”) state system, the meta question still remains who did it serve more? Cui bono? Who pays the piper? You can have a fascist totalitarian system that represses the masses, the poor to privilege the rich. Or you can have a “totalitarian” (by bourgeois stadards of democratic definitions) state that represses the rich, and—on balance—is of benefit to the masses. They cannot be balanced as if they were the same thing.
Wow, so much wrong, so little time. OK, here is a start:
Private property is natural. If you were to find the first caveman, and try to take from him the rabbit he had just snared, he would do his best to kill you. This is not because his government had created a capitalist mentality. It is because it is what evolution requires. He may not know the word private, nor the word property, but he knows the rabbit he killed is HIS.
Trade is natural. It is the only means of peaceful coexistence, and it benefits each person involved. If you leave people alone, and establish no government, and do not give them any ideas except to forbid violence, they will trade with each other. It is what humans do.
Capitalism is the combination of private property and trade. The combination of two natural things must, itself, be a natural thing. Thus capitalism is natural.
Money is not an essential precondition for capitalism. Of course, if there is no money when a society is created, it will be “invented” naturally by the market, as people find something that is of value to almost everyone, easy to carry, and small, and start using that as a medium of exchange. Without government involvement, things such as gold, silver, nails, bullets, tobacco, whiskey, and many other substances or objects of value serve quite well as money. The origin of the term “shot of whiskey” is the custom of trading one bullet for 1.5oz whiskey in the old west. Which one was currency, and which one a product is for more subtle minds than mine to contemplate.
The corporation is not an essential part of capitalism. As a matter of fact, a corporation is a creature of the state. It is a legal fiction created by government. If your precious government does not like the effects of it’s creations, why does it not stop making them? Capitalism will get along just fine with nothing but simple businesses and partnerships. There are some serious drawbacks to the existence of corporations, they are granted legal privileges which normal businesses do not have (e.g. stockholders are shielded from liability in the case of bankruptcy or misdeeds of the corporation). Even Frankenstein was smart enough to stop after creating one monster.
2% of employees make the minimum wage in America. The rest make more. Of the 2%, many work for minimum wage because their jobs give them the opportunity to get tips. So why does every worker in America not make exactly the minimum wage? Because minimum wage has very little to do with how wages are set. A business pays each employee as little as possible. This is obvious. An employee, when he gets paid, then pays the grocer as little as possible for his groceries. The principal is the same. Everyone pays as little as possible for the things they need, and charges as much as possible for the things they produce. So if the employer pays as little as possible, in the absence of a minimum wage, would workers be paid $.01/hour? Or $.01/week? Or $.01/year? No. Why? Because at those levels of pay, nobody would be willing to work. They would be better off starting their own business. And they would.
Imagine, for a second, that we actually had a class system in America, and that those people who had been classified as workers by low were REQUIRED to have a job. What would they do? Well, with labor costs that low, there would be many more jobs available. Why would a business buy chainsaws, when they could hire 10 workers with axes for less money? So you would have a situation at first, where every member of the “employee class” was employed, and there were millions of jobs going begging. At this case, some capitalist, acting purely out of self interest, would realize that he could make more money by paying $.02/hour instead. All of his jobs would be quickly filled, as people quit their $.01/hour jobs, and took $.02/hour jobs. More capitalists, for the same reasons, would raise the rates that they paid their laborers. Some would realize that even if they paid $1/hour, and were assured of as many workers as they needed, they would still make more money then they would make offering $.01 and having no employees to work. Thus wage rates would rise until the marginal productivities of the workers were slightly lower than their marginal compensations. Workers who produced more would be paid more. Workers who produced less would be paid less. Employers would use machinery if and only if they would make more money by doing so: which means their usage of machinery would be governed by the cost of the machinery and the cost of labor. Of course this system would still not be capitalism, since it contains a class system, which capitalism lacks. It is essential to capitalism that workers are able to become managers or entrepreneurs, and that managers and entrepreneurs be able to become workers, in order that all rolls be property supplied with the most talented people at the lowest cost.
The reasons that it looks like “the worker” appears to get a raw deal in America today are several:
1) we have forgotten that we are still emerging from the precapitalist era, and that before capitalism things were much worse. As more and more capital is created, and the demand for labor rises, the price of labor will rise: just like any price rises when demand increases. This has been going on since the birth of capitalism in 1776 (I date it by the publication of Adam Smith’s “Wealth of Nations”, not the Declaration of Independence. They both occurred in that year.
2) The government’s attempts to redistribute wealth has slowed the accumulation of capital.
3) The government’s regulation of (almost) every area of industry had created conditions where only those able to afford great gangs of lawyers (or willing to break the law) can start a business. I started an illegal construction business without any tools or money, and bought tools as I went out of the deposits that customers gave me for work. This worked out quite well. I have never figured out how to run a legal business. I don’t think it’s possible to run a legal business in America.
4) Minimum wages create unemployment.
5) There are thousands of laws which prevent workers from using their earnings efficiently: building codes, taxes of all sorts, license laws, etc, etc, etc.
6) The government has appropriated all unowned land in America and refuses to allow homesteading.
7) They are taught by the socialist teachers in the socialist schools that they are doomed to fail and should not try. This is probably the most important factor.
These are just a few of your errors. I will not stoop to the level of your rhetoric and assume you are lying. I will just assume that you are an economic ignoramus, who should read before he writes.
Rich Paul,
Briefly - your initial points about private property and trade being “natural” as opposed to simply “convenient” on a conceptual level are highly debatable, but even if I accept them outright, the idea that they together define capitalism is simply wrong. “Private property” is not the same thing as “capital.” Please look up the definition of “capital” if you doubt me.
The over-broad definition of capitalism to encompass all forms of trade is a common mishap among defenders of Libertarianism. Most forms of barter and trade do not involve the accumulation of socially expendable profit, nor do they necessarily involve surpluses of resources and labor - hence no capitalism. Even with a monetary system capitalism does not exist without social hierarchies of accumulated wealth. This is an essential characteristic of capitalism by any definition - it is much more that the simple free exchange of valued goods.
Onwards:
-Nothing is “naturally” invented. That is like saying something is “accidentally” intentional.
-Is the corporation a creature of the state, or is the state a creature of the corporation? In fact, I agree with your point that coorporations are technically state creations and I said as much in the essay. I also agreed, in my essay, that the corporation is given far too many privileges. I’m not sure what argument of mine you are trying to refute here.
Most of the rest of your post will be addressed in one form or another when I complete part 3 - “What is Money?”
I will point out that I know several people personally who have started their own businesses legally, and have managed quite well. But I wish you luck in the field of illegal construction. It’s a growing market - I’m sure you’ll do well.
-AST
One of the most serious problems with Libertarian theory is its utterly “ahistorical” bent, which precludes any understanding (and therefore factoring) of the effects of social dynamics. What do I mean by that? Consider the following:
(1) Libertarians seem to forget that a social arrangement extremely close if not identical to their idealized version of a free-market regime existed in various cultural forms over the last 300 years, culminating in the mid-to-late 19th century economic setups seen in Britain, the US and other industrial capitalist nations of the period, all of which then required some measure of government intervention to save the capitalists from themselves, and restore their system to some form of legitimacy and stability.
It’s common knowledge that while FDR was at the time frequently vilified as a closet communist and a traitor to his class, he was in fact a realist who saw in his reforms a way to stabilize society and thwart the rising revolutionary tide stemming from the Great Depression (certainly by no means the first disaster of that kind).
Fact is, the Great Depression did not lift until WW2, bringing in its wake the acceptance of civilian and military Keynesianism as a sure way to stop the downward economic spiral triggered by the periodic crises inherent in the anarchy and underconsumptionist tendencies of the capitalist system.
These Victorian and pre-Victorian free-market societies afforded the capitalists ample rein for their activities, refraining as a rule from entering the economy in just about all aspects of market interactions, except those relating to the enforceability of contracts and the protection of property rights, or the development—at public expense, naturally—of many infrastructural goods (roads, power grids, etc.) without which the capitalist class would have faced much tighter profit margins. (Keynesians themselves were seen for a long time as underhanded agents of Bolshevism.)
The eventual result of consigning society to the whims of the market was the ubiquitous abuses of citizens and labor well documented by Balzac, Dickens and Hugo, to name just a few of the eloquent observers of the period, and formally recorded by even bourgeois historians in what came to be called the “Robber Baron” age. Is Rich Paul prepared to deny these facts?
Later in the US the populist anti-trust movement of the late 1890s and 1910s (Sherman Act, etc.) afforded a momentary respite, but the irrepressible dynamics of corporate growth and political corruption soon nullified their intent. In practice you can’t expect a government owned, controlled and often fully staffed by the capitalists or their minions to legislate against their own central interests. Judging from the calamitous state of affairs we witness today, nothing much has changed since, except that the Government has become a far more open and active partner in buttressing the capitalist economy, socializing losses, for example, and fulfilling zealously its primary task as a coordinating committee for the disparate factions and interests comprising the national and international bourgeoisie. Sounds Marxian? Well, I suppose it is, but find a better way to explain the situation, or a better instrument to determine remedial action, and I’m ready to listen.
(2) Because of the “ahistoricalism” I referred to above, Libertarians are functionally and stubbornly blind to all the nuances and complex contortions experienced by all societies beyond the nomadic clan stage, in other words the problem of organizing economic activity to satisfy the needs of a large nation composed of millions, perhaps hundreds of millions of people.
To begin to understand what these problems actually connote we must look for a moment at the so-called law of “unevenness of economic development” among competing firms.
For a variety of reasons stemming from the diversity of character, personality, location and sheer luck observed in the trajectory of individual human beings, clans, affiliated groups, and families, not all firms fare equally while operating in the same market. Thus, it is inevitable, or, as Rich Paul might say, “natural,” that not all firms will remain small. Some will grow, develop economies of scale and outdo all others, in the process emerging larger and stronger by conquering bigger shares of market or simply combining with some top competitors to form a formidable trust where monopoly conditions will obtain. That this is indeed the “natural” scenario is borne out by the combined economic histories of practically all modern industrial nations. How are such excesses, then, to be curbed? Voluntary restraint? What—aside from a government protecting the interests of the vast majority, the consumers—can even begin to rectify such a huge dislocation? But we know already that government regulation or intromission in the affairs of the sacred market is anathema to Libertarian believers.
(3) Even if we ignored for a moment the inevitable evolution of ALL regimes of “perfect competition” into monopolies and oligopolies as competition devours itself, there’s another problem that libertarians, with their “static” view of history, cannot resolve. And that relates to the fact that certain economic activities, including costly explorations, even in a highly “decentralized” modern society, will necessitate huge aggregations of capital that no single firm or entrepreneur will have or be willing to provide unless society is prepared to offer some specific revenue “guarantee”—in itself a negation of the free market dogma held by libertarians. (This is, by the way, one of the “natural” origins of the joint-stock corporation, exemplified by public utilities producing electricity.)
Lastly, I want to briefly refer to some of Paul’s specific assertions, which would require, as he himself says about Andrew Taylor’s excellent overview, too much time to correct since “there’s so much wrong.” I specifically take issue with audaciously ignorant (and I might add lacking in all social imagination) statements of this sort:
(A) The minimum wage depresses employment, hence forget about it. Disregarding all evidence presented by the real world, Rich Paul proceeds to make up a tale about the beneficial effects of zero regulation in this critical market, forgetting, as crude capitalists are wont to do, that people need a MINIMUM to subsist on, and that a regime in which businessmen reverted to axes instead of using chainsaws (i.e., embracing backward technologies, his example), and employed many more cheap laborers to supposedly accomplish the same task may be neither feasible nor in fact socially beneficial. There are some biological minima, Mr. Paul. People need shelter, clothes, trasnportation, and they have to eat. It’s just too bad that such habits can’t be easily broken.
(B) Before Capitalism things were much worse.
Paul here confuses the beneficial effects of socially organized production which can exist and has existed and does exist under socialism and other social formations, with Capitalism, a regime in which the social relations of production, the way the capitalist extracts the surplus from labor, and therefore the distribution of social income, is skewed to benefit the capitalist class at the expense of every other sector. As is now widely accepted, even by bourgeois economists, the totality of social relations of production constitute the social structure of the economy, which according to Marx determine how incomes, products and assets will be distributed.
While capitalism, in its own blind evolution out of the medieval womb, arguably represented an advance in productivity (social production under one roof, more “rational” organization of labor inputs, and so on), it also introduced a long list of social ills, including the pauperization and exploitation of large numbers of human beings who in previous times managed to live and survive as independent producers operating in an organic community. Thus, perhaps in a more subtle but no less real way capitalism replaced serfdom and compulsory tenancy with wage slavery. My point here is that capitalism is just a stage in humanity’s economic and social evolution. It is not the end of all economic evolution, of history itself, as its apologists and true believers (who normally have a pecuniary or emotional investment in seeing things that way) would have us think. And, as I suggest above, the fruits of mass production—should that be the free choice of a given community, national or regional—are mainly an offshoot of technology, which anyone can understand and implement without the need for an overlord capitalist class grabbing the lion’s share of production, and, as it is amply documented, often distorting social priorities to suit its own plutocratic agendas.
(C) Rich Paul also adduces that,
The American government a “confiscatory” and meddling monster draining the entrepreneurial spirit? What planet are you currently inhabiting, Mr. Paul? If there is anything that distinguishes the American economy is its almost total domination by the corporate class and its lackeys, from the executive boardroom to the media, to the halls of Congress. Like most delusional rightwingers, you argue against a nonexistent ill, a strawman, which your more sophisticated fellow capitalists (the likes of James Baker, for example) would be quick to recognize as mere propaganda.
The US economy is one of the least encumbered by government intervention, and whatever government regulation has come into the books, it has been normally the product of a long and protracted struggle to correct extremely nefarious policies cynically implemented by the business sector. Over the years, US business has mobilized to defeat and boycott all measures protecting workers, consumers, and the environment. Conservatives, Republicans, rightwingers—whatever you may call them—have consistently fought against the 40-hour week, against social security, against child labor laws, against worker compensation and workplace protections…and today oppose the universal healthcare system. The list of their antisocial stances is long and well-documented. As a result we have in America one of the most savage types of capitalism anywhere, buffered only, precisely, by hard-won popular victories. This is not a matter for debate; it’s simply fact, the historical record. I suggest you look it up.
But what about today? In the dawn of the 21st century, self-serving business meddling in society’s affairs continues unabated, now globally. Thus we find in 2007 scores of corporate-funded intellectual prostitutes from “think tanks” such as the American Enterprise Institute, The Heritage Foundation, “media assets” and the like, still busily cranking out papers and appearing on television to deny the reality of global warming, whose veracity has been established beyond doubt by just about every respectable scientific body in the world. Allow me to quote here one of the latest skirmishes in this mendacious saga:
I could go on, but I think the main points I wanted to bring up have been adequately fleshed out in the preceding passages, and in Andrew Taylor’s exposition. Much to the consternation of Rich Paul and his coreligionists, Libertarianism remains mired in a static, abstract and remarkably ignorant view of history and of the essential amorality of business, a position that denies the obvious, which is that human society is in constant flux and development along dynamics dictated by its social relations of production, in other words, its socioeconomic foundation, which, unfortunately in our case, as is still true for most of the world, happens to be capitalism.
Mr. Taylor:
From “Microeconomics”, by William A. McEachern, which was used as the textbook in my last economics class:
capital
The buildings, equipment, and human skill used to produce goods and services
Pure Capitalism
An economic system characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets.
So you are right that not all private property is capital. However, unless you have “private property” combined with a regulatory state which absolutely forbids any productive use of private property or order to produce more private property, then at least some private property, people being what they are, will be used as capital. In this case, since all production is illegal, trade (which is itself productive) must be considered illegal, and therefore the second condition is violated. Thus, private property and freedom to trade are both necessary and sufficient conditions for capitalism. The use of prices to coordinate economic activity is the only way (except for a command economy, which lacks freedom to trade) to coordinate economic activity, and is thus implied by the freedom to trade.
There is no requirement for a “surplus” of resources and labor. I’m not even sure I could define that. I’m not sure that either could ever be “surplus” without eliminating scarcity. That might be possible, with sufficient technology, but it is hardly germane to a discussion of the present. Economics, for the record is “the study of how people use their scarce resources to satisfy their unlimited wants”. This leaves little room for “surplus” anything, unless either the finite nature of the earth of human nature has changed.
Onwards:
- I placed the word “invented” in quotes to emphasize the fact that since money is an obvious solution to a very real need, it would not be a very “inventive” invention, but that it’s use (de facto or de jure) would be inevitable.
- The point is that you seem to be attempting to blame all the effects of “corporate capitalism” (heavily regulated and controlled markets which are dominated by firms with government allocated privileges) on “capitalism” (which can be defined as economic freedom). Don’t let the similar nomenclature confuse you: what Libertarians are fighting for is very different from what Republicans are fighting for. That is why we get no corporate support.
On legal business: Since there are 30,000 pages of tax code alone, I have a hard time believing that you (or they) could possibly know whether your friends businesses are legal. Perhaps it would be better to say they haven’t been caught. It is possible that they comply with each and every one of the many thousand regulations on the books. It is equally possible that they just haven’t pissed off anybody in authority.
Mr. Greanville:
(1) Early America may have been closer to freedom then we are now, in some ways, but was never truly free. For example, government force was used to prevent union activity right up until the moment that government force started to be used to force union activity. Either way is wrong, because neither way is a free market.
FDR would not have been faced with this “revolutionary tide” in a free market, since a free market could never have produced the Federal Reserve, which caused the Great Depression, which created the “revolutionary tide”. The fact that people saw Big Government as the solution to, rather than the source of, their woes is merely a testament to the ability of the government to obfuscate. There had been recessions previously, lasting a maximum of two years and nowhere near as disastrous as the Socialist Depression otherwise known as the Great Depression.
Keynesian economics has been thoroughly refuted, since, for example, the stagflation of the 1970’s is impossible according to Keynesian theory. Also, Keynesian theory neglected to consider the “crowding out” feature of public spending, which refutes it in theory as stagflation refutes it in practice. I don’t know if they were Crypto-Communists, but Keynesians were wrong.
Since society was never “consigned” to the market, yes, I deny the “fact” that such “consignment” caused anything. As for Victorian society, even had it been a pure capitalist society, there would have been serious problems with poverty, due to the immense concentration of wealth that existed before. Capitalism takes time to level such inequities. Neither Socialism nor Interventionism (both of which benefit only those with political power, which unlike wealth, cannot be accumulated outside of channels approved by those who already have it) never will.
A better explanation is that the government interferes with the economy (”socializing losses”, for example, “protecting” businesses and farms from the fact that they are no longer needed or are inefficient, passing anti-trust laws — which basically state that if your price is less than your competitors, you’re dumping, if your price is more than your competitors, you’re gouging, and if your price is the same as your competitors, you’re colluding, leaving no recourse except buying enough influence to be safe from enforcement, which means that economic success will be limited to those who have political pull, not productive ability. Of course any further increase of government to try to combat this will create more government power, which will slowly but surely be subverted in order to reinforce it. None of it is possible without a government which does far more than enforce property rights and protect citizens from force and fraud.
(2) As a computer programmer, I know that there exists a class of problems which are so complex that they cannot be solved with a “top down” or centralized approach. The only way to solve such problems is to resort to the use of “independent intelligent agents” who each look only at a small part of the problems, pursue simple goals, and are able to communicate with each other.
To clarify the metaphor, Socialism is a “top down” centralized approach. Capitalism is a decentralized approach which allows “intelligent agents” (consumers, workers, investors, managers) to pursue simple goals (the pursuit of their interests according to their values without interference from third parties) and to communicate with each other (through the price system, which communicates to producers the value that consumers place on products, and communicates to consumers the cost of producing those products).
It is “natural” that not all firms remain small. Some grow, and develop economies of scale, as well as dis-economies of scale. Eventually, they reach their optimal size, at which the economies gained by growing further are exactly offset by the dis-economies gained, and the firm will become less efficient by either growing or shrinking. This is what curbs such “excesses”. There are a very few markets which can be dominated by a few companies because the size of the market is a small multiple of the output of a firm that has reached this minimum efficient size. This can cause a “dead weight loss” to the economy as a whole. These losses are almost never a large fraction of the economy (estimated now to be about 2% of GNP … compare to government spending which is about 40% of GNP). They cannot occur in markets that provide basic human needs, since humans (and their needs) evolved without large organizations to provide for those needs. If they are a problem, voluntary organizations can be formed to, for example, provide goods on a non-profit or less then maximal profit basis, organize boycotts, and exercise the freedoms that they would lose under a top down Socialist system. An example of this is the development of the Linux operating system. Of course the Microsoft monopoly was created by government through the copyright and patent systems, neither of which is required by capitalism.
(3) It is common to look at, for example, the Tennessee Vally Authority and say “Private Capital Could Never Have Built This”. This, of course, neglects the fact that private capital DID built it. It was just stolen by the government, and then used to build it. It is likely that private capital would not have built the Tennessee Vally Authority, since it is a net loss to the nation. It enables people to live in an inhospitable and economically inefficient manner, by taking from some and giving to others. It makes as much sense as it would make for me to build a rocket, fly to the moon, and then demand that the government make my life there as cheap and easy as it would be on earth. Costly explorations (I assume you mean space) can also be pursued privately, and are being pursued privately, see for example the “Space Ship One” project. They would, of course, be much easier if not crowded out by government spending. It might not happen, however, until basic needs were met, since the most urgent needs of the people at large would generally be met first in a capitalist society, since they would be the most profitable needs to meet.
(A)
Yes, people do need shelter, clothes, and food. Transportation is questionable. All of these things, in an unregulated market, could be provided extremely cheaply. Without the governmental expropriation of unowned land, it could be homesteaded. Without building codes, people could build their own homes (have you heard of log cabins?), at least temporarily, and live in them until they could afford something better. Since people would be able to provide themselves with a bare living, the minimum starting point in order to find employees willing to work for you would have to be more then a bare living. This is not to say that I expect many people to retreat to the hills and farm. Merely the possibility of doing so would be sufficient to ensure that employers would provide a better life than people could provide (or believed they could provide) independently. Think about approaching an Amish (in lifestyle, not religion) with a job offer. How much would you have to offer him? Even if he had no skills which were valuable to you, apart from a warm body and an ability to learn.
Other factors: Without the confiscatory taxation we now experience, people would have 66% more income then they have now (1*60%*166%
(B) Efficient production is impossible under Socialism because of the nature of the system. With no markets, there are no market prices. WIth no market prices, there is no way to compare the value of inputs to the value of outputs and determine whether a thing should be done. There is also no way to compare different ways to achieving a goal to determine which one is most efficient. Thus “socially organized production” in any meaningful sense is impossible under Socialism. See Ludwig von Mises on the “Socialist Calculation Debate”.
There is also no reason that benefits should always be skewed towards the “capitalist class” in Capitalism (since there is no “class” implicit in capitalism, I’ll assume you mean people who happen to own productive facilities at any given moment). It will be so if and only if there is insufficient capital in order to make the most efficient possible use of available labor. The other side of the coin, where there is too little labor to make the most efficient possible use of the existing capital, is an inevitable result as t approaches infinity, provided that the rate of capital formation exceeds the rate of population growth. At that point, rather than seeing workers saving up their money and becoming capitalists, you will see the least efficient and oldest capitalists either taking jobs which would pay more then they make or consuming (the cash value of) their capital in retirement, respectively.
Some other brief points:
I think you’re romanticizing the Renaissance if you think that the serfs were free and prosperous under the feudal and mercantile systems, and suddenly because “pauperized” under capitalism. Sadly, there was no equivalent to Charles Dickens or Victor Hugo, but we know that even at the end of this period, Adam Smith reports knowing women in Scotland who had given birth to 20 children in order to see 1 reach adulthood. Was the time of Dickens, Hugo, and Marx bad? By our standards, yes. Was it that bad? Absolutely not.
(C)
The “40-hour work week” (or the legal punishments meted out to those who permit employees to so choose to work more than 40 hours) is certainly among the things that promote poverty in America.
Social Security confiscates 15% of your income and pays you back an amount equivalent to 0.5% compound interest. This fights poverty more than, say, letting you put your money in a bank account at 5% interest? Or even 1% interest? Or invest it in education? Or start a business? Or do any of the things that free people do with their money?
Child labor is bad, in good times. It’s good in bad times. If your child’s best option is to go to work, then that is sad, but taking his best option is by definition worse.
Worker compensation could as easily be provided by private insurance. This would, of course, be much cheaper if it were provided in an unregulated (and much cheaper) market for medical services. There was a time when you could trade chickens for medical care. Do you have any idea how many chickens you’d have to carry to the doctor today?
“Universal Health Care” guarantees increasing consumption (which implies increasing price), less efficient markets, paying for services you do not want or receive, fraud, waste and abuse far in excess of what we see even in today’s over-regulated health care market. How about taking away the AMA’s power to use the government to destroy competition, instead, and see what happens? It can’t be worse!
So yes, both capitalists (Libertarians) and mercentilist/fascists (Republicans) oppose these programs, though for entirely different reasons.
I won’t debate global warming with you, because your side has declared the debate closed, so there is no point. I will remind you that Newton’s Laws of Motion were once “Scientifically Proven”, before Einstein. I will say that people, be they Global Warming Evangelists, Global Warming Heretics, Theists, Atheists, New Agers, Old Agers, Creationists, Evolutionists, even really destructive people like Socialists and Fascists have the right to think as they think and to attempt to convince others of the truth of their arguments. They just don’t have the right to impose their beliefs on others by force.
As for your last paragraph, yes things change. One of the most valuable things one can do is to anticipate and provided for those changes. This is the job of entrepreneurs. In a free market, they do it at their own risk, with their own money, with no guide except their own minds and no guarantee of success. If they do well, they are handsomely rewarded … not by any arbitrary “system of distribution”, since there is none, but by being prepared and producing things which are more valuable then the raw materials they consume. By doing so, they have made the world much better. By doing so in freedom and with neither help nor hindrance from the government, they could make the world much better than it is. I hope someday they get the chance, because nobody else has a prayer.
It is worth considering, if you think that the victory is Socialism is inevitable, that while Socialists are running to get their supper from somebody else’s work, the Capitalists are running for their lives.
We know what happens to dissenters, to the “too successful”, to the opinionated, and to anyone else who disagrees with your system.
For my money, the final argument is that any system which requires that people who have harmed no one, but merely lived their own lives according to their own conscience, be expropriated, tortured, imprisoned, enslaved and/or killed for their “crime” is unjust even if it would provide a more “egalitarian” distribution of wealth. No end can justify those means.
Mr. Paul,
You might want to read Part 1 of L-word as I’ve already touched on all of this. In fact, the discrepancy between Libertarianism and the Republican platfrom - despite their frequently interchangable terminologies - was the originial springboard for this series of essays. The point here is that “what Libertarians fight for” must inevitably turn into “what Republicans fight for” for reasons having to do with the nature of accumulated wealth and power. And your contention that Libertarians get “no corporate money” is….how can I put this?…so comprehensively false that I’m beginning to think you said it for the pure provocative value. Please visit CATO.org and read “about us.” Also look up their board of directors.
other points:
-You are defining “capital” negatively, and based on an artificially limited hypothetical.
-Standardization of currency is a form of government regulation of the marketplace.
-Surplus of resources and labor is an essential characteristic of capitalism. You seem to be re-defining “surplus” out of existence as a meaningful word. I find this dodge to be rather disingenuous on your part, since anyone who has taken a class in economics - as you say you have - knows exactly what is meant by the word. By your same logic, you must also be mystified as to the definition of “profit.”
Just in case this wasn’t already clear, a “free-market” does not by itself mean a capitalist market. Consider the following - the word “capitalist” predates the word “capitalism” by nearly a century. Ever wonder why?
- Since what Libertarians fight for includes a castrated state with so little power that it is not worth buying, only being concerned with Robbery, Rape, Murder and Fraud, there is no reason that a Libertarian society should ever go the way of an socialist, interventionist, protectionist, or fascist society. If the government is, as Jefferson put it, “bound down from mischief with the chains of the constitution”, and lacks the power to control trade, then there is little point in corporate capture of the government. This is especially true if there are no corporations to effect the capture.
- Corporate money:
In order to maintain its independence, the Cato Institute accepts no government funding. Cato receives approximately 75 percent of its funding from individuals, with lesser amounts coming from foundations, corporations, and the sale of publications. The Cato Institute is a nonprofit, tax-exempt educational foundation under Section 501(c) 3 of the Internal Revenue Code. Cato’s 2005 revenues were over $22.4 million, and it has approximately 95 full-time employees, 70 adjunct scholars, and 20 fellows, plus interns.
Assume that corporations supply 1/3 of the 1/4 of the budget of the Cato Institute which comes from foundations, corporations, and the sale of publications. 2 million dollars. How much to the Democrats or Republicans take in from their corporate cronies? In comparison it approaches zero. But I will correct my statement to “very little” corporate money. As for the board, yes, there are some business people there, but it is hardly a who’s who of Corporate America. The biggest companies represented is FedEx and E*Trade. E*Trade, of course, is a new company which barely avoided being crushed by the entrenched interests while entering the market (using government not some mystical “market power”), and FedEx was nearly crushed by the USPS monopoly the same way. So I understand why both companies are represented. If you start seeing Exxon-Mobile (which is subsidized), WalMart (which uses eminent domain regularly), MicroSoft (which is a copyright monopoly), drug companies (patent monopolies), or anyone else who makes use of the power of the state for anything except to defend itself against the power of the state, I’ll be more concerned.
- Standardization of currency does not have to be done by a government. Anyone who is credible can “coin money” … that is, can either stamp gold coins out of gold with known and attested measures, or issue warehouse certificates for gold. Those are the two simplest forms of money. Fiat money is absolutely an intervention: one of the worst interventions, the one that caused the Great Depression and has reduced the value of a dollar of 4% of what it was in 1913, when the Federal Reserve was founded. In comparison, 1oz of gold in ancient Rome would buy a fine toga, a leather belt, and a nice pair of sandals. The cash value of 1oz of gold in America today will buy a fine suit, a leather belt, and a nice pair of shoes.
- I know what surplus value of trade is, the difference between the amount the customers would actually pay for an item minus the amount that it actually costs to manufacture the item. My econ teacher was leery of the term “surplus value” even in this context, since Marx had redistributed the term into a pejorative meaning, so perhaps he used another word for the concept to which you refer. Profit would be equivalent to “producer surplus”, or the integral of marginal revenue minus the integral of marginal cost. But labor surplus? Not a term I’ve heard. Resource surplus? Nope. Perhaps you could define them for those of us who don’t know exactly what you mean when you use the term.
- The word capitalist predates the word capitalism because capitalist was defined by economists to mean “the person who refrains from consuming some of his product and invests it instead”, and the word capitalism was introduced by Marx as a slur to imply that all the benefits of a free market go to such people. Of course this is false, but Market Liberals, Classic Liberals, Capitalists, Libertarians, or whatever you want to call us adopted the term as Americans adopted the Yankee Doodle slur from the English. It still means free markets and free minds.
capital
The buildings, equipment, and human skill used to produce goods and services
I didn’t reply above to the statement that this is a negative definition of capital. How is it negative, exactly?
RP,
I was referring to your definition of capital, not the definition you quote from the text book. By “negative” I mean you define it only by what it is not.
The board of AEI claims CEOs from Exxon Mobil, Merck, Dow, Cigna, American Express, and a host of others. Heritage foundation boasts the likes of Steve Forbes, Former Microsoft COO Robert J. Herbold, and interestingly, a hoster of former political advisors for Reagan and gov. Wilson among others. You might claim that neither organization is strictly Libertairian, but the point is they use the Libertarian language and discourse in public debate - I must reiterate that this is the topic at hand in this series of essays.
I must also point out a few things I’ve observed in your arguments:
1)Like most Libertarians, you seem to be developing a personally unique defintion of your political movement as suits your argument here. “Anti-corporate Libertarians” are not exactly a widespread phenomenon. (You also seem to be overlooking the ease with which something similar could be created by a few willing rich folk in the absence of goverment regulation).
2) You are not debating honestly, by feigning ignorance of terms commonly known and understood by anyone who had taken an economics class. This tells me that you are simply baiting me. Ditto your respresentation of history. I am not interested in continuing a discussion along these lines. I am always up for an honest debate, but I’m not going to jump through hoops for you, nor do I care to navigate such tautological nonesense as “Child labor is bad, in good times. It’s good in bad times.”
Thank you.
A lot has been said thus far, and I without a doubt side with the critics of Capitalism on this issue. I would like Rich-Paul to explain this comment below by Mr. Greanville:
“One of the most serious problems with Libertarian theory is its utterly “ahistorical” bent, which precludes any understanding (and therefore factoring) of the effects of social dynamics. What do I mean by that? Consider the following”
Mr. Rich Paul, what you have said thus far regarding “pure Capitalism” —as interesting as I found some of it to be— was nonetheless completely divorced from the historical development of the Capitalist system itself, or in other words did not address the uneven process of “capital accumulation” since the dawn of the industrial revolution (hence pls. argue in historical context & not in dogmatic textbook answers, and factoids). Please remove the text book “pixie-dust” and address this question, and if you feel you have already done so please feel free to point out where?
The quote above by Mr. Greanville is at the core of the debate, and without this point we may as well all grab 3 volumes of Kapital and explain why Russia, China, and Cuba were not Communist, because they did not develop in the exact way Marx would have liked them to, according to the original text.
I looked in the indexes of two of my economics textbooks. Neither provides a definition of “labor surplus” or “resource surplus” or any variation thereof (which I could think of). Since you will surely assume I am lying, I’m done here. I can only conclude that whatever economic system you are fighting against, it is not capitalism. Good luck.
Someone, I am not sure who, stated essentially that capitalism steals from the future to create profit in the present. Certainly this is true of hegemonic capitalism on a global basis which has it roots in “American” culture.
Money and capitalism are constructs, or artifices, as stated more elegantly by both Mr. Taylor and Greanville above. They are not natural. The economy, as a social institution is the structuring of what we do to survive - feed and keep ourselves.
So called “traditional economies” are communalistic by and large. There is a very large “commons.” Crops and herds are often “commons,” or significant portions of them are. Private property - largely in the form of ownership of the necessities of life (land, water, other critical resources) imbalances “natural” distributions. It places someone between ones ability to survive and what is needed to survive. That creates power and coercion. Whether that ownership is in the hands of a feudal power, a communist state, or a capitalist, makes little difference. Those who need a place to live must pay the price - to someone. Those who need to eat must pay the price to someone. Whether that be a lord, the state, or the private owner, seems to make little difference. The effort to survive goes not to the individual or to the community.
I must say that I believe that the underlying issue of this control is not the economic system, but the ideology that creates any perception of the “naturalness” of the profiting intermediate who extracts profit/gain and control via the exploitation of others.