Politics/Economics

A Critique of Kevin Carson’s “The Free Market as Full Communism”

Before beginning the critique, a review of the definition of capitalism is in order. “Capitalism” simply refers to that system where all scarce goods (including land and the means of production) are subject to private ownership given they are acquired via original appropriation (first user and claimant of an un-owned good) or voluntary exchange…period. This is also known as the Private Property Ethic. To own something means to have the exclusive right to use, employ, or occupy it free of aggressive interference. Aggression (for the purposes of this critique) is defined as the uninvited initiation of physical interference with the persons or property of others.[1]

“That’s a pretty good description of what the state does under actually existing capitalism, as opposed to the free market. Just about everything we identify as problematic about corporate capitalism — the exploitation of labor, pollution, waste and planned obsolescence, environmental devastation, the stripping of resources — results from the socialization of cost and risk and the privatization of profit.”

Insofar as costs are socialized, the economy deviates from capitalism. Thus claiming that the socialization of costs and risks are drawbacks of capitalism is completely misleading and erroneous. Socialized costs are, instead, drawbacks of the State and they only stem from its interference in the economy, which takes it further from capitalism.

Also what does “exploitation of labor” mean exactly Carson? Of course more obscure and emotionally appealing language used by Left-libertarians…how surprising. Moreover, a certain amount of pollution is inevitable, the goal is to manage but not eliminate it. The best way to manage it is to uphold private property rights which are the essence of capitalism! It’s because the State allows some vague notion of the economy’s “greater good” to trump individual’s private property rights that pollution is permitted to the degree it is. Once more, this is a deviation from capitalism! Carson fails to understand that just because the U.S. economy falls closer to the capitalist end of the socialism-capitalism spectrum, this does not mean that all the current faults of the economy are due to capitalism. In fact every fault he’s mentioned thus far is due to State/Anti-Private Property/socialist interventions! [2]

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“Why haven’t the cybernetic revolution and the vast increases in productivity from technological progress resulted in fifteen-hour work weeks, or many necessities of life becoming too cheap to meter? The answer is that economic progress is enclosed as a source of rent and profit.”

First, the poor of today enjoy far more luxuries than the poor of 50 years ago, and still more than the poor from 100 years ago. Second, it is because of State enforced legal tender laws/central banking, regulations, mandatory licensure, intellectual property laws, taxes, limitations on the freedom of contract, welfare, military industrial complex, outright prohibitions, and legally granted monopolies that goods are not more plentiful and cheap than they are! All of these are State interventions which violate private property rights which are the essence of capitalism. Thus, it is due to the deviations from capitalism that many goods and services are as expensive as they are relative to a truly free market capitalist environment! Yes Left libertarians, capitalism and free markets are not mutually exclusive! [3]

In fact, Jeff Peterson II has this to say about the free market’s relationship with capitalism:

“Per Say’s Law, production is always an antecedent to consumption — you need to produce in order to consume. Production on any scale compatible with life requires capital, which is man-made (doesn’t “grow on trees”). To have an incentive to produce capital you have to be able to make use of it and/or sell it, and for either of those you have to be able to control it — same for the incentive to buy it. To have any confidence that you will still control it tomorrow, you need a legal regime that assigns you exclusive rights to control it — that is, you need private ownership of the means of production” [4]

“The natural effect of unfettered market competition is socialism. For a short time the innovator receives a large profit, as a reward for being first to the market. Then, as competitors adopt the innovation, competition drives these profits down to zero and the price gravitates toward the new, lower cost of production made possible by this innovation (that price including, of course, the cost of the producer’s maintenance and the amortization of her capital outlays). So in a free market, the cost savings in labor required to produce any given commodity would quickly be socialized in the form of reduced labor cost to purchase it.”

What Carson describes here is a capitalist process. He describes it fairly accurately, yet labels it erroneously by calling it a socialist one. Let’s define Socialism: “Socialism is a social and economic system characterised by social ownership and democratic control of the means of production.” [5] What did the process of market actors being attracted to profitable ventures, which precipitate an increase in the supply of said good/services until profits are driven towards zero, have to do with “social ownership or democratic control of the means of production”?! In fact each of the competitors and the initial entrepreneur presumably owned their respective means of production privately! The community didn’t get together and vote how they should be used! Rather, the entrepreneurs saw that a given service was profitable and employed their resource accordingly (of course the original entrepreneur was innovative enough to see what the consumers would want before they knew they wanted it)!

“Only when the state enforces artificial scarcities, artificial property rights, and barriers to competition, is it possible for a capitalist to appropriate some part of the cost savings as a permanent rent”

What is Carson talking about? All aggressive barriers to competition are deviations from capitalism, not effects of capitalism! I’m assuming artificial=aggressive or something which deviates from the private property ethic listed above.

“That form of enclosure, via “intellectual property,” is why Nike can pay a sweatshop owner a few bucks for a pair of sneakers and then mark them up to $200. Most of what you pay for isn’t the actual cost of labor and materials, but the trademark.”

Again “intellectual property” is a deviation from legitimate property rights which only apply to scarce goods. That is to say, enforcing IP would entail a corresponding abridgement of someone’s right to do what he will with his own private property (above and beyond not using it to aggress against the persons or property of others). Hence, IP constitutes a deviation from the Private Property Ethic and capitalism, as opposed to being an effect of capitalism as Carson insinuates. [6]

“But artificial scarcity, based on the private enclosure and holding out of use of vacant and unimproved land, or on quasi-feudal landlord rights to extract rent from the rightful owners actually cultivating arable land, is an enormous source of illegitimate rent — arguably the major share of total land rent.”

In this context Carson uses the term “artificial” in a different way than he had previously, i.e. he is equivocating. Whereas before he apparently likened it with aggression and statist interference, now he’s simply likening it to merely holding land as savings though not actively improving upon or occupying it. So long as an individual was the first to use and claim/originally appropriate a plot of un-owned land, it becomes his. A practical condition of this is that he has to create a physical effect on the land that a 3rd party can recognize as evidence of his relation to said land…this is what constitutes a “superior objective link” relative to any latecomers. Exactly what kind of a physical mark must be made is subject to customs which may develop organically in the market or from the policy a given title registry implements…etc. The point is, once ownership has been established there is no sound reason that the owner must meet any additional burdens (such as occupying or using this land in some way) in order to retain said ownership. At that point his title will only be relinquished if he explicitly revokes it, exchanges it, dies without a named heir, or transfers it as a form of restitution for a previous act of aggression. Finally, Carson says most landlord/leesee relationships are “illegitimate”..i.e. Carson favors limitations on the freedom of contract. [7]

“But while demanding the socialization of rent and profit may be frowned upon by capitalists as “class warfare,” they’re totally OK with the socialization of their operating costs.”

This constitutes yet another prime example of false equivalence so often employed by left libertarians. A given “Capitalist” may prefer to have his costs socialized if possible, but this does not mean that “socialized costs” are in any way a characteristic of capitalism. He is conflating the term “capitalist” (someone who privately owns some means of production) with the economic system “capitalism” which has fixed characteristics as defined in the beginning of this critique.

“In a society where waste and planned obsolescence were no longer subsidized, and there were no barriers to competition socializing the full benefits of technological progress, we could probably enjoy our present quality of life with a fifteen-hour work week.”

Again more equivocation from Carson. The way in which he uses “socializing” here is not the same as the term is used in an economic context as in abridging private ownership of the means of production in favor of “social” ownership. (whatever this means…is it supposed to include everyone in the world, on a continent, in a 30 mile radius…etc.?)

“Taken together, these two outcomes of free market competition in socializing progress would result in a society resembling not the anarcho-capitalist vision of a world owned by the Koch brothers and Halliburton, so much as Marx’s vision of a communist society of abundance”

I am unaware of any Anarcho-capitalist who has a vision of a world “owned” by a small handful of mega corporations or elite families. In fact there are characteristics of capitalism which place natural limitations on the size of firms. Moreover, a monopoly is not merely a single provider of a good or service (as far too many believe), it is instead an exclusive legal privilege to produce a given good or service. Such privileges are necessarily antithetical to capitalism, as they entail an abridgement of people’s private property rights. [8]  Final Grade: Epic Fail.

Source of the article critiqued:https://c4ss.org/content/12561

References:

1.)  Hoppe, “Property, Contract, Aggression, Capitalism, Socialism” A Theory of Socialism and Capitalism http://bit.ly/1Nc4Tzo)

2.) Rachels, “Environmentalism” A Spontaneous Order http://amzn.to/1BWIb5C

3.) Hoppe, Marxist and Austrian Class Analysis http://bit.ly/1Lyl2Ke

4.) Peterson, Anti-Capitalism, A Love Story http://bit.ly/1MDxgVF

5.) https://en.wikipedia.org/wiki/Socialism

6.) Kinsella, Against Intellectual Property http://bit.ly/21f00vA

7.) Hoppe, “On the Ultimate Justification of the Ethics of Private Property” The Economics and Ethics of Private Property http://bit.ly/21f0amN

8.) Rothbard, “Monopoly and Competition” Man Economy and State http://bit.ly/1MBrwvy

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