Untangling some semantic confusions… (part 2/2)

You may have noted that I used the term “free market” to designate the kind of system that prevails under Anarchy. Many Socio-Anarchists would decry this as being capitalist propaganda. But the State cannot, by its very nature, permit the existence of free markets, because having a free market implies that the agents (be it the individual, the group or the community) set their own rules, and the State claims to be the sole creator of rules.

Even those economists who have most brilliantly defended the free market against the interference of the authorities have usually neglected the parallel consideration that no free market is really compatible with a law-making process centralized by the authorities. This leads some of these economists to accept an idea of the certainty of the law, that is, of precisely worded rules such as those of written law, which is compatible neither with that of a free market nor, in the last analysis, with that of freedom understood as the absence of constraint exercised by other people, including the authorities, over the private life and business of each individual.
Bruno Leoni, Freedom and the Law (bold mine)

The free market and capitalism are therefore opposite concepts. Nowhere is this more obvious than in the fact that the free market cannot contain corporations, while capitalism is founded on the concept of the corporation. The free market allows for competition between agents, with the individual consumer’s values as the guide, while capitalism is based primarily on collusion between corporate entities and within the State (since corporations are part of the State). While it is true that competition exists in capitalism, the benefits of manipulating the law for one’s own advantage means that corporations will use political means more readily than meet demand. Capitalism is based on cooperation between corporations and competition between individuals, while the market is the exact opposite, having cooperation between individuals and competition between organizations. In short, the free market is founded on the free exchange of value, while capitalism is founded on organized coercion.

I consider all Anarchist economic systems to be market systems. Socio-Anarchists propose a number of economic systems which they consider to be non-markets, such as a barter system or a common pool system, but they have yet to prove that any of these are non-market. Their error is in believing that value can only be monetary or goods, and that thus only a system where people directly trade money for goods can be considered a market.

In fact, most of what we value is not directly money or goods: these non-pecuniary values include knowledge, security, relationships, affection, love, social visibility, freedom, self-expression, etc. You can see that these are very important values! By putting them out of the equation, the Socio-Anarchists have a vastly incomplete picture of what an “exchange of value” can be.

Take a common pool system, for instance. Socio-Anarchists would say that a system where a person puts resources in a common pool, and then takes some resources from the pool whenever needed, is not a market system because when the person puts resources in the pool he does not receive value. But this is obviously false: the person who does this gains the important value of being allowed to participate in the system, and the security of being able to count on it in times of need.

In fact, we do have a market process just like this: it’s called insurance. Insurance markets have existed in the past, and while the current insurance area is very clearly not a market, due to being heavily regulated and corporatized, you can be sure that when Anarchy restarts such markets will also reemerge.

Talking about restarting Anarchy, a final word I want to analyze is “privatization.” Socio-Anarchists demonize it, and for good reason: switching any given activity from a government monopoly to a corporate monopoly is not an improvement at all, and in some ways make things worse. But they believe that privatization means taking control away from the people, which is ridiculous. The average State subject has no more control over the government than he does over corporations (that is to say, a vanishingly small amount).

To the Market Anarchist, privatization is not a bad word, if it means “taking things away from the State,” not “giving control to corporations.” Indeed, that is what Anarchy is all about, reclaiming from the State what we legitimately own. But what we observe as privatization within the statist context is not Anarchy at all. As Kevin Carson notes in “Libertarian Property and Privatization: An Alternative Paradigm”:

Privatization of state property, as it is actually carried out is just another form of state capitalist subsidy. In the first state, transnational capital promotes infrastructure projects in Third World countries that are essential to returns on Western capital in those countries, as a way of subsidizing foreign investment there at the expense of native taxpayers. Next, the resulting debt load is used to discipline the country’s government into carrying out policies favorable to Western capital. And finally, under the “structural adjustment” regime imposed by the IMF and World Bank, the country is forced to sell assets (previously paid for in the sweat of the native producing classes) to Western capital at pennies on the dollar.

Privatization also commonly involves a phenomenon known as “tunnelling,” in which politically connected elites have an advantage in acquiring rights to the former state property. For example, besides Western capital, the other group that had funds available for buying up former Soviet enterprises was the Party nomenklatura, which had accumulated ill gotten gains from decades of graft and corruption. (Sort of like the good ol’ boy sheriff who uses labor from the county work farm to staff his plantation, but on a much larger scale.)

The disparity principle applies here, as anywhere else. Privatization only benefits society as a whole if the firms thus constituted or augmented are relatively small and work towards good purposes. Privatizing police, jails or the military only makes the State’s apparatus of exploitation more efficient. Privatizing a vital function, like water, to a big corporation, as seen in the movie The Corporation, can only lead to disaster. At least government monopolies are slightly constrained by their need for popular support, and can only expand so much at a time. Corporate monopolies, on the other hand, have no such constraints, especially in such a vital area as water.

My personal position on corporations is that, once Anarchy is back in place, we could return to the system that existed in the early 19th century, where corporations were set up for a limited period of time, for a specific purpose, and with public approval (but of course it would have to be community approval, not government approval). This system was wiped out because the State cannot resist expanding the power of corporations in order to attract more and more of them, and stimulate economic growth at the expense of its subjects. In an Anarchist society, such incentive would be balanced by the individual’s desire for his own well-being and that of his society.

19 thoughts on “Untangling some semantic confusions… (part 2/2)

  1. cork1 August 4, 2008 at 00:01

    Nowhere is this more obvious than in the fact that the free market cannot contain corporations”

    Yes, it can (for the most part).
    http://www.anti-state.com/mccracken/mccracken1.html

  2. Francois Tremblay August 4, 2008 at 03:10

    Cork, I completely and emphatically reject this line of argumentation. Just because something is voluntary does NOT make it moral. Hierarchies of power can be accepted voluntarily, but that doesn’t make them moral (example: being a racist is voluntary, but it is not moral). I reject voluntaryism as a universal principle.

  3. cork1 August 4, 2008 at 09:59

    1) Define “hierarchy,” and explain how it does not apply to every service (or transaction) on any market, with or without corps.

    2) This means your market will be a pre-industrial nightmare with a very low standard of living.

    GR brutally demolishes that kind of thinking, here:

    http://www.mises.org/journals/jls/20_1/20_1_5.pdf (Scroll down to p.5)

  4. Anarcho-pragmatiste August 4, 2008 at 14:37

    Cork, thank you for this piece of garbage!

  5. Anarcho-pragmatiste August 4, 2008 at 14:42

    Great post François!

  6. Anarcho-pragmatiste August 4, 2008 at 14:47

    The McCraken’s article is a Fountain of Youth for Kevin Carson.

  7. Francois Tremblay August 4, 2008 at 15:06

    “1) Define “hierarchy,” and explain how it does not apply to every service (or transaction) on any market, with or without corps.”

    All trades on a market are egalitarian. No one has his rights controlled by someone else, or under orders to trade in certain ways. A hierarchy implies a non-egalitarian system where some people order around and control (either through rights or tradition) other people.

    “2) This means your market will be a pre-industrial nightmare with a very low standard of living.”

    Since modern industries can be self-managed very effectively, I call total and utter bullshit on that one, cork. You have no idea what you’re talking about. I know this because I used to be like you.

    Reisman is also utterly retarded if he believes that in an Anarchy there’s no way to assemble capital and goods to start productive work without having a hierarchy of power.

  8. freeman August 4, 2008 at 16:36

    Kevin Carson’s current book project tears corky’s #2 to shreds.

    http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html

  9. cork1 August 4, 2008 at 19:08

    “A hierarchy implies a non-egalitarian system where some people order around and control (either through rights or tradition) other people.”

    So let’s say I hire a plumber and give him instructions (“orders”). Is that hierarchy?

    Is selling a service on the market hierarchical? If not, then what’s wrong with big network of people doing just that (a corporation)?

    I’m guessing there will not be football coaches, movie directors, teachers, etc in this non-hierarchical society?

    “Since modern industries can be self-managed very effectively”

    Of any size or complexity? With no division of labor? I’ll believe it when I see it.

  10. David Z August 4, 2008 at 19:34

    “Since modern industries can be self-managed very effectively”

    Of any size or complexity? With no division of labor? I’ll believe it when I see it.

    Probably not of “any size or complexity.” Most of the corporations with which we have become familiar are propped up in one or more ways by a government, either oppressing us, or poor brown people in another country whose plight we can easily ignore…

  11. cork1 August 4, 2008 at 23:39

    “I know this because I used to be like you.”

    Yes, you were way more fun when you were more Objectivist-leaning (and would rip on Steve Kangas, egalitarians, anti-smokers etc). I miss those days. I hope this whole leftie phase ends soon. Eventually, I predict that it will.

  12. Francois Tremblay August 5, 2008 at 03:21

    “So let’s say I hire a plumber and give him instructions (”orders”). Is that hierarchy?”

    I can’t give a plumber orders: I’m not his boss. I’m trading with him on an even keel. If he doesn’t wanna do it, he can just leave. If he wants to tell me to fuck off, he can tell me to fuck off.

    “Is selling a service on the market hierarchical? If not, then what’s wrong with big network of people doing just that (a corporation)?”

    A corporation is not “a big network of people selling a service on the market.”

    “I’m guessing there will not be football coaches, movie directors, teachers, etc in this non-hierarchical society?”

    How are any of these things inherently hierarchical? I teach some people things, but I am not their superior in any hierarchy.

    “Of any size or complexity?”

    What do I care if a corporation can be self-managed? Anarchists are against corporations, remember? Do I even have to mention this, or are you just being obtuse on purpose?

    And yes, you can self-manage really, really big organizations (check out Mondragon, for instance).

    “I hope this whole leftie phase ends soon. Eventually, I predict that it will.”

    Really, cork? This is the best you can do? Using the “it’s just a phase” argument?

    You’re a real asshole.

  13. cork1 August 5, 2008 at 10:35

    How is the relationship with you and the plumber any different than between an employer and employee? Either way, it’s just one person performing a service for another, in exchange for money.

    A corporation is indeed a large network of people exchanging goods and services. Teachers, movie directors, and football coaches could all fall under your vague definition of “hierarchy.”

    “What do I care if a corporation can be self-managed? Anarchists are against corporations, remember?”

    You’re avoiding answering the question. Do you seriously believe that *all* industries and businesses can be “self-managed” by “the workers,” with no division of labor? No matter what size or complexity?

    “You’re a real asshole.”

    The comment was not supposed to sound asshole-ish. It’s just a prediction. I went through a brief leftie phase at one point too. Then I realized I was just bored. ;)

  14. cork1 August 5, 2008 at 10:50

    “And yes, you can self-manage really, really big organizations (check out Mondragon, for instance).”

    It is hysterical that left-anarchists always fall back on Mondragon.

    In the first place, only around half of the Mondragon companies are “cooperatives.”
    http://www.mcc.es/ing/contacto/faqs5.html

    Of those “cooperatives,” very few are run anything like the non-hierarchical utopia left-anarchists want.
    http://news.infoshop.org/article.php?story=20080720142450401

    You should read my discussions with SilentRadical (if you haven’t already). We go over some of the obvious problems with this model.

  15. Francois Tremblay August 5, 2008 at 13:45

    Yes, yes, I know about the degradation of the model. I am well aware of that. You are just being pedantic now.

  16. Belinsky August 5, 2008 at 16:01

    Good post, Francois. I don’t agree with your equation of “Socio-Anarchists” to anarchist communists (which is what you seem to be doing, in my view), but thoughtful analysis nonetheless.

    Also, cork, no one here ever said anything about abolishing the division of labor.

  17. Belinsky August 5, 2008 at 16:03

    (I consider myself a social anarchist but do not fit into the picture you’ve painted of them. There are plenty of social anarchists who support markets.)

  18. Francois Tremblay August 5, 2008 at 16:58

    Well Belinsky, that’s more from personal experience. I could be wrong on that point.

  19. Tristan August 28, 2008 at 08:24

    I suspect some semantic confusion has entered this post…

    I suspect that what I would call a corporation would exist in an anarchy. They would have a voluntary hierarchy of management, but they would be substantially different to the currently prevalent model.

    For a start, there would be more varied arrangements of workers, including those mentioned in this thread.

    There would also be more traditional arrangements, with a boss and workers, simply because some people will prefer to sell their labour like that.
    The key difference being that they will not have state support to operate like that and other methods will be available.

    In other words we’d have true competition in organisation.

    The legal fiction of the corporation as a person would not exist however.

    In my work we have a company which is wholly owned by the two founders. They built the business up and hired more people as they needed to.
    In an anarchy this could still happen. Its true that workers may be paid more and have more power. Two owners would own all the infrastructure they bought and they’d pay themselves from the income of the company. If they paid themselves more than their time and effort is worth then they’d have to skimp on infrastructure or worker pay, putting them at a disadvantage against competitors (however they were organised).

    What would not be possible is all the things which made the current corporate structures possible – the monopolising of land and capital, the deliberate impoverishment of the workers.

Comments are closed.

%d bloggers like this: