Government Authority, Incompetence, and SARS-CoV-2

Posted on May 4, 2020 by Reid Mukai

U.S. Army National Guard photo by Edwin L. Wriston

By Jason Brennan

Previously, I’ve commented on how the data we are using to estimate the danger of this disease are extremely poor. Until very recently, for the purposes of estimating the danger, we have been testing the wrong thing (current shedding of the virus) the wrong way (mostly testing people who present themselves as sick). When you read that as of March 3, the WHO estimated the death rate of COVID-19 cases at 3.4%, you have to keep in mind they had non-random testing, testing only for current infection, and testing based almost entirely on sick people presenting themselves for care. The result is that there is severe selection bias which pushes the hospitalization and death estimates upward. The big question is by how much. None of us would be able to publish a paper in a third-rate econ or poli sci journal with such bad data; the editors would desk reject us. Nevertheless, governments around the world used such estimates to impose economic misery and dramatic restrictions on civil liberty on the masses.

On top of this, as economists and other math savvy people look into epidemiology, it’s becoming clear that the models they use are quite poor, because they have difficulty with endogeneity and with variance.

Shortly, I suspect my friend Phil Magness will go public with an article about how many of the epidemiological experts you see on TV and whose models are being used to create government policy have a long (20-30 year+) history of making dramatic and sometimes apocalyptic predictions about the dangers of past diseases, predictions which never came true, even though in the past governments did little to stop those diseases.

How does this bear on politics?

In Against Democracy and elsewhere, I’ve argued that competence is a precondition of political legitimacy and authority. The Competence Principle says:

It is presumed to be unjust, and to violate a citizen’s rights, to forcibly deprive a citizen of life, liberty, or property, or to significantly harm her life prospects, as a result of decisions made by an incompetent deliberative body, or as a result of decisions made in an incompetent way or in bad faith. Political decisions are presumed legitimate and authoritative only when produced by competent political bodies in a competent way and in good faith.

My main argument for this principle is by analogy to clear cases. I ask readers to imagine a capital murder trial. A defendant is accused of first degree murder. If found guilty, he will lose his property, his freedom, and possibly his life. Imagine the jury finds him guilty for any of the following reasons:

Ignorance: They simply ignore the facts of the case and flip a coin.
Stupidity/Lack of Understanding: The case requires sophisticated reasoning and analysis, which they lack the capacity to do.
Maleficence: They find him guilty because they hate people like him (e.g., suppose he’s white, rural working class Republican and they are average university professors).
Selfishness and Conflict of Interest: They find him guilty because they personally benefit from him going to jail or being executed. (E.g., suppose they own a rival business, or suppose they would get fame and fortune for being the jurors who put him away, regardless of whether he is actually guilty.)
Irrationality: They pay attention to the information, but process it in highly irrational ways, beset by a wide range of severe cognitive biases.
Conformity and authoritarianism: They find him guilty because they have a political bias to defer to state power, to do what is expected of them regardless of whether it’s right, or to be seen as doing something/anything during times of crisis.
Misinformation: The jurors decided properly in light of the information they had, but it later becomes clear the information was extremely poor, misleading, or false.

If we learned the jury found him guilty for any of this reasons, we would hold their decision is unjust. Moreover, it would be wrong to enforce their decision. The defendant could demand a retrial, and in many states, would be entitled to one.

I think this point generalizes to many political decisions beyond jury cases.. When a person or group makes a high-stakes decision, imposed involuntarily and through force upon others, a decision which can greatly alter people’s life prospects and deprive them of property, happiness, freedom, or life, that person or group must be competent in general, and must make that particular decision competently and in good faith. If they fail to do so, then their decision is presumed to lack authority (there is no obligation to obey it) and legitimacy (there is no moral permission to enforce it).

Now apply this to government actions on the basis of the COVID-19 disease.

As a philosophical matter, it’s easy to show that in principle, governments can restrict our freedom to stop the spread of disease. For instance, in The Journal of Medical Ethics, I have a paper arguing that governments can force us to accept vaccinations, not for paternalistic reasons, but to stop individuals from imposing unjustifiable risk of disease upon others. At his blog, anarchist libertarian powerhouse Michael Huemer says something similar:

Of course, what counts as unreasonable risk is open to debate. It’s going to have to do with the probability of harm, the total magnitude of the threatened harm, and how good one’s reasons are for imposing it (see previous post on meat & disease risk).

That’s the core of the libertarian justification for disease-prevention measures. Any individual who is at risk of carrying a communicable disease, such as Covid-19, is posing a risk of physical harm to others when he interacts with them. If the risk is ‘unreasonable’ (in light of the probability, magnitude, and reasons for imposing), then those under this threat would be justified in using coercion to protect themselves from the potential physical harm. Since individuals could justly do that, they can also delegate it to the state to do that (if you accept the state as legitimate in general).

The question of whether governments may in principle do what they are doing is not terribly difficult. But appealing to abstract principles is not enough to justify their actions. We need to know whether they made these particular decisions competently and in good faith, on the basis of good information. In the same way, it’s one thing to show in the abstract that states might have the right to punish criminals, but that doesn’t suffice to justify any particular jury decision. We still need to know whether the particular jury acted competently and in good faith, on the basis of good information.

This brings me to the upshot. Governments around the world appear to be relying on epidemiological models which suffer from serious endogeneity problems and which we know do not handle individual variance well, and which are constructed on the basis of the wrong data collected the wrong way. They thus appear to be deciding incompetently, on the basis of bad information. Whether they are acting in bad faith, I leave to you. (I would like to remind you, however, that we have plenty of evidence they often act in bad faith. For instance, bad faith is pervasive in the US criminal justice system.) Go ahead and remind yourself of your analysis of Bush’s decision to invade Iraq, or whether the Patriot Act and the surveillance regime it created is justifiable. While you’re at it, remind yourself of all of those papers published in political science showing that people have a bias toward authoritarianism during a perceived crisis. Surely, that bears on you now, no?

I very much doubt that there are “secret data” of the right sort collected the right way which all governments around the world are holding from us. Instead, they made dramatic decisions, decisions which have little effect on rich intellectuals like me, but which impose severe pain and suffering upon the poor. It’s looks to me like they are blatantly violating the Competence Principle and their decisions presumptively lack authority and legitimacy

The best argument against this position, I think, is something like this: We are in the midst of a possible humanitarian disaster, which could potentially kill millions or tens of millions. Leaders had to act fast on the basis of poor information. They saw what was happening in Italy and took extreme measures.

Maybe, but some rejoinders: First, governments could have collected better data earlier, before they shut the world down. Second, few governments are trying to collect good data now. It’s one thing to shut down in an abundance of caution, but they should subsequently do mass, randomized testing for antibodies so we can determine the real infection fatality rate. (That is, collect the right data the right way.) Why isn’t this being done en masse? Third, the argument that we are in the midst of a potential disaster and so had to act out of an abundance of precaution relied on things like the WHO estimates and other early models and estimates, all of which relied on the wrong kind of data (testing current viral shedding) collected the wrong way (mostly testing people who present themselves as sick). As I’ve been saying, none of you would get a paper published in a third-rate journal with that kind of data, and if I presented a paper using it, you would tear me apart. Fourth, whatever plausibility this argument may have, what about the contrary argument that the bigger the stakes, the better the information you must have?

Note well: I am not a “COVID-19 skeptic” or a conspiracy theorist. I don’t think there is a conspiracy; I just think there is mass government failure. I am not skeptical of the dangers of COVID-19; rather, I am uncertain how bad it is because the early work relied upon poor data and poor research methods.

Of Course Billionaires Shouldn’t Exist

Posted on March 17, 2020 by Reid Mukai

By HipCrime Vocab

There’s apparently a row over whether billionaires should exist. That is, whether or not billionaires should be a thing in our society.

What a stupid question. Of course billionaires shouldn’t exist! But the reason has nothing to do with Socialism.

Rather, under a properly-functioning free-market capitalist system, billionaires shouldn’t exist. And that would have also been the opinion of the “Classical Liberals” so favored by the Right these days: Adam Smith, David Ricardo. Thomas Malthus, John Stuart Mill, and so on.

Billionaires are a sign of market failure.

Let me say that again: billionaires are a form of market failure! You cannot simultaneously be both pro-Market and pro-billionaire.

I’m amazed at how few people get this!

In a truly competitive market, excess profits would be competed away. Someone would come along and undercut outsize profits. That’s exactly how the Classical Liberals assumed free markets would work. In this, they saw markets as instruments of greater equality, not inequality, and certainly not as a way to construct a new and improved aristocracy even more powerful than the old one.

The Classical Liberals wrote in opposition to the main power centers of their day: aristocratic government and chartered monopolies like the East India Company. They didn’t see the purpose of their writings as defending privilege and power. One can dispute the end results, but that was not their goal. Quite the contrary. The idea that a single, solitary individuals would possess more wealth than the kings and pharaohs of old under a functioning free market system would have been unthinkable to them.

In their time, much of the national wealth was monopolized by a landed aristocracy who gained their wealth through disproportionate ownership of the country’s productive land. The other major source of wealth came from large joint-stock companies that were granted royal monopolies due to their political connections. Yet another source of unearned wealth came from the holders of bonds (gilts)—essentially loaning money to the state and getting the government’s tax revenues funneled to them via interest payments.

Classical English Liberals felt that competitive markets would do away with a good portion of the unearned and unproductive wealth common in Great Britain at the time. They believed that “free and open” markets would channel wealth and activity to more productive ends. That is, they would break up large pools of wealth and unproductive money. The kind of obscene fortunes that they saw in their day would no longer be possible thanks to competition, they assumed, and that British society would become more equal than it was under landed aristocracy, not less. We can dispute their logic (and I have issues with it), but I think we can safely say that this is what they believed, rightly or wrongly.

An inherent part of their conception of free markets is the possibility of failure. Unproductive or inefficient businesses would be competed away, they assumed, and the fortunes earned through such activities would disappear. But that is not the case today. Billionaires have so much money they can literally never lose it! That’s not capitalism, that’s aristocracy. I read recently that someone like Bill Gates literally cannot give away money to his pet causes fast enough to reduce his fortune even if he tried. In fact, he’s grown wealthier even while giving away billions.

The important point about [Adam] Smith’s system, on the other hand, is that it precluded steep inequalities not out of a normative concern with equality but by virtue of the design that aimed to maximize wealth. Once we put the building blocks of his system together, concentration of wealth simply cannot emerge.

In Smith, profits should be low and labor wages high, legislation in favor of the worker is “always just and equitable,” land should be distributed widely and evenly, inheritance laws should partition fortunes, taxation can be high if it is equitable, and the science of the legislator is necessary to thwart rentiers and manipulators.

Political theorists and economists have highlighted some of these points, but the counterfactual “what would the distribution of wealth be if all the building blocks were ever in place?” has not been posed. Doing so encourages us to question why steep inequality is accepted as a fact, instead of a pathology that the market economy was not supposed to generate in the first place.

Yet today the people who call themselves the heirs to “Classical English Liberals” emphatically defend the existence of billionaires and extreme inequality at every turn. Such people are not pro-market or pro-capitalism as they like to portray themselves; they are simply pro-wealth, or—to use a less complementary term—bootlickers. They are not defending capitalism or Markets; what they really are defending is oligarchy, power, privilege, and hierarchy. As Corey Robin opined, “The priority of conservative political argument has been the maintenance of private regimes of power,” with all the soaring rhetoric about markets and freedom being just a smokescreen and a cover for defending hierarchies and power imbalances. Their defense of billionaires is proof positive of this. This is true of presidential candidates as well.

The existence of obscene fortunes and extreme inequality are not a sign of capitalism’s success; they are a sign of capitalism’s failure.

This is pointed out by Chris Dillow:

“I don’t think anyone in this country should be a billionaire” said Labour’s Lloyd Russell-Moyle yesterday, at which the BBC’s Emma Barnett took umbrage. The exchange is curious, because from one perspective it should be conservative supporters of a free market who don’t want there to be billionaires.

I say so because in a healthy market economy there should be almost no extremely wealthy people simply because profits should be bid away by competition. In the textbook case of perfect competition there are no super-normal profits, and in the more realistic case of Schumpeterian creative destruction, high profits should be competed away quickly.

From this perspective, every billionaire is a market failure – a sign that competition has failed. The Duke of Westminster is rich because there’s a monopoly of prime land in central London. Would Ineos’ Jim Ratcliffe be so rich if pollution were properly priced, or if his firm faced more competition?

The Right’s Mega-Rich Problem (Stumbling and Mumbling)

How is this rectified? How do they square their supposed love of fair competition and free and open markets with the presence of outsize fortunes?

They don’t.

And the sad thing is how many people buy into their nonsense. Everyone seems to think that a defense of billionaires is a defense of capitalism.

It’s not. It’s the opposite.

What is a billionaire?

Billionaires are only made possible through monopolies and tollbooths. Period. And such monopolies are more possible than ever before thanks to technology.

This is argued by Matt Stoller, an expert on monopolies, in a post entitled, What Is A Billionaire?:

Most people think a billionaire is someone with a lot of money, a sort of Scrooge McDuck who goes swimming in a pool of gold coins. And why wouldn’t we? The name billionaire has the word billion contained within it, so clearly it means having a net worth of at least ten figures. And in a sense, that is technically true. But if you look at the top ranks of the Bloomberg billionaire index, you’ll notice that nearly all of the leaders are people who own a corporation with substantial amounts of market power in one or more markets.

Billionaires use market power to extract revenue the way that a tollbooth operator does. If you want to drive on a road, you have to pay for the privilege. It costs the tollbooth operator nothing, he/she just has a strategic chokepoint for extraction. Billionaire Warren Buffett, for instance, has such a ‘tollbooth’ strategy for investing, though he uses the term ‘moat’ because it sounds charming and quirky rather than rapacious.

Put another way, the Bloomberg billionaire index isn’t a list of the most important Scrooge McDuck’s, it’s a list of the biggest tollbooth operators in the world.

What he’s saying is that one becomes a billionaire only by short-circuiting the competitive market economy. Then their profits cannot be competed away. Only by gaming the system can one “earn” over a billion dollars. No one person is that valuable.

Stoller goes on to elucidate the operational tactics used by both Bill Gates and by his predecessor John D. Rockefeller, and finds that even though the industries are radically different, the techniques of short-circuiting and circumventing market competition are the same. Whether it’s horizontal and vertical integration, or using market influence to price out rivals, or exclusive contracts, the techniques are the same regardless of industry or time period:

In 1976 and 1980, Congress allowed the copyrighting of software. IBM had been under aggressive antitrust investigation and litigation since 1967, so when it built a personal computer, it outsourced the operating system – MS-DOS – to Gates’s company and allowed Gates to license it to other equipment makers. (Gates’s upbringing didn’t hurt; the CEO of IBM at the the time knew his mother.) Such a relationship with a vendor was a shocking change for IBM, which had traditionally made everything in-house or tightly controlled its suppliers. But IBM treated Microsoft differently, transferring large amounts of programming knowledge to the small corporation. IBM also did this with the microprocessor company Intel, which IBM protected from Japanese competition.

And yet, in 1982, the Department of Justice dropped the antitrust suit against IBM, signaling a new pro-concentration framework. Bill Baxter, Reagan’s antitrust chief, did not want to bring monopolization suits, and did not. The new fast-growing technology space of personal computers would be a monopolized industry. But it would not be monopolized by IBM, which had kept control of the computing industry since the 1950s, because IBM’s corporate structure was now skittish about the raw use of power. And it would not be monopolized by AT&T, which was kept out of the computing industry by a 1956 consent decree that lasted until 1984. Gates, in many ways, had a greenfield, an environment friendly to monopoly but one in which all the old monopolists had been cleared out by antitrust actions.

In the case of Amazon, even though it theoretically has competition, through vertical and horizontal integration it can effectively control online e-commerce to a large degree. The result is a fortune greater than that of entire nation-states controlled by a single individual. One hardly imagines that Adam Smith would approve.

I read an interesting concept, and I forget where it came from. It was that networks are natural monopolies. This explains things like Facebook, Apple, Amazon, etc. It’s entirely possible that the online world, due to features inherent in the technology, simply cannot be regulated by normal competition the way the market for goods and services can. Yet all our theories pretend that it can. It’s delusional.

Under these scenarios,’ profits’ are really a form of tribute (or perhaps plunder). In fact, we really shouldn’t even use the word ‘profits’ to describe them (just like we shouldn’t use ‘trade’ to describe global wage arbitrage).

And there are many more examples of competition being limited by deliberate legal policy. Much of Microsoft’s profits come from the fact that other people can’t copy their software—which they’ve arbitrarily labeled “piracy”—without facing legal repercussions enforced by the state and its legal system. In that sense, outsized fortunes are a consequence of laws, and not a feature inherent to technology:

…inequality is not in fact driven by technology, it is driven by our policy on technology, specifically patent and copyright monopolies. These forms of protection do not stem from the technology, they are policies created by a Congress which is disproportionately controlled by billionaires.

If the importance of these government granted monopolies is not clear, ask yourself how rich Bill Gates would be if any start-up computer manufacturer could produce millions of computers with Windows and other Microsoft software and not send the company a penny. The same story holds true with most other types of technology. The billionaires get rich from it, not because of the technology but because the government will arrest people who use it without the patent or copyright holder’s permission.

This point is central to the debate on the value of billionaires. If we could get the same or better technological progress without making some people ridiculously rich, then we certainly don’t need billionaires. But in any discussion of the merits of billionaires, it is important to understand that they got their wealth because we wrote rules that allowed it. Their immense wealth was not a natural result of the development of technology.

Farhad Manjoo promotes billionaire ideology in proposal to get rid of billionaires (Dean Baker, Real World Economic Review)

Baker has also pointed out that outsized salaries in many fields are determined by limiting competition though things like wildly expensive education and licensing requirements, which are ultimately determined by the government. Doctors and lawyers do not have compete against the wage rates in India or China thanks to the legal system, for example. Everyone else, however, is required to compete against the entire world for jobs.

On a global level, most billionaires are not the result of “hard work” or doing things beneficial for their society:

The vast majority of the world’s billionaires have not become rich through anything approaching ‘productive’ investment. Oxfam has showed that, approximately one third of global billionaire wealth comes from inheritance, whilst another third comes from ‘crony connections to government and monopoly’.

Why on Earth Shouldn’t People Be Able to Be Billionaires? (Novara Media)

And the monopolies that allow billionaires to exist are not good for the economy as a whole. In fact, they are highly detrimental, as Chris Dillow further points out:

What’s more, monopoly pricing is a form of tax – a tax which often falls upon other, smaller businesses…In this sense, not only are billionaires a symptom of an absence of a healthy competitive economy, but they are also a cause of it: their taxes on other firms restrict growth and entrepreneurship…

Tories are wrong, therefore, to portray attacks on the mega-rich as the politics of envy. It’s not. The existence of billionaires is a sign and cause of a dysfunctional economy…

In fact, logically, it is rightists who should be most concerned by the concentration of wealth. We lefties can point to it as evidence that the system is rigged. But Tories should worry that it undermines the legitimacy of the existing order not only because people don’t like inequality, but because it slows down economic growth and so encourages demands for change.

Furthermore, their existence is detrimental politically:

Controlling society’s wealth effectively gives the wealthy the right to plan economic activity. Billionaires – and the people who manage their money – determine which governments can access borrowing, which companies deserve to grow, and which ideas should be researched. This gives them an immense amount of political, as well as economic, power – allowing billionaires to provide favours to those politicians who helped them get rich in the first place.

Ultimately, the monopolisation of society’s resources by a tiny, closed-off elite means that most of society’s resources are used for dirty, unsustainable and unproductive speculation.

Why on Earth Shouldn’t People Be Able to Be Billionaires? (Novara Media)

In fact, the proliferation of billionaires in the developed world has accompanied a period of slow growth and stagnation, not rapid growth. As has been pointed out ad nauseum, yet still fails to sink in, America’s fastest period of growth came when there were fewer billionaires and tax rates ranged from 50 to 90 percent. There is no evidence that the proliferation of billionaires has benefited society as whole. And now, billionaires are attempting to buy political offices outright, making a joke of democracy.

People defending billionaires are only defending raw power, not capitalism, not democracy, and certainly not free markets.

Stoller concludes:

[Billionaires] are not people with a bunch of dollar bills stacked to the moon, they are (largely) men with a strategic position of power protected by public laws and rules. They aren’t better or smarter than anyone else, they are simply politically adept and in the right place at the right time. There’s no reason we have to enable such people to run our culture. At the end of the day, tollbooths are nothing but bottlenecks on a road on which we would otherwise travel faster and more freely.

What is a Billionaire? (Matt Stoller)

So, should there be billionaires? The answer is no. And you should believe that if you consider yourself a libertarian free marketeer or a democratic socialist. Anyone asserting anything else is just a bootlicker or a toady.

Addendum:

Here’s a good piece explaining how billionaires are basically mad kings:

…one of civilization’s great challenges stems from millionaire rhyming with billionaire. In holding them in the same linguistic corner of our minds, we conflate them, yet they’re so mathematically distinct as to be unrelated. A millionaire can, with some dedicated carelessness, lose those millions. Billionaires can be as profligate and eccentric as they wish, can acquire, without making a dent, all the homes and jets and islands and causes and thoroughbreds and Van Goghs and submarines and weird Beatles memorabilia they please. Unless they’re engaging in fraud or making extremely large and risky investments, they’re simply no match for the mathematical and economic forces—the compounding of interest, the long-term imperatives of markets—that make money beget more money. They can do pretty much whatever they want in this life, and therein lies the distinction. A millionaire enjoys a profoundly lucky economic condition. A billionaire is an existential state.

This helps explain the cosmic reverence draped over so many billionaires, their most banal notions about innovation and vision repackaged as inspirational memes, their insights on markets and customers spun into best sellers. Their extravagances are so over the top as to inspire legend more often than revolution…

The Gospel of Wealth According to Marc Benioff (Wired)

One of the most potent demonstrations that the modern-day rich are mad kings, comes form the story of Adam Neumann of WeWork. This is the impression I got from the Behind the Bastards podcast on Neumann: The Idiot Who Made, and Destoryed, WeWork (Podtail)

Counting Jeff Bezos’s fortune using 1 grain of rice = $100,000
byu/GallowBoob innextfuckinglevel

Gandhi the Anarchist

Posted on January 29, 2016 by Reid Mukai

Editor’s note: Tomorrow marks the 67th anniversary of the assassination of Mohandas Gandhi. Society often celebrates such influential rebels while forgetting what made them great. Articles such as this help us avoid that trap.

By Jason Farrell

Source: Center for a Stateless Society

A complex man with a controversial legacy, Mohandas Gandhi remains one of the pioneers of civil disobedience as a political weapon and a giant in 20th century anti-colonialism. An individualist anarchist who motivated millions to fight to liberate themselves from British rule, his success showed a potentially powerful application of libertarian ideas during a major political crisis and the ability of those values to inspire positive, peaceful outcomes.

Gandhi’s principles of radical liberation existed within a moral framework that abhorred violence but empowered ordinary people, intellectually and spiritually, to prevail against oppressors and shatter a miserable status quo. According to the research of Erica Chenoweth, Gandhi’s template of non-violent resistance has been immensely successful for later generations around the world in creating lasting improvements in civil rights.

Modern activists and political thinkers shouldn’t discount the essential libertarian qualities of Gandhi’s philosophy, as they were among its most powerful and effective attributes. A commitment to natural law, self-determination, individualism and an abhorrence of government were core to his thinking and largely responsible for his success as an activist.

Gandhi’s Philosophy

Satyagraha, Gandhi’s philosophy of non-violence, which translates to “truth force” or “love force” carries with it some distinctly libertarian ideas. It incorporates elements of both the “knowledge problem” (applied in a moral sense) and the non-aggression axiom, although taken a step further into moral obligation to others — which is more than libertarianism demands. According to Gandhi:

In the application of Satyagraha, I discovered in the earliest stages that pursuit of truth did not admit of violence being inflicted on one’s opponent but that he must be weaned from error by patience and compassion. For what appears to be truth to the one may appear to be error to the other. And patience means self-suffering. So the doctrine came to mean vindication of truth, not by infliction of suffering on the opponent, but on oneself.

Gandhi noted the purpose of Satyagraha was to “convert, not to coerce, the wrong-doer.” Success is thus defined as cooperation towards a just end, rather than a political “win.” He also spoke of means and ends as inseparable, rejecting the use of violence or the “victory, by any means necessary,” mentality of some who have practiced passive resistance in the West. Gandhi knew using violent means would embed injustice in whatever ends are attained, exacerbating the cycle of violence that plagues so many societies. In this way, the practitioner’s authority is rooted in moral force instead of violence, and has the potential to reduce antagonisms within a society without harming the antagonists.

Gandhi developed a set of very particular rules and mores for Satyagrahis to follow, including mandatory spinning, chastity and abstinence from alcohol. With these we are unconcerned, since different disobedience movements employed different particulars in their belief systems. What is interesting and relevant is the commonality among them, and the parallels to libertarian beliefs: The notion of the moral abhorrence of coercion, and the acknowledgement of coercion’s role in perpetuating injustice; the belief in natural rights that oblige disobedience to unjust laws; finally, and most pertinently, the almost mystical ability of this approach to inspire entire populations to mass action is an historical fact.

Foundations of Indian Liberty: Satyagraha in Action

The Jallianwala Bagh massacre of April 13, 1919 (also known as the Amritsar massacre) has been characterized as the turning point in the history of British India, the event that lost Britain her ‘jewel in the crown’ and eventually her empire. The event, condemned by Winston Churchill, nevertheless produced an escalation of tension and insults against Indian subjects and shattered the notion that Indians were British subjects with the same rights as the British themselves, much in the way the Easter Rising created that same clarity for the Irish.

The Tribune of India described the massacre as a

[M]ilestone in the struggle for freedom which brought Mahatma Gandhi on the scene in his capacity as a leader of the masses whose presence inspired millions of people for three decades.

In the annals of our freedom struggle the Jallianwala Bagh massacre occupies an unforgettable place. Overnight, men and women resolved to defy the British might. For Gandhiji, the incident was a turning point. He became a ‘rebel’ and realised the futility of achieving freedom through British cooperation. The seeds of his ‘do or die’ movement were thus sown then and there.

Noted the Tribune:

History bears ample testimony to the fact that the ill-conceived and unwarranted 1919 military operation proved to be a catalyst for bringing the doom of the British Raj as it created an unbridgeable gulf between the British Government and the Indian people, leaving the British with no other option but to transfer power to the Indians.

Gandhi capitalized on the anger against British rule with the first concerted civil disobedience campaigns, the non-cooperation movement that began in the 1920’s. The Salt March of 1930 was among his most famous successes. The march began with a mere 78 people, swelling to throngs of 30,000-50,000 as they marched through four provinces to protest the salt tax. Gandhi went to sea to make illegal salt, a highly symbolic and dangerous act that challenged British authority. The result was widespread support and media attention, and the building of a broad-based movement. That movement contributed to Indian independence from the British in 1947.

Gandhi’s Libertarian Ideology

Though Gandhi the monolithic figure is widely revered, his actual political philosophy is seldom discussed, perhaps because he was an anarchist who believed in a cooperative agrarian economic model that prevented stratification of classes and political power.

It is well known that Gandhi was motivated by a desire to see India gain independence from the British Empire. Beyond that, his experience with governments seemed to have led him to a deep abhorrence of the institution, and an embracing of individualism, self-reliance and spontaneous order, part of a moral system he called the Swaraj, which translates literally to “self-rule.”

According to Swaraj.org:

The call for Swaraj represents a genuine attempt to regain control of the ‘self’ — our self-respect, self-responsibility, and capacities for self-realization — from institutions of dehumanization. As Gandhi states, “It is Swaraj when we learn to rule ourselves.” The real goal of the freedom struggle was not only to secure political azadi (independence) from Britain, but rather to gain true Swaraj (liberation and self-rule).

Gandhi scorned the representative democracy due to its conflict with his deeply held reverence for the rights of the individual, noting “Swaraj will be an absurdity if individuals have to surrender their judgment to a majority.”

Gandhi recognized inequalities would persist. He was, however, deeply skeptical of government as a tool of social improvement:

I look upon an increase of the power of the State with the greatest fear, because although while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress. We know of so many cases where men have adopted trusteeship, but none where the State has really lived for the poor.

It is my firm conviction that if the State suppressed capitalism by violence, it will be caught in the coils of violence itself, and will fail to develop non-violence at any time. The State represents violence in a concentrated and organized form. The individual has a soul, but as the State is a soulless machine, it can never be weaned from violence to which it owes its very existence.

Gandhi was a believer in spontaneous order as well: “We find the general work of mankind is being carried on from day to day be the mass of people acting as if by instinct.”

Influenced by Western traditions in part due to the time he spent in Britain in his youth, Gandhi was also a believer in individualism, and the use of reason to underwrite a person’s morality. According to Professor T.N. Madan, Honorary Professor of Sociology at New Delhi University:

One of Gandhi’s outstanding contributions to social and political thought, I suggest, was the conception of altruistic individualism within a cultural setting that was generally considered group-centred … In regarding reason and moral sense as the primary sources of good conduct, Gandhi asserted the right of the individual to arrive at judgments and, if necessary, to defend them against collective opinion, whether traditional or contemporary. His excoriation of the practice of untouchability was not merely an assertion of his own individual right to make moral judgments — indeed he considered this an obligation but more importantly the assertion of the moral worth of every single human being, irrespective of his or her ascribed social status. Such moral worth is the basic premise of good society; whether it is enhanced or eroded depends on the dialectic of social pressures and individual agency.

Gandhi not only believed in asserting individual rights against the coercion of the state, he evidently believed market processes and private property would best meet man’s needs and scorned the use of parliamentary systems in attempting to achieve social ends. He was hostile to centralized authority of any kind and believed strongly in individualism and self-rule. “If we become free,” he said, “India becomes free and in this thought you have a definition of Swaraj. It is Swaraj when we learn to rule ourselves.”

It is worthwhile to note the relevance of natural law in radical liberation. Like with most governments, the British claim that their colonies enjoyed rights as British subjects was farcical. Whenever conflict arose, those rights seemed to dissolve quickly into coercion and bloodshed as the British fought to maintain unquestioned supremacy. Gandhi, like the Sinn Fein and the American founders before him, used the notion of a higher “natural” law and an emphasis on self-rule to motivate the oppressed to seize their own freedom.

Gandhi angered some by extending his notion of power and Swaraj to the history of colonization. While acknowledging the British Empire’s cynical intentions in India, he placesthe responsibility for the disaster of colonization on the Indian people. “It is truer to say that we gave India to the English than that India was lost … to blame them for this is to perpetuate their power.” Because power resides in the people and they can only lose it by relinquishing it (often through coercion by others), petitions to the government get a new meaning with Gandhi. “A petition of an equal is a sign of courtesy; a petition from a slave is a symbol of his slavery.”

Here again is a similarity with Sinn Fein’s embrace of natural rights — rights don’t come from government, but from within. Therefore, rights continue to exist when they cannot be openly expressed due to coercion. This is a crucial intersection for libertarians. Radical ideologies succeed in part by inculcating oppressed and apathetic populations with a sense of self-worth. The concept of natural rights was important during the colonial period, when colonized people believed rights were rare morsels tossed to them on the whim of their superiors. Gandhi’s philosophy sought to rob Britain of their power to determine the law as a sort of demystification of white rule.

Anarchic India of course, was not to be. Gandhi, not being able to realize his “oceanic villages” system with Indian liberation in 1947, settled on minarchism:

Gandhi recognized that there would be a national government, and his anarchic, oceanic circle would not yet be possible. Nevertheless, he used the terms of nationalism to move towards the ideal of Anarchy. He advocated for a minimal level of State organization to fund some education programs and to promote his economic concept of trusteeship. Hence, Gandhi was a compromising Anarchist.

Gandhi had to compromise his principles in some cases. But of greater import is the fact that his individualist principles caught fire and exploded in popularity in the face of severe oppression. Indian independence was a complicated endeavor, but in the end, Gandhi proved to be on the right side of history. The radical anarchist who had been repeatedly imprisoned, classified as a terrorist by the British parliament and derided as a threat to law and order, was described by former U.S. Secretary of Defense George C. Marshall as “a spokesman for the conscience of all mankind.” With the positive impact non-violent resistance movements have had in the last seven decades, he might also be considered a true political visionary.

Leviathan and Behemoth

Posted on January 20, 2016 by Reid Mukai

By Chris Shaw

Source: Center for a Stateless Society

Introduction

The capitalist economy has gone through another shock, and the potential for another, larger one is on the horizon. While it’s seemingly in its death throes, capitalism continues to fuel growth. Under such a system we have seen a vast improvement in general living standards across the globe, despite rigged markets and the omnipresent power of the state. However, who is this growth for? While absolute poverty has been rolled back, and in many Western nations completely eliminated, we still see a large, indebted underclass, a Global South regularly sold out to the interests of capital and a system of vast wealth that only seems accessible to a privileged few. Economists may say that if we look at BRIC countries we see an equalisation of wealth and growth with the West, but these BRIC markets are used as cogs in a hegemonic state-corporate machine. Third World entrepreneurship isn’t encouraged, but rather sidelined for corporate dominance. This is a system that needs to end. The debt economy, big government, the corporate-state partnership and modern globalisation all need to end. In their place we need truly free markets, where cooperation and exchange are paramount and aren’t controlled by corporate or government interests.

Our neoliberal society is composed of corporate hegemony backed by state power. By corporate hegemony I mean the power modern capital has over governance. This isn’t just found within corporations, but within guild-like occupational boards (Lawyers and Doctors and their licencing requirements) and corporate trade unions that support the maintenance of wage labour at the expense of worker independence from the structure of capital. Any markets we see are rigged in favour of corporate interests. The major monopolies of government control make sure that markets are a tool of big business and the ability of workers to break free from this paradigm is limited if not impossible. The entry barriers to markets, the restrictions on self-employment and the continued lobbying of government for patronage and favourable legislation leads to a corrupt, crony system that relies on the indenture of the poor in favour of employers and business.

There are many libertarians who unfortunately see this system as just and fair. They see sweatshop labour as an excellent solution to Third World poverty. The idea of growth is given religious prescience, without realising cultural antecedents and the importance of community within the realm of the individual. They don’t understand the power dynamics at play, and the continued collusion of corporate and state interests. They fail to see the monopolisation of social institutions and the commodification of culture and life. The destruction of livelihoods all in the name of GDP growth. This is not a free market, but rather capitalism at work. To move away from this we need to understand that free, or freed, markets are economic organisations free from coercive control, where the individual and community are the key players and profit is not reliant on its exploitative features, but rather the ability to meet real demand.

We need to look at the current capitalist system from the anarchist perspective that I put forward in this paper. Modern capitalism is a state-based system, reliant on enforced hierarchies and the provision of false choice. Real choice would confer power on individuals and communities, while under today’s system real choice is in the hands of bureaucrats and corporate oligarchies. Chartier’s definitions of capitalism, “capitalism: an economic system that features a symbiotic relationship between big business and government”[1] and “capitalism: rule—of workplaces, society, and (if there is one) the state—by capitalists (that is, by a relatively small number of people who control investable wealth and the means of production)”[2] shines light on this conception. Rather than capitalism being a system of free markets as posited by some libertarians (Block, Mises, Hayek, etc.) it is instead a system reliant on big government and its institutions and the control of said institutions via capital.

The vulgar libertarians who view the capitalist economy as some form of free market do not understand the forms of power present. If a worker wants to start a collectively-owned business, can he? Not without huge capital requirements and regulatory hoops to jump through. How about setting up a mutual credit system with a different currency? Well there are legal tender laws that in the United State are enforced with more brutality than the punishments given for heinous crimes[3]. When talking of free markets, we need to understand that freedom is only relative to where the power lies. If it lies with the state and its subsidiaries, then freedom is conferred on large employers and corporate unions whom receive forms of state funding and favourable regulation. If it lay with individuals and communities, we would most likely see a move away from one-size-fits-all regulation, the processes of commodification through rentierism and arbitrary entry barriers.

The Regulatory Apparatus

The regulatory apparatuses found within the economy also benefit the capitalist structure. While generally seen as a bulwark against corporate power, the regulations found in an economy create entry barriers to markets and a form of implicit subsidy to big business, as these businesses rent-seek government for more regulation, allowing for a monopoly within particular economic sectors. We can see in the banking, energy, manufacturing and retail sectors that this is the case. Childs noted this in relation to the development of monopoly power in American business during the late 19th and early 20th centuries. He states “this, then, was the basic context of big business; these were the problems that it faced. How did it react? Almost unanimously, it turned to the power of the state to get what it could not get by voluntary means”[4]. In particular Childs saw this occurring in the rail industry in America during the late 19th century. Massive competition had begun in the rail industry, which massively sunk profits for established companies and encouraged many start ups and smaller competitors. As large rail companies weren’t competitive enough in this environment, they came to rely on government intervention, where regulatory boards were created staffed mostly by executives from the large rail companies.

This is what regulation is really about. It isn’t a way of protecting the hapless consumer from the ravages of a free market, but is rather a tool of corporate power that forms entry barriers and enforces particular dichotomies of ownership and organisation in an economy. Capitalism becomes a system of patronage, where corporations gain favour due to their money and power, which itself comes from the state in the first place. As Paul notes “the rich are more than happy to secure for themselves a share of the loot – for example, in the form of subsidised low-interest loans…bailouts when their risky loans go sour, or regulatory schemes that hurt their smaller competitors”[5]. Rifkin shows a similar process, describing how “the critical industries that made up the infrastructure…banded together in a mega lobby to ensure…financial underwriting, as well as industry-friendly codes, regulations, and standards to ensure market success”[6].

The regulatory apparatuses also have the effect of distorting economies of scale, decoupling supply from demand and favouring largesse in business and ownership models. Thus we see the development of high overhead costs which restrict market entry to best capitalised of entrepreneurs. By limiting competition, we see perverse operations occurring that favour the interests of business over the worker and consumer. Thus things like planned obsolescence, guaranteed markets and a continuation of private gain and socialised loss. As had been noted by Childs, private cartels were difficult to maintain. Even the rail trusts, themselves built in contrived, government-produced markets, were ravaged by competition from smaller rail providers[7] that favoured more local economies of scale. So these corporations looked to the government, who enshrined their demands into acts and legislation which created cartels that were much more easily enforced. We just need to look where wage laws, licensure laws and planning/zoning laws are coming from and who lobbies for them. Invariably its dome by corporations and their lobbying arms. We also forms of legal privilege, as in the case of limited liability and corporate personhood, which are really only accessible with very high capital costs and a developed shareholder clientele. These systems are purely artificial, and whether they would work voluntarily is not the question. Rather it is, if they are efficient, why do they need the government to provide these privileges and apparatuses. The answer is simple, they aren’t efficient.

Even when there are laws supposedly to ameliorate the effects of marketisation, as in the case of welfare and government-provided services, they are usually built on the back of resilient communities who developed their own systems, and usually end up allowing employers to pay subpar wages and benefits and lessen the strength of community relations. It builds layers onto a poor foundation. Or to put it another way, the corporate-state nexus is putting a cinderblock on toothpicks. Bureaucrats don’t fully understand the problem with this but realise it is unstable. So to stabilise it, they put more toothpicks under the cinderblock, thinking it will stabilise. However, the system is inherently unstable and propping it up denies the inevitable.

This assurance of market success shows that under a truly free market they wouldn’t exist, or if they did it would be on a much smaller scale. The regulatory web is just another power dynamic that allows for capture and control. To describe this as a free market is laughable. These processes are completely involuntary, reliant on extortion through taxation and allow for the redistribution of wealth from the poor and middle class to the rich and privileged.

The Money Monopoly

While regulation, which “far from coming against the wishes of the regulated interests, was openly welcomed by them in nearly every case”[8], is an important part of the corporate state, the original four legal monopolies (as identified by Tucker), money, land, tariffs and patents, allowed for the development of rent-seeking corporations. These four monopolies, or as I see them structural monopolies as they create the structure of the socio-economic paradigm, are fundamentals of capitalism.

The money monopoly allows for the restriction of credit and the development of debt-based models that destroy stores of value and make individuals slaves to the desires of governments and banks through modern forms of debt peonage. As Dowd notes, over the 20th century “the US dollar has lost almost 85 per cent of its purchasing power even by official government statistics; for its part, sterling has lost 98 per cent of its value over the last century”[9]. The restriction of credit coupled with the inflationary tendencies of modern fiat currencies mean the poorest are effectively forced into wage labour, as they rely on pitiable increases in nominal wages and are unable to gain any real credit for self-employment or collective worker-owned enterprises. What happens is a redistribution of wealth from the poorest to the richest. Long shows that “inflationary monetary policies on the part of central banks also tend to benefit those businesses that receive the inflated money first in the form of loans and investments, when they are still facing the old, lower prices”[10]. The pre-inflation money allows investors and banks to capitalise on new production and investment while the poorer elements of a society receive minimal benefits as the inflationary course makes its run, with prices rising and wages following later.

This also leads to massive levels of debt found currently throughout the globe, as credit instruments are used to make up for stagnant wages that can’t afford increasing land prices and subsequently rent prices, as well as an increase in the price of consumer goods that are a significant chunk of working people’s wages. The process of rent extraction via high interest rates follows from this, as “the money monopoly also includes entry barriers against cooperative banks and prohibitions against private issuance of banknotes, by which access to finance capital is restricted and interest rates are kept artificially high”[11]. Carson notes further that the elimination of controlled interest rates would lead to “significant numbers (of workers) retiring in their forties or fifties, cutting back to part-time, or starting businesses; with jobs competing for workers, the effect on bargaining power would be revolutionary”[12]. The current banking system leads to the necessitation of wage labour through restricted credit dissemination and debt-based forms of finance.

The Land Monopoly

The land monopoly is another lynchpin of capitalism. Most modern land is either nationalised or corporatised through state structures, leading to massive land centralisation and the process of land expropriation that is visible in much of the Third World. Alternative land arrangements, such as those organised by tribes and local networks, are swallowed up in this process. Many commons regimes that have existed for centuries are being eliminated in favour of the interests of capital. This process of enclosure of common lands began at “the end of the Medieval Age, when royal and feudal landowners began to enclose common lands, especially in Tudor England and Trastamara Spain. Through legal and political manoeuvres, wealthy landowners marked and hedged off sections of the commons for their own profits, impoverishing many villagers and ultimately destroying their communitarian way of life”[13]. The enclosures have continued into the 20th century, where “common lands have suffered a third, global wave of commodification and enclosure, ‘land grabbing’ spurred by the dominant neoliberal doctrine and competition for non-renewable natural resources and supported now by the evolutionary theory of land rights”[14]. The modern enclosures of land occur most noticeably in Africa and South America. We see the elimination of common land owned by native tribes and the raping of natural resources. The Niger Delta and its oil reserves show this acutely, with oil spills being common and almost no compensation to the farmers and workers who rely on the Delta for their livelihoods.

In effect this is a process of neo-colonialism pushed through via the Washington Consensus that is epitomised in international groups like the IMF and WTO. The plight of Bangladeshi workers is caused by this problem of neocolonial practices. In Bangladesh “wealthy and influential people have encroached on public lands…, often with help of officials in land-administration and management departments”[15] which has led to a result of “Many of the rural poor in Bangladesh are landless, have only small plots of land, are depending on tenancy, or sharecropping”[16]. What follows is a continuation of the development of a landless mass of cheap labour as a result of the nationalisation and corporatisation of land.

Then there are planning and zoning laws and property laws which act as a form of implicit land nationalisation in many Western countries. Among their many effects, they artificially inflate land prices, which has a knock on effect of making housing unaffordable and making the purchase of land extremely difficult for small businesses. This further encourages the process of rentierism and indebtedness as individuals have to get out mortgages or rent accommodation, and individuals looking to start a business are priced out, thus favouring large corporations. If you want to self-build a home or business, it becomes impossible. Instead a series of state-favoured land developers are able to land bank and rent out at extortionate rates. They aren’t subject to competition and making new land isn’t possible, so you create a system of patronage and favouritism, simply adding to the enforced necessitation of wage labour.

These processes of land appropriation lead to the development of land speculation via government-favoured industries, creating artificially high land prices which price out small businesses, community groups and anyone who isn’t able seek rent from the state. This speculation also fuels boom-bust cycles, with much of the credit used by investors and businesses being put into the easy investments of land and housing. This creates economic bubbles through the wide diffusion of mortgages and an increase in house and infrastructure building that isn’t necessarily needed. In London, we see this playing out with high-price apartments and high-rises that don’t address the needs of the wider population and are fueled, at least partially, via QE-induced credit. The development of a rentier society occurs. With land prices held artificially high, rich landowners are able to rent out their properties at high prices, creating economic precarity and stimulating the larger wage labour monopoly that is caused by a combination of this monopoly and the money monopoly.

The Larger Wage Labour Monopoly

As previously mentioned, credit is restricted thus funding options are limited for workers. Add to this high land prices, and the ability to buy a house or develop a business are severely restricted, developing the large pool of wage labour seen today. This obviously favours large-scale employers such as corporations who are able develop to their current size due to this wage labour monopoly. It leads to a means of surplus value, or rent, extraction. As Solow notes “one important reason for the failure of real wages to keep up with productivity is that the division of rent in industry has been shifting against the labor side for several decades”[17].

Alongside the two monopolies, the increase in precarious wage labour is compounded by the restriction of collective action and the development of monopolist unions that complement the centralised economic actors. The legislation governing strikes and the ability to make a union add to this problem, making it difficult for freelance workers to unionise and stopping the development of radical trade unions and company unions. Thatcher’s trade union reforms in the UK created such a problem as the majority of private sector unions are part of the corporate system of economic centralisation. The final nail in the coffin is the minimum wage. This creates a wage ceiling and simply allows corporations to price smaller competitors out of the market while subsequently limiting the hours and benefits workers receive. As most minimum wages aren’t enough to live on, many workers rely on debt-based credit which pushes individuals further into wage labour, creating debt-led wage slavery and maintaining a massive, centralising economic monopoly on the choice of workers.

As Solow explains, in the US “in the past 10 years productivity has increased 12.3 percent in the non-farm business sector of our economy while real compensation of labor has increased by only 5.1 percent”[18]. So what we see is a form of surplus value extraction, whereby the excess product of labour is captured by the interests of capital and removed from the compensation of labour. This can’t simply be explained away by using the marginalist critique. The value of a product is at least partially informed by its labour input. Marshall’s analysis shows that “price was determined, at any given time, by the balance between the demand and supply that actually existed at that moment. As the time factor came into play…price approached closer and closer to cost”[19] thus showing that the equilibrium of supply to demand moves from subjective criteria of value toward the input of labour in that value. Again looking at Solow’s productivity figures, the compensation of labour isn’t in proportion to production.

Hodgskin’s idea of a market artificially privileged with rents, profits and interest becomes a reality in the modern context. The increase in freelancing and labour market individuation means the expropriation of rent and the limitation of choice, particularly as unions are simply a representation of the corporate interest, particularly since the Wagner Act in America and the trade union reforms in Britain. The individualisation of labour serves to increase these artificial privileges, meaning can be paid less and thus become more reliant on debt instruments such as mortgages and credit cards to simply earn a living and have a roof over their head. This system is even more acute in the Global South, with the restriction of choice via the structural monopolies being almost explicitly enforced via the government as land in enclosed and regulations used to restrict microeconomic activity that doesn’t serve the interests of global value chains. Their human capital is monopolised, wages restricted, collective action completely banned and working conditions extremely poor. The main profit garnered from this is simply the mark-up created by internal tariffs and intellectual property (to be discussed later in this paper), which limits domestic market production and serves only the interests of capital and big business, as both the workers and consumers are given low wages and higher prices respectively.

What happens then is the construction of a monopsony situation in wages and labour, where the product of labour isn’t adequately paid, becoming widespread due to companies paying below this level. This is compounded by wage laws favoured by corporate interests, and an inability for the worker to capture this value through collective bargaining or through the means of owning one’s productive capacities due to market entry barriers that restrict self-employment and worker or community ownership. It constrains the real choice of workers and puts the power dynamics upon employers and bureaucrats.

Tariffs

The next two monopolies that Tucker highlighted further the centralisation of economic power toward corporations. Tariffs are simply a form of direct state intervention to favour domestic industry over foreign competitors. There are arguments favourable to this position, such as those by List and Chang. However, there is a significant time limit on the ability of tariffs to produce any sort of growth (usually artificially induced by state policies), and eventually many of the protected industries become bloated and begin to rely on further government subsidy.

The use of tariffs today is much more limited than it was during the mercantile years of the 17th and 18th centuries. However, one area where tariffs are still largely used is modern agriculture in the West, particularly the US and the EU. The Farm Bill in the US creates price distortions within food markets that favours large agribusiness over small, family farms. As Reitzig explains “the farm bill perpetuates the myth of cheap food. It subsidizes Big Ag so that BA can sell its food to the market cheap and you find it at the grocery store for less than you’d pay for it from your local farmer”[20]. However as “it costs the small local farmer about the same to produce the same food as the Big Ag farmer”[21], all the Farm Bill does is redistribute tax money toward large agricultural firms. The economies of scale thus get changed, with farmers forced into retail sector bulk sell offs that are increasingly inefficient and perpetuate the agricultural tariffs and subsidies.

There also forms of internal tariffs that protect large industry through direct subsidisation. For example “between 1973 and 2003, the US government paid out $74 billion in energy subsidies to promote R&D in fossil fuels and nuclear power”[22]. This was despite these companies having huge profit margins, which shows the actual profitability of these industries. They are reliant on institutions of theft to simply develop critical infrastructure as a result of their internal unproductiveness and their falling foul of the economic calculation problem. It creates a system of perverse incentives as these firms aren’t induced to work and develop in smarter, cleaner ways and instead produce the same limited output. This is corporatism at its finest, with government purposefully favouring large firms over small firms, and thus encouraging wasteful practices. Returning to farming, the EU holds similar policies, which in many ways restrict crop diversification and mean that certain farmers are favoured over others. This leads to artificially low prices which allows for retail monopolisation due to farmers being unable to sell their own product due to EU regulations which create this system. It is a continuation of the obstinate incentives that leads to overproduction, false demand and the entrenchment of economic disadvantages and inefficiencies.

Patents

Patents act in a similar way. They privilege large businesses in rigged markets and allow for centralisation and monopolisation. “The patent privilege has been used on a massive scale to promote concentration of capital, erect entry barriers, and maintain a monopoly of advanced technology in the hands of western corporations. It is hard even to imagine how much more decentralized the economy would be without it”[23]. Patents act to lock up innovation in a legal quagmire. It puts new technology into the hands of capital, limiting its distribution and creating a rentier system, where the privilege to use new technology and even knowledge is commodified by large corporations in collusion with the state.

This inability to access new technologies and knowledge creates a form of entry barrier, with smaller competitors being unable to afford this access. Most modern tech companies (Google, Apple, Microsoft) are in effect monopolists of knowledge and technology, limiting its accessibility and collecting the rent they charge on these products. Their market position becomes entrenched with restrictive data laws and copyrights that mean the passage of information is blocked by virtual, artificial toll gates that wouldn’t exist if not for coercive legislation.

Then there is the direct government subsidisation of research and development (R&D) spending that allows for large companies to reap “monopoly profits from technology it didn’t spend a penny to develop”[24]. Modern tech companies then are not only monopolists of patented of knowledge but also rentiers of technology they had no real part in developing. So while small inventors and start ups toil away trying to create a product that can only be sold on a rigged market, large firms benefit purely because of their power and the revolving door of government benefaction. Similar processes occur in military-based R&D spending, where corporations are given large grants and procurement contracts to develop military hardware and weaponry that on a freed market would not even necessarily be required by any customer or business. As Chomsky notes, in the US “the Pentagon system has long been the country’s biggest welfare program, transferring massive public funds to high-tech industry on the pretext of defense and security”[25]. These companies’ profits and growth are not then created in a market mechanism of competition and demand-led supply, but rather in a bubble of government-led protection, where they ride on the coattails of stolen innovation and forms of theft AKA patents and taxation respectively. “If they had to face the market, they’d be out selling rags or something, but they need a nanny state, a powerful nanny state to pour money into their pockets”[26].

Further, this process of patenting becomes a pure form of commodification as they remove products and ideas from their cultural origins. For example, the Human Genome Diversity Project used DNA from certain indigenous tribes in Central and South America. Some of this DNA was patented, and thus removed from the culture it came from without any sort of compensation by the HGDP and the beneficiaries of this knowledge. Biocolonialism and biopiracy are the best terms for this occurrence. By extracting culturally sensitive information and knowledge, a process of commodification occurs, and the whole concept of property, that of the sovereign ownership of the individual or collective, becomes redundant. Further the innovative capacities that supposedly come from intellectual property are limited if not completely negative. In fact the information that was patented was found to be 30% less innovative than the information released for full public use[27].

This analysis is backed by evidence from Scherer, who showed “a survey of 91 companies in which only seven ‘accorded high significance to patent protection as a factor in their R & D investments.’ Most of them described patents as “the least important of considerations.’ Most companies considered their chief motivation in R & D decisions to be ‘the necessity of remaining competitive, the desire for efficient production, and the desire to expand and diversify their sales”[28]. Thus patents and intellectual property “eliminate ‘the competitive spur for further research’ because incremental innovation based on others’ patents is prohibited, and because the holder can ‘rest on his laurels for the entire period of the patent.’ with no fear of a competitor improving his invention”[29].

Transport Subsidies

The fifth monopoly, transport subsidies, is one that has been identified by Carson. As Carson describes, “spending on transportation and communications networks from general revenues, rather than from taxes and user fees, allows big business to ‘externalize its costs’ on the public, and conceal its true operating expenses”[30]. These transportation subsidies allow for the development of large business operations, particularly in the retail and manufacturing sectors. By subsidising the movement of goods by heavy duty vehicles, it means they are given a state-based competitive advantage against smaller, local competitors.

Companies like Wal-Mart and Tesco are able to price their goods artificially cheaply as a result of not adding the transportation costs. Many of these companies actively lobbied for such infrastructure projects. When the interstate system was being built, it “had both an immediate stimulus effect on the industries that participated…oil companies, general contractors, cement manufacturers, steel companies…were among the dozens of industries involved in the building of the great interstate highway system”[31] showing the degree of corporate-state cooperation. It was because these infrastructure projects benefitted their products and models that they lobbied for them.

Of course Carson’s view of this quite US-centric. In much of Europe, particularly the UK, we see other regulations that create a very different kind of transport subsidy. While these nations do subsidise transport via taxation to pay for roads rather than using user fees or road pricing, they also have high fuel duties and regulation on forms of transport, such as regulations on truck design and usage. The fuel duties act as a subsidy in the sense that they destroy small transport firms and simply monopolise the transport industry as only larger companies can afford the higher prices. The forms of regulation mentioned mean that innovation into new vehicle design and competition between firms is limited and simply continues the dominance of particular transport and production companies that aren’t subject to market competition. Thus what we see are two different types of transport subsidies that both act to continue the current economic paradigm.

These subsidies serve to amplify economies of scale, creating national and international markets largely in the control of corporate interests. These large markets create systems of disequilibrium, with monopoly interests being able to develop oligopoly markets from which rents can be extracted. A modern example of this is the creation of HS2 in the UK. It serves as a vanity project for political and bureaucratic elites, who can gain well-paying jobs as political advisors and construction directors. It also allows for the continuation of the North-South divide, with large London-centric firms sucking out talent from the North and Midlands, at little expense to themselves. As Wellings describes it, it’s an example of externalised costs and internalised benefits, with vested interests serving to gain[32]. Economies of scale are created artificially, with competition in local markets suffering due to a project only favourable to London-based businesses. Local economies of scale, which are more natural and more open to individual considerations and supply and demand, are priced out by government intervention. Local transport projects, like roads linking market towns and local rail infrastructure, are ignored due to a lack of political prestige for politicians and their donors and lobbyists.

Road and rail subsidised by the state leads to the current economies of scale that favour large, centralised business entities. It also prices out and discourages private infrastructure projects that could actually make an economic difference by increasing competition and lowering prices, while maintaining local economies of scale which benefit large swathes of areas that currently don’t benefit from the subsidised corporate model. These three monopolies further the wage labour monopoly, by erecting entry barriers against small business and self-employment and by creating feudalistic patent regimes and transport systems that create favourable economies of scale. National markets serve larger companies and hierarchical organisation, and international markets continue to serve and enlarge this. It pushes real costs onto the consumer/taxpayer, and further creates illegitimate profits taken from oligopoly markets.

The Corporate Infrastructure

This wage labour monopoly, with the five structural monopolies feeding it, is the basis of the modern corporate dominated economy. As a result, modern corporations act as oppressive actors on the world stage, using wage slaves and forms of indebtedness to develop the massive growth seen in the 20th and 21st centuries. As Carson states “in a very real sense, every subsidy and privilege described above is a form of slavery. Slavery, simply put, is the use of coercion to live off of someone else’s labor. For example, consider the worker who pays $300 a month for a drug under patent, that would cost $30 in a free market. If he is paid $15 an hour, the eighteen hours he works every month to pay the difference are slavery. Every hour worked to pay usury on a credit card or mortgage is slavery. The hours worked to pay unnecessary distribution and marketing costs (comprising half of retail prices), because of subsidies to economic centralization, is slavery. Every additional hour someone works to meet his basic needs, because the state tilts the field in favor of the bosses and forces him to sell his labor for less than it is worth, is slavery”[33].

Then there is the system of incentives created by this corporate-state monopoly. Infrastructures are developed that maintain the inefficiencies. Rifkin’s analysis of a series of Industrial Revolutions shows this to be the case. The Second Industrial Revolution, the current economic system we live in according to Rifkin, is reliant on state-invested infrastructure and subsidisation[34]. The subsidisation of natural capital is one example of this. Roberts shows that “the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP”[35]. The term natural capital is obviously a broad, all-encompassing term. The specifics are those of the production of pollutants that is subsidised by specific tax breaks and forms of limited liability. These follow from elements of the land monopoly which means pollution becomes an externalised cost upon taxpayers, furthering the inefficiencies of a particular economic paradigm, which Rifkin calls the Second Industrial Revolution but what I would call capitalism.

The maintenance of this system means most companies that are reliant on fossil fuels and the energy and transport infrastructures that follow from them have no incentive to divest into new market ventures, but instead have an interest in resource and capital accumulation. It creates ‘revolving door’ government, where lobbyists persist in convincing policy makers for subsidies here and tax breaks there all the while relying on the rent extraction they gain from state intervention.

This process within resource extraction and energy use is more widely seen in the general production processes of capitalism. The levels of overproduction and continued consumption are fed by the structural monopolies, as well as justifying the wage labour monopoly. To fund the levels of consumption needed to continue production means people are put into a paradigm of working longer to buy more things to enjoy. Its paradoxical as you spend more time at work, thus limiting the amount of time you have to actually enjoy consumer goods. Further, as goods become more expensive due to increasing cost mark-ups and inflationary policies, and housing prices and rents go up due to land speculation and monopoly ownership, more people become reliant on debt instruments to fund their everyday lives and their increasing consumer spending. This has created a precipitous debt bubble as Steve Keen’s work has shown. It has also meant that much of the current growth seen since the Great Recession has been on the back of consumer spending, as Blanchflower has documented.

Incentives are created which lead to increasing, unnatural growth and increasing levels of debt. In particular, levels of corporate debt have skyrocketed during the recession of 2008. This is due to systemic overproduction and waste that has developed due to mass production systems used by most multinationals. The structural subsidies create this system where large production facilities with forms of guaranteed profit are needed for massive market areas, usually on a national or international level. Carson has pointed out that modern markets are hardly an example of spontaneous order and aren’t reliant on supply and demand[36]. Rather the system is reliant on a system of planning, with codified relations between suppliers and distributors and systems of guaranteed consumption through external market control in the form of internal sales tariffs and the financialisation of the economy.

Internal sales tariffs limit what stores/areas products can be sold in, and are only viable as a result of intellectual property regimes that allow for increased costs and a further disconnect between production and consumption. Financialisation on the other hand simply maintains the production systems as well as processes of commodification. It makes corporate debt a commodity, and puts value into meaningless products, which allows for more accumulation and overproduction as business isn’t rewarded for genuine wealth production and creation, which comes from artificial processes, but is rewarded rather by debt financialisation, unsustainable growth in bureaucracy and the continued expropriation of surplus value, or human capital. This also represents a commodification process, as the social relation of debt, as identified by Graeber and Martin, is put into an economistic context, with debt serving the purposes of profit and capital. The debt relationship, that’s shaped by community relations and gift-giving and receiving[37], is taken as a value of capital. And this debt is allowed to build up and shape other economic activity. Consumer purchase after consumer purchase represents this. It is encouraged, and when it slows the government takes over and funds through quantitative easing programs, allowing for the construction of bigger, more complex bubbles. It shows that corporation and government are two sides of the same coin.

We have to remember that as much as governments, corporations are just as likely to be effected by the knowledge problem. To get around, every relationship and process is effectively planned. Business to business relations, as seen in distribution and supply chains, are maintained for decades by large manufacturers so as to continue guaranteed buyers of their products. In other cases, the supply and warehousing operations are subsumed by the manufacturer, owning every process from production to sale. Global value chains are an outgrowth of this hierarchalised control and planning, with much of their success being guaranteed by government. It is dictatorial governments in the Global South (who usually have the backing of the US government and its interests) that ban collective action among labourers through extraordinarily harsh measures, it is trade agreements with their backing by Western governments that maintain artificial property rights such as patents and it is government that externalises the cost of global transportation of these goods onto the taxpayer, thus distorting economies of scale to favour the large corporations and forms of state-corporate economic planning. In other the words, the commodification and Sovietisation of the economy.

Culture Under Capitalism

A paradigm that enforces this economic hierarchy is created, where life is work and your main identity is around the soul-crushing job you inhabit. Social relations are commodified and local economic activity is strangled. The whole idea of community in the 21st century is being replaced by a centralised state and economic activity that has no interest in that community, but is inward looking, determining profit margins rather building strong societal relations. The ability to escape this paradigm is extremely limited by the coercive hand of the state. It restricts collective organising, eliminates common and private property and develops extremely insufficient systems of economic organisation.

What we’ve seen is the disembedding of markets from their cultural and social origins[38]. Relations of debt and consumption, which were as much in political institutions and based around social relations, have been expropriated by capital. Thus instead of markets forming one of many different idea of economic organisation of which it could complement, we see the neoliberal discourse of praising markets and even seeing marketisation in what have been social relations up to this day. Thus public services such as health and energy are wrapped in discourses of competition and corporate ownership. However, markets aren’t actually like this. If we look to genuinely free markets, which are few and far between, we don’t see large production and corporate ownership. Instead we see markets crafted around local institutions and genuine demand for certain goods and services. Ownership is much more decentralised. However, due to government-based price and scale distortions, culture and its institutions are brought into the marketised economy, creating the marketised society.

It leads to the development of modern consumerism, creating warped identities based around products. It kills culture and intelligence in favour of an advertised individual. Carson shows that “mass production divorces production from consumption. The rate of production is driven by the imperative of keeping the machines running at full capacity so as to minimize unit costs, rather than by customer orders. So in addition to contractual control of inputs, mass-production industry faces the imperative of guaranteeing consumption of its output by managing the consumer”[39]. The consumer is separated from the producer. Mass production means a consumer culture. Rather than supply meeting demand, demand is made to compensate for oversupply. It also creates forms of consumer inequality that mean Third World workers have almost no access to the products they help produce. The development of domestic markets in consumer goods is massively restricted via patents and tariffs.

Within the Western world there is similar consumer inequality, with a creation of an underclass who desire consumer goods that their limited wages can hardly afford. Bauman’s analysis of the London Riots in 2011 saw an element of this consumer yearning, with products like high-end trainers and flat-screen TVs being taken. Bauman notes that “from cradle to coffin we are trained and drilled to treat shops as pharmacies filled with drugs to cure or at least mitigate all illnesses and afflictions of our lives and lives in common. Shops and shopping acquire thereby a fully and truly eschatological dimension”[40]. The cultural backwater caused by modern consumerism creates a form of stigmatisation and symbol status, with haves and have nots developing into distinct classes in a consumer culture. As Bauman states “for defective consumers, those contemporary have-nots, non-shopping is the jarring and festering stigma of a life un-fulfilled — and of own nonentity and good-for-nothingness. Not just the absence of pleasure: absence of human dignity. Of life meaning”[41].

The processes of commodification amplify this systemic crisis. The divorcing of production from consumption leads to the most atomistic forms of individualism. It becomes a process of overconsumption and hoarding, without any appreciation of the product development. Cultural and societal obligations and considerations get uprooted by what is wanted and what can be bought. It puts value squarely into the hands of capital, with the determination of worth being decided in social hierarchies that follow from the enforced economic hierarchies of modern capitalism. It is a symptom of the false choice of employment or death, of work creating one’s value in life and of a market shaped not by workers, communities and cultures but by the interests capital and the state that props it up.

Conclusion

This system is massively unsustainable, and becomes more and more reliant on tax revenues to make it profitable. The price system becomes distorted, encouraging the mass production that “leads to ever-increasing demands on state services”[42]. This then shows the inefficiency of large corporations. They are as much subject to the economic calculation problem as the state. Their reliance on the theft of individual income via the taxation system means in anarchist society they are completely unviable. As a system of economic organisation “capitalism could not have survived at any point in its history without state intervention. Coercive state measures at every step have denied workers access to capital, forced them to sell their labor in a buyer’s market, and protected the centers of economic power from the dangers of the free market”[43].

In systems of anarchy, there would be an end to corporate dominance due to their inability to seek state rent and thus collapsing in their inefficiencies. As noted by Carson, there were two paths that could have been taken to organise industry and the economy. The one that was followed was “centralized production using expensive, product-specific machinery in large batches on a supply-push basis”[44]. However a better system was possible. One of “decentralized production for local markets, integrating general-purpose machinery into craft production and governed on a demand-pull basis with short production runs and frequent shifts between product lines”[45]. This would have required localised industry, networked communities and what Rifkin calls lateral, distributional, collaborative markets. Workers would be independent of capital, and have an ability to take back their surplus value. It would involve voluntary governance structures and self-organised communities. It would be an end to the corporate-state nexus.

By having this centralised system, we open the floodgates to the continuation of boom-bust cycles through monopoly government control. Since the delinking of production from consumption, there has been a development of mass production and the apparatuses that prop it up. Marx noted this particular phenomenon, with “the birth of large-scale industry this true proportion had to come to an end, and production is inevitably compelled to pass in continuous succession through vicissitudes of prosperity, depression, crisis, stagnation, renewed prosperity, and so on”[46]. This process in the end favours the capitalists. It destroys real value in an economy and allows for more government involvement. Further, it leads to capital accumulation through government subsidisation and the monopoly position many modern corporations hold within their respective markets.

It’s a process of artificial wealth accumulation and creation, backed by the five monopolies previously mentioned. High land prices, restrictive credit access and the use of interest rates to effectively distort the value of currency, the use of market entry barriers through regulations and patents and the use of transport subsidies all favour the main monopoly, that of wage labour. Because of the diminishing returns that many of these companies are finding, they are becoming increasingly reliant on the extraction of surplus value from their workers. As mentioned earlier, wage laws allow them to eliminate smaller competitors and the development of varied, precarious work contracts mean a diversification of their workforce, which allows them to reduce hours paid and thus reduce their labour costs. However, the compensation of a worker’s product isn’t necessarily met. Thus the accruing of capital simply means the extraction of rent from workers, which is enforced by the limitation of worker’s to pool their labour value and capital and develop their own industry in a truly free market.

Government is the glue which holds capitalism together. Without it, the economies of scale, the appropriation and centralisation of land and the distortion of inputs and outputs would be impossible. Without a central bank, the destructive tax of inflation wouldn’t be feasible in a competitive currency market. The redistribution of wealth and malinvestment couldn’t occur on the same scale as markets would act as a corrective against these activities. The use of tariffs and patents to lock up technology and create artificial wealth couldn’t happen without the state’s coercive power. Economic organisation is a fluid concept, that changes from place to place and people to people. What is right for one community or tribe is not what is necessarily right for another. A freed market would reflect this, as it would embed markets in pre-existing cultural/social structures and stop the developments of commodification and neo-colonialism that persist presently. This is a world free of state-action and corporate control. This is anarchism.

Bibliography

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Notes:

[1] Chartier, G. 2010, 1

[2] Chartier, G. 2010, 2

[3] Dowd, K. 2014

[4] Childs, R. 1971

[5] Paul, R. 2009, 70

[6] Rifkin, J. 2011, 134

[7] Childs, R. 1971

[8] Childs, R. 1971

[9] Dowd, K. 2014, 85-86

[10] Long, R. 2008

[11] Carson, K. 2002

[12] Carson, K. 2002

[13] Vivero Pol, L. 2015, 9

[14] Vivero Pol, L. 2015, 9

[15] Richman, S. 2013

[16] Richman, S. 2013

[17] Solow, R. 2015

[18] Solow, R. 2015

[19] Carson, K. 2007, 50

[20] Reitzig, L. 2014

[21] Reitzig, L. 2014

[22] Rifkin, J. 2011, 134

[23] Carson, K. 2002

[24] Carson, K. 2002

[25] Shorr, I. 1996

[26] Shorr, I. 1996

[27] de Ugarte, D. 2015

[28] Carson, K. 2002

[29] Carson, K. 2002

[30] Carson, K. 2002

[31] Rifkin, J. 2011, 134

[32] Wellings, R. https://www.youtube.com/watch?v=r94VP3USOuE

[33] Carson, K. 2002

[34] Rifkin, J. 2011

[35] Roberts, D. 2013

[36] Carson, K. 2010

[37] Martin, F. 2013

[38] Polanyi, K. 2002

[39] Carson, K. 2010, 50

[40] Bauman, Z. 2011

[41] Bauman, Z. 2011

[42] Carson, K. 2010, 111

[43] Carson, K. 2002

[44] Carson, K. 2010

[45] Carson, K. 2010

[46] Carson, K. 2010, 256

Economic grace of ‘Social Credit’: national dividend with compensated retail prices for consumer goods distribution in an age of technology

Posted on January 6, 2016 by Reid Mukai

By Wallace Klinck

Source: The Daily Censored

“The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to ‘put people back to work.’” (from the below article)

Five minute video of Major C.H. Douglas, founder of Social Credit (1934):

Because of its deleterious impact on personal freedom and initiative, centralization of both economic and political power is the critical issue facing society. The primary obstacle to reversing this growing concentration of power is an almost universal ignorance of the manner in which the existing financial system renders the price-system increasingly non-self-liquidating, making impossible the recovery of industrial production costs through sales. Institutions and individuals attempt to resolve this problem by resorting to bank debt, thereby obtaining access to the products of industry by the self-defeating expedient of mortgaging our future–i.e., transferring these costs as an exponentially growing debt charge against future cycles of production–and by engaging in an orgy of wasteful and destructive activities, effectively culminating in continuous war.

Their monopolistic proclivities disincline both Finance-Capitalism operating under the Monopoly of Credit and every form of collectivist organization (e.g., socialism, communism or fascism) from grappling with this problem. The solution must entail an appropriate modification of the existing financial-credit and price system so as to properly facilitate distribution of the immense output of modern technology-based industry, in the context of expanding leisure.

Nearly a century ago this emergent challenge was studied in depth by the British engineer Clifford Hugh Douglas, who not only analyzed the defects of the existing price system as it functions under present financial and industrial cost-accounting conventions, but also put forward realistic remedial proposals. Between and for a period after the World Wars, Douglas’s ideas, which he named “Social Credit”, attracted large numbers of adherents and spawned many political movements in countries around the world.

Douglas recognized that life is more than bread alone and that in order to attain his full stature man must be released from unnecessary material concerns in order to make time for matters of the Mind and Spirit. This clearly was inherent in certain much-neglected aspects of the message of Jesus, who explicitly stated that lack of faith is the reason for our obsession with toiling our own way to material survival. Jesus asked how we could doubt that God, who provides for the fish and birds and the beasts, knows our needs and will provide even better for us. On more than one occasion Jesus unconditionally distributed loaves and fishes to crowds that had gathered to hear him. To indicate how reality operates outside of puritanical human notions of morality, Jesus pointed out that his heavenly Father causes the sun to rise on the evil and the good, and lets rain fall on both the just and the unjust.

An aspect of this divine caring is the ability we have been given to accumulate understanding of natural laws, which has resulted in an endless extension of “mechanical advantage”—termed by Social Crediters the Unearned Increment of Association—from which has emerged our amazing modern technology with its outflow of material abundance. Through learning how to associate effectively in the areas of both human endeavours and material resources, we have multiplied our productive capacity many thousands, if not millions, of times over. The historical aggregation of Unearned Increments has provided the vast Cultural Heritage upon which we all so greatly, if unconsciously, depend.

This is the background of why Social Credit came to be perceived by its leading thinkers as “practical Christianity”. Although Douglas did not set out to design it as such, ongoing development of Social Credit thought has revealed it to be uniquely consonant with and revelatory of the assurances given by the founder of the Christian faith.

This realistic perception of our situation is absent from the major ideologies of our time. For example, Libertarians promote the notion that the individual must “make it on his/her own”. No one today (apart maybe from individuals lost in the wilderness) is doing this; all have the benefit of the Cultural Heritage, which ties us in a web of dependencies not only with our contemporaries but also with previous generations.

Socialism, which calls for State ownership and administration of the means of production—the central planning of the economy and of human activity—similarly endeavors to alienate people from their heritage. Besides specifically attacking the very principle of inheritance, Socialists force the energies of the members of society into mandatory employment in projects prescribed by the State. Suppression of individual initiative is an inevitable result of this constraint of access to the possibilities afforded by the richness of the Cultural heritage. This observation applies to all forms of “socialism”, whether national or international in nature.

Social Credit is the inverse of socialism and a negation of finance capitalism. Many persons have it in their minds that a sharing society necessarily is socialistic; i.e., power centralizing. Presumably they think this way on the erroneous assumption that the sharing will be accomplished by redistributing existing wealth by means of various confiscatory forms of taxation. However, Social Credit, uniquely, stands not for redistribution of earned incomes, but rather for distribution of consumer goods at source as they emerge from the production line.

Douglas enunciated and stressed the truism that production without consumption is sheer futility and waste.

The fundamental task of economic policy is to match and balance the cycles of consumption and production. Producers’ costs cannot be recovered without money received from consumers, whose incomes alone provide business its means to liquidate all financial costs of production.

In order to effect this balance, Douglas recommended that National (Consumer) Dividends and Compensated (lowered) Prices at point of retail sale must be provided and financed by a Government Agency (created or existing, whatever is most efficient and convenient) with funds not derived from taxation but drawn down from a properly constructed National Credit Account. This would be a continuously updated actuarial accounting of the nation’s real credit, being an inventory of all those resources which are available to be used for production and which, if so used, may result in the making of financial prices.

Unfortunately, the public are conditioned to reason from the false assumption that the economic “pie” is limited to the financial incomes paid out in production, and hence they perceive this as the only possible source of funding. This assumption includes the erroneous corollary that the price-system is self-liquidating; i.e., that incomes paid out as wages, salaries and dividends are not only equal to, but available to meet, the total financial costs of production. That this is a major fallacy is readily proved by the enormous accumulation of inflationary private and public debt created as loans by the banking system, which allows goods to be purchased after a fashion but does not liquidate their financial costs of production in a synchronized fashion. As a kind of stop-gap expedient, these loans merely transfer these costs into the future, to be liquidated with income derived from later cycles of production unrelated to the cycles in which they were incurred.

The physical (i.e., real) costs of production are met as production takes place. Obviously, if this were not the case, production could not proceed. This is self-evident and axiomatic. When goods are produced in finished form they are meant to be used and should be immediately available to the overall consuming public in toto and without entailing any residual financial debt.

This universal piling-up of debt is bogus and is required only because price increasingly includes, as real capital replaces labor as a factor of production, allocated charges in respect of real capital which are not distributed as income in the same cycle of production. Consumer income is cancelled prematurely, leaving a growing deficiency of income relative to the total prices of goods awaiting purchase. In other words, the flow of final prices increasingly exceeds the flow of effective financial purchasing-power. Purchasing-power is prematurely cancelled in respect of still existing real capital, whereas it should be cancelled only at the rate of actual physical consumption or depletion. Money should be issued at the rate of production and cancelled at the rate of consumption

In the face of this predicament, we can simply forgo acquisition of these goods, leaving the producer no option but to warehouse or destroy them and go bankrupt—making his endeavors a mindless exercise in futility. Or we can ensure that, while required remaining actual “workers” (i.e., recipients of remuneration from others for services rendered) continue to have the benefit of their earnings, all citizens, workers included, have access to the full output of industry by being provided adequate aggregate purchasing-power to make this possible.

Besides being a practical necessity, such an arrangement recognizes the share all have in the almost fantastic Cultural Heritage of Civilization. In a Social Credit dispensation, Inheritance would be generalized.

In stark contrast is the socialist attitude, which is that inheritance is evil and should be abolished.

Social Credit stands most definitely, unashamedly and unabashedly, for a sharing society—and as labor is increasingly reduced by technology it would become more sharing with the passage of time. Unlike Socialism, which in reality has always been more about centralized control than about sharing, Social Credit does not involve State ownership, planning or administration of the economy or of social organization as such. By giving people as individuals full access to the ever-increasing abundance made possible by technology and to concomitant economic independence, it is in fact highly decentralizing.

The rational purpose of technology is to eliminate inefficiency, and “jobs” concocted merely for the sake of distributing incomes are precisely that—mere wasted energy and materials. The solution to the problem of economic insecurity in the modern age of super-production does not lie primarily in “making” work, but increasingly in facilitating

distribution. Those who clamor for “jobs” actually visualize a model along the lines of fascist and communist states, which give and demand of everyone endless work throughout their lifetime, in accordance with the rather suspect dictum that “work will make you free”—but not until you die.

The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to “put people back to work.”

Frankly, if I desire “work”, then I want to do it by my own choice and at my own leisure, increasingly freed from the enforced conformity and servitude of the existing system.

We should not be striving to provide more, and more, human work but rather more technological productive efficiency with augmented effective consumer purchasing-power capable of eliminating consumer debt and liquidating industrial costs in a timely manner. Let robots do the work. Tirelessly and without complaint, they perform the vast majority of it better than people can.

You want more work? Then let’s have another war—or, better yet, continuous wars until we end up destroying the whole planet or all life upon it.

Indeed, the flaws in the current financial system provide a constant incentive for military war, which normally is just an extension of economic war. Unbalanced international trade is driven by the increasing inherent orthodox need to export—not to receive an equivalent of real wealth in return, but to capture financial credits from other nations to compensate for the internal intrinsic deficiency of consumer purchasing-power that exists in the domestic price-system of every nation.

Anyone who does not understand this compulsive destructive dynamic of the modern financial-economic system is totally unqualified even to comment on our economic position.

The abundance that technology makes possible should set men and women free from physical want, increasingly enabling them to choose independently and without duress their preferred activities in life. As opposed to the ubiquitous Keynesian, cognitively dissonant, counterfeit socialist concept of “economic democracy” as a centralized administrative proletarian Work-State, Social Credit gives real meaning to the concept of economic democracy by favoring a consumer-motivated system of production.

C. H. Douglas stressed the importance of understanding policy by tracing its pedigree. From a metaphysical standpoint, Social Credit would be a practical, physical incarnation of the Christian Doctrine of Salvation by Unearned Grace—in contradistinction to the prevailing Judaic conception, and system, of Salvation through Works. The current financial system is predicated upon a materialist philosophy characterizable as do ut des, meaning “this for that”—in other words, that nothing can be obtained except it be earned, that, as the saying goes, “There is no free lunch”. It is the underlying principle of the madness-inducing doctrine of “Salvation through Works”.

Hence, the existing financial system issues money only as debt for production and never for consumption, except in the latter case as debt which must be acquitted by future work This policy of issuing money only for work might have had some basis in equity in the primitive economy where production was primarily due to human effort. It makes no rational or moral sense whatever in the modern highly technological economy where non-human factors of production predominate and human intervention becomes increasingly a mere, although essential, catalyst within a vast productive complex.

Social Credit coheres profoundly with the Christian philosophy of Salvation through Unearned Grace–Grace being an outright gift from God. Spiritual Grace has, or should have, a physical counterpart, or incarnation, in the economic or material realm. Thus, from this philosophical standpoint access to consumer goods and services should increasingly be justified not by work alone but rather by the individual’s share in an inalienable inheritance of the communal capital that has accumulated over the ages. The effect of growth of our historic Cultural Heritage has always been to advance the potential for faster, more diversified and less wasteful productivity, with an accompanying potential for enhanced human leisure.

Christian philosophy holds that it is a major sin to make an end of a means. The rational purpose and end of production is consumption, not to create work (a means). An economic system should provide goods and services for mankind as efficiently as possible with minimal trouble and effort for all concerned.

One might ask how it is possible for a nation such as the United States of America, professedly predicated upon Christian principles, to base its entire economy and social structure upon a financial system that is a total inversion of those principles. A clue to this strange contradiction may be found in Douglas’s observation that Finance and the Established Media are concentric. As a result, he said, society has been hypnotized, with the consequence that only a drastic de-hypnotization can save it.

If society can pursue a continuous, destructive, malevolent and malignant policy of devastating the continents and populations of foreign nations, then surely we can easily pursue instead the civilized alternative of providing (Consumer) Dividends and Compensated (lowered) Retail Prices to support a secure and leisured life for our citizens. Under the existing iniquitous financial system we are driven to deliver those potential Dividends to other nations in the form of bombs. This would appear to be insanity by any rational criterion, but it satisfies the overarching irrational one of providing plenty of “jobs” and “incomes” (not to mention “profits”)—albeit at the additional cost of stupendous physical waste, human suffering and a massive, exponentially expanding financial mortgage burdening our future. This too would appear to be insanity, but apparently not to members of the banking fraternity, which finances it all with conspicuously detached equanimity.

Surely the time is long past when individuals and nations should have stopped “fighting” amongst themselves and instead concentrated their intelligence, energies and talents on demanding reality-grounded financial and economic policies.

I hope that the above commentary may help to clarify some of the major questions and issues often raised about Social Credit.

Dr. Oliver Heydorn has recently published a major informative book, comprehensively incorporating C. H. Douglas’s essential ideas. Refer: http://www.socred.org

Juxtaposing Anarchy: From Chaos to Cause

Posted on June 18, 2015 by Reid Mukai

By Colin Jenkins

Source: The Hampton Institute

Anarchy is synonymous with chaos and disorder. It is a term that stands in direct contrast to the archetype of society we have become accustomed to: hierarchical, highly-structured, and authoritative. Because of this, it carries negative connotations. Merriam-Webster, the consensus source of meaning within the dominant paradigm, defines anarchy as: a situation of confusion and wild behavior in which the people in a country, group, organization, etc., are not controlled by rules or laws; or, a state of disorder due to absence or non-recognition of authority. The implications made in these definitions are clear – any absence of authority, structure, or control most surely amounts to confusion, wild behavior, and disorder. In other words, human beings are incapable of controlling themselves, maintaining order, and living peacefully amongst one another. So we are to believe.

Far removed from the general presentation of anarchy is anarchism, a political philosophy rich in intellectual and theoretical tradition. Again turning to Merriam-Webster, we are told that anarchism is: a political theory holding all forms of governmental authority to be unnecessary and undesirable and advocating a society based on voluntary cooperation and free association of individuals and groups. Even from within the dominant paradigm, we see a wide range of divergence between anarchism, which is presented strictly as an idea, and anarchy, which is presented as the real and absolute consequence (though hypothetical) of transforming this idea to praxis. Juxtaposing these terms, injecting historical perspective to their meaning, and realizing the differences between their usage within the modern lexicon and their philosophical substance should be a worthy endeavor, especially for anyone who feels that future attempts at shaping a more just society will be fueled by ideas, both from the past and present.

While comparing and contrasting the various ways in which anarchy is deployed, we recognize three arenas: 1) Popular culture, which embraces and markets the association of chaos, wild behavior, and disorder; 2) Corporate politics, which uses the term as a pejorative, mostly to describe dominant right-wing platforms like the Tea Party and USAmerican libertarian movement; and 3) In activist and theoretical circles, where anarchism is understood as an authentic and legitimate political philosophy with roots firmly placed in the Enlightenment.

Pop Anarchy and Nihilism: Rebels without a Cause

The anti-authoritarian tendencies of anarchism are understandably attractive in a world that is overwhelmingly authoritative, intensely conformist, and socially restrictive. The conservative nature of American culture, which is notorious for repressing attitudes and beliefs that form outside of the dominant “white, Judeo-Christian” standard, begs for the existence of a thriving subculture that is based on rebellion, if only as an avenue of personal liberation and expression. The 1955 James Dean movie, Rebel without a Cause, offered a first glimpse into this nihilistic backlash against the deadening and soulless culture of conformity as it showcased the contradictory and often confusing nature of adolescence in white, middle-class suburbia.

On the heels of Dean was a baby-boomer revolution fueled by radical inquiry, hippie culture, bohemian lifestyles, and a “British Invasion.” For the better part of a decade, the counterculture movement in the US that came to be known quite simply as “the ’60s” boasted a wide array of meaningful causes, addressing everything from poverty to institutional racism and segregation to war. However, this brief period of revolutionary cause dissipated into a new and distinctly different counterculture through the 1970s and 80s, taking on a rebellious yet counterrevolutionary identity. In contrast to the existentialist nature of the 60s, which sought answers through philosophical exploration, the collective angst that developed in subsequent decades sought individual freedom through nihilism, self-destruction, and chronic apathy. Not giving a shit about detrimental traditions transformed into not giving a shit about anything. In turn, acts of defiance morphed from politically conscious and strategic opposition to oppressive structures to spiteful and self-destructive nothingness.

The revolutionary uprising of the 1960s, which had been stomped out by government suppression and maligned as an “excess of democracy,” was effectively replaced by a reactionary insurrection bankrupt of any constructive analysis or productive goal. This nothingness was embraced by a significant counterculture that developed alongside the punk rock music scene, which flirted with anarchist politics before descending into an egoistic and narrow identity based in privilege. What followed was a brand of “pop anarchy” devoid any meaning beyond contrived images. Acts of rebellion were central, but a cause was neither constructed nor needed. The anarchist and revolutionary symbolism that screamed for meaning was reduced to shallow marketing schemes as remnants of legitimate angst were redirected into childish rants against parents, teachers, “the man,” and “the system” – terms that often carried little meaning for those who used them. The exclusivity that developed made political organizing virtually impossible, and had an alienating effect on many. “Looking at the fact that most people who rear their heads at anarchist ‘movement’ events are roughly between 16-30 years old, with background influences of ‘punk’ or other ‘alternative’ persuasions,” explains one former anarchist from the punk scene, “it is easy to understand why such ‘movements’ tend to alienate most people than interest them.” A major problem that was exposed was demographics. “Punk primarily appealed to middle-class, straight white boys, who, thought they were ‘too smart’ for the rock music pushed by the corporations, still wanted to ‘rock out.’ It is also a culture that was associated with alienating oneself from the rest of society, often times in order to rebel against one’s privileged background or parents.” Because of this, “we have to admit that it was (and still is) exclusive.”

By contrasting US punk culture of this time with its British counterpart, one could see the development of a counterculture that lacked revolutionary meaning or class context. As Neil Eriksen explains:

“The distinctions between US and British punk rock are based solidly on differences in the audience. In the US the counter-cultural character of punk is evident in the primary emphasis on style of dress and posturing. ‘Middle class’ youth can copy the style of the British punks and are afforded the economic and ideological space to make it a whole lifestyle, similar to the way the hippies dropped out, turned on and tuned in. It is primarily those who do not have to work for a living who can afford the outrageous blue, green and orange punk hair styles and gold safety pins. The working class generally cannot choose to go to work with orange hair. In England punk is much more complex, especially given the history of other sub-cultures such as the Mods, Rockers and Skinheads. British punks find in their sub-cultural expressions of music and attitudes, as well as styles, more of an organic indication of their experiences as under- or unemployed youth. In the US, punk has few organic working class roots, and it thus functions as a broad counter-cultural milieu that does not indict the system for lack of jobs, but tends toward nihilism and mindlessness.”

The counterculture described above was a favorable, and almost inevitable, result of both appropriation from above and cooptation at the hands of capitalist profit. Revolutionary politics, in its authentic form, is not a profitable commodity. Instead, the radical roots of anarchist philosophy, which are briefly described in the definition of “anarchism” provided by Merriam-Webster, serve as a threat to any society that possesses extreme divisions of power and wealth. The United States – with its hierarchical governmental structure, no-holds-barred corporate landscape, and extreme divisions between the wealthy and everyone else (20% of the population owns 90% of the wealth) is no exception. For this reason, anarchism has (historically) been appropriated by the dominant culture (which is shaped by this 20%), diluted to anarchy, and served to the masses in the form of entertainment. This process has led to “gradual appearances in mainstream culture over the course of several years, at times far removed from its political origin (described by Situationists as ” recuperation“). These appearances typically connected it with anarchy and were intended as sensationalist marketing ploys, playing off the mainstream association of anarchy with chaos.”

The most recent form of this appropriation has come in the popular television series, Sons of Anarchy, which depicts a California biker gang inundated with drama, drug abuse, senseless murders, gun-running, and gang activity. Despite glimpses and a few mentions of the fictional founder’s manifesto, which included some scattered words by genuine anarchists like Emma Goldman and Pierre Joseph Proudhon, the show clearly chooses chaos and senseless, self-serving crime as its theme. The pinnacle of this appropriation, and ignorance of the rich history of philosophical anarchism, concludes with reviews that refer to one of the show’s main characters, a ruthless, murderous, and power-hungry leader by the name of Clay Morrow, as a ” true anarchist.”

Liberal Enablers and the Right’s Appropriation of Libertarianism

In the midst of the US government shutdown in October of 2013, Senate Majority Leader Harry Reid took to the Senate floor to criticize the move. “We have a situation where we have a good day with the anarchists,” Reid said. “Why? Because the government is closed.” Reid’s comment was meant as a jab to the Republican Party, which was largely responsible for allowing the shutdown to take place, purely as a political ploy. A few days later, Democratic Senator Elizabeth Warren referred to “anarchist tirades” and “thinly veiled calls for anarchy in Washington” coming from Tea Party members in the House as the impetus for the shutdown. Warren even went as far as equating anarchists with “pessimists and ideologues whose motto is, ‘I’ve got mine, the rest of you are on your own,’ while ironically tying in neoliberal deregulation that “tolerates dangerous drugs, unsafe meat, dirty air, or toxic mortgages,” as an “anarchists’ dream.”

“Anarchy” has maintained its status as a pejorative in the modern American liberal lexicon, but not by choice. Borrowing from the nihilism of pop anarchy, it embraces misconceptions, ignores historical roots, and guts the term of genuine meaning. Considering that such rhetoric is coming from folks who have advanced degrees in political science, careers as political pundits, and a working knowledge of history, it can only be explained as calculated fear-mongering. The fact of the matter is that the Republican Party is just as “statist” as the Democratic Party, if only in different ways. And while the approach of political sects like the Tea Party and USAmerican “libertarian” movements present a less-statist platform than their counterparts from within the establishment, their philosophical make-ups (if you can even call them that) include a blatant disregard for the public at-large, an underlying racism that is dangerously oppressive, a love affair with capitalism, a childish refusal to recognize needs outside of privileged interests, a fanatical support for gun rights, and a narrow-minded obsession with protecting private property and personal wealth – beliefs that are more in line with the self-absorbed, reactionary nature of fascism than with the revolutionary, “cooperative individualism” of anarchism. Ultimately, the Tea Party, much like the USAmerican “libertarian” movement, is focused on one goal: protecting an embedded array of privilege and maintaining the status quo; and the means to their end (at least, theoretically) is the coercive power structure of the market, as opposed to that of the state. If and only when the market hierarchy is threatened by, say, a popular uprising, a workers strike, or a movement for civil rights, this brand of “libertarian” views the state – in the form of domestic police and military forces – as a necessary component. In other words, these so-called “anarchists” are really nothing of the sort. Instead, they are more than willing to use state power to uphold historically-based inequities related to wealth accumulation, racism, and class division.

If the cheap political jabs used by liberals were packed with historical context, they could be closer to the truth. However, this would defeat the purpose. Parts of the right-wing have, in fact, appropriated and twisted anarchist philosophy, mostly through a concerted effort to adopt an ahistorical version of “libertarianism.” In his “anarcho-capitalist” manifesto, Betrayal of the American Right, Murray Rothbard explained this intent:

“One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, ‘our side,’ had captured a crucial word from the enemy. Other words, such as ‘liberal,’ had been originally identified with laissez-faire libertarians, but had been captured by left-wing statists, forcing us in the 1940s to call ourselves rather feebly ‘true’ or ‘classical’ liberals. ‘Libertarians,’ in contrast, had long been simply a polite word for left-wing anarchist; that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over, and more properly from the view of etymology; since we were proponents of individual liberty and therefore of the individual’s right to his property.”

Of course, like all others who claim this contradictory title of anarcho-capitalist, Rothbard either failed to recognize “how property results in similar social relations and restrictions in liberty as the state,” or simply believed that “liberty” was synonymous with feudalistic ideals. As one anarchist (of the authentic variety) writer laments, the thought process of this faux-anarchism is that a “capitalist or landlord restricting the freedom of their wage-workers and tenants” is ok, but any such restrictions from “the state” is not. “It’s an oddity that in the United States, the main current of libertarian thought has been twisted and inverted into a kind of monstrous stepchild,” explains Nathan Schneider. “Rather than seeking an end to all forms of oppression, our libertarians want to do away with only the government kind, leaving the rest of us vulnerable to the forces of corporate greed, racial discrimination, and environmental destruction.”

Since the Democratic Party’s use of the term borrows from the simplistic, nihilistic version of “pop anarchy,” rather than the complex, philosophical version of anarchism, it becomes useful within the modern political arena. The true right-wing appropriation of anarchism as noted by Rothbard, which is fabricated in its own right, becomes buried under the fear-mongering and falsely implied association by the likes of Reid and Warren. Historically, this same type of fear-mongering has allowed for fascist scapegoating (Reichstag Fire), capitalist scapegoating (Haymarket Affair), and unlawful state executions ( Sacco and Vanzetti), all designed to exploit widespread ignorance regarding anarchist beliefs and prevent authentic libertarian movements from spreading through the populace. “The figure of the anarchist has long dominated our national imagination,” explains Heather Gautney. “It’s a word that conjures up the lawless, the nihilistic and even the violent. It’s the image Senators Reid and Warren invoked in their talking points against the Republicans.” It’s also an image devoid any real meaning. By removing its substance and demonizing its association, the establishment wins.

Anarcho-Punk, Underground Hip Hop, and Conscious Chaos: Rebels with a Cause

While “pop anarchy” took over much of the American punk scene in the ’70s and ’80s, it was only part of the story. Punk culture still served what Henry Rollins once succinctly described as “the perfect expression of postmodern angst in a decadent society,” creating an outlet for rebellious urges seeping from the dominant culture. It also served as a catalyst for pockets of revolutionary politics. When done right, it was the perfect combination of expression and meaning. The hard, edgy, and chaotic sounds spilling from the music represented a form of liberation that was desperately needed, while the lyrics roared against the establishment and aimed at deadening conformity and the music industry’s increasingly corporatized and cookie-cutter production value. The UK provided an example of this perfection when it birthed anarcho-punk.

“From the numerous situationist slogans that graced the lyrics of early punk bands, to the proliferation of anarcho-punk bands such as Crass and Conflict in the early eighties, punk rock as a subculture has had a unique history of having a strong relationship with explicitly anarchist and anti-capitalist political content over the years,” explains an anonymous Colours of Resistance blogger . “Many anarchists today, including myself, are by-products of punk rock, where most become politicized from being exposed to angry, passionate lyrics of anarcho-punk bands, “do-it-yourself” zines, and countless other sources of information that are circulated within the underground punk distribution networks. Some are introduced to punk through the introduction to the anarchist social circles. Regardless of which comes first, the correlation between the punk scene and the anarchist scene is hard to miss, especially at most anarchist gatherings and conferences.”

Within the anarcho-punk movement, “the possibilities for advances in popular culture in the dissolution of capitalist hegemony and in building working class hegemony” began to surface. “The fact that punk rock validated political themes in popular music once again,” Eriksen suggests, “opened the field” for the left libertarian movements. As an example, punk initiatives like “Rock Against Racism were able to sponsor Carnivals with the Anti-Nazi League drawing thousands of people and many popular bands to rally against racism and fascism” and “openly socialist bands like the Gang of Four were taken seriously by mainstream rock critics and record companies, and thereby were able to reach a broad audience with progressive entertainment.”

Punk ideologies that arose from this era touched on concepts like anti-establishment, equality, freedom, anti-authoritarianism, individualism, direct action, free thought, and non-conformity – many ideas that are synonymous with historical-anarchist thought. This social consciousness naturally led to activism, and specifically, acts of direct action, protests, boycotts, and squatting. These elements represented authentic anarchist philosophy and served as a counter to nihilistic and empty “pop anarchy,” while politicizing many.

Another form of “rebellion with a cause” came from American hip-hop and rap. The rise of hip-hop in the US paralleled that of the punk scene, and shared many of the same revolutionary tendencies. While not explicitly anarchist, hip-hop took on an identity that mirrored authentic anarchist philosophy. Its anti-authoritarian nature was far from nihilistic, but rather survivalist; born in response to centuries of racial subjugation, economic strangulation, and violent oppression at the hands of domestic police forces. Hip-hop’s birthplace, the Bronx (NYC), characterized its development. “Heavily influenced by the economically and socially oppressed ghettoes, along with the echoes of the last generation’s movements for liberation and the street gangs that filled in the void they left,” Derek Ide tells us, “the South Bronx provided the perfect matrix in which marginalized youth could find a way to articulate the story of their own lives and the world around them. In this historically unique context, a culture would be created through an organic explosion of the pent-up, creative energies of America’s forgotten youth. It was a culture that would reach every corner of the world in only a couple decades..”

In the end, hip-hop and gangsta rap provided endless displays of socially-conscious and revolutionary tracks throughout the ’80s and ’90s, and combined with the punk scene to construct a form of “conscious chaos” that provided valuable social and cultural analyses as well as revolutionary goals that sought to establish a more just world. These counter-cultural movements represented an important about-turn from the contrived nihilism and “pop anarchy” that had surfaced in response to the “excess of democracy” in the ’60s, and displayed elements that echoed authentic anarchism, as a revolutionary libertarian philosophy.

Authentic Anarchism and Its Philosophical Roots

The roots of Anarchism, as a school of thought, are firmly placed in the Age of Enlightenment and, specifically, within two major themes stemming from that period: liberalism and socialism. In a sea of definitions, one of the most concise and encompassing is offered by Lucien van der Walt and Michael Schmidt in their 2009 book, “Black Flame: The Revolutionary Class Politics of Anarchism and Syndicalism.” In it, they describe anarchism as “a revolutionary and libertarian socialist doctrine” that “advocates individual freedom through a free society” and “aims to create a democratic, egalitarian, and stateless socialist order through an international and internationalist social revolution, abolishing capitalism, landlordism, and the state.” [1]

Anarchism’s roots in the Enlightenment are undeniable. From Jean-Jacques Rousseau’s “Discourse on Inequality” to Wilhelm von Humboldt’s “The Limits of State Action,” the libertarian strain born of this time served as the precursor to the anarchist thinkers of the 19^th and 20^th centuries. Their similarities are found in a philosophical examination of social inequities like personal wealth, private property, political power, and all forms of authority established within human societies – elements that are heavily scrutinized by anarchists. However, despite these roots, Schmidt and van der Walt tell us that anarchism should be considered “a relatively recent phenomenon” that emerged specifically “from the 1860s onward within the context of the modern working-class and socialist movement, within the womb of the First International.” [2] For this reason, anarchism can most aptly be described as “socialism from below.” In fact, the demarcation between enlightenment philosophy and anarchist thought is generally found in their distinct reactions to hierarchies created by systems of monarchy, feudalism, and theocracy (enlightenment) and hierarchies created by the exploitative nature of capitalism and the modern liberal, democratic state (anarchism).

The development and separation of anarchism from the Enlightenment was made clear by prominent anarchist thinkers at and around the turn of the 20 ^th century. In the years following the Paris Commune, Russian revolutionary anarchist, Mikhail Bakunin, expressed his disgust with the idea of a “purely formal liberty conceded, measured out and regulated by the State, an eternal lie which in reality represents nothing more than the privilege of some founded on the slavery of the rest,” and “the shabby and fictitious liberty extolled by the School of J-J Rousseau and the other schools of bourgeois liberalism, which considers the would-be rights of all men, represented by the State which limits the rights of each – an idea that leads inevitably to the reduction of the rights of each to zero.”[3] A few decades later, in a critique of liberalism, Peter Kropotkin denounced the aim of all so-called “superior civilizations,” which was “not to permit all members of the community to develop in a normal way,” but rather “to permit certain, better-endowed individuals fully to develop, even at the cost of the happiness and the very existence of the mass of mankind.” This separation had much to do with the newly developed social constraints stemming from capitalism. As Noam Chomsky explains, “It is true that classical libertarian thought is opposed to state intervention in social life, as a consequence of deeper assumptions about the human need for liberty, diversity, and free association…” however, “on the same assumptions, capitalist relations of production, wage labor, competitiveness, and the ideology of ‘possessive individualism’ all must be regarded as fundamentally antihuman” as well. For this reason, he suggests, “libertarian socialism is properly regarded as the inheritor of the liberal ideals of the Enlightenment,” while it also embraces its own identity through the inclusion of a class analysis and critique of the coercive structures stemming from the capitalist hierarchy.[4]

The socialist nature of anarchism represents a fundamental current in both its thought and process, yet is often overlooked by many who claim to be anarchists, especially in the United States. This misunderstanding is caused by both pro-market (and even pro-capitalist) “libertarian” movements that are ahistorical and seemingly blind to the authoritative structures of modern, industrial capitalism, as well as by the abovementioned “pop anarchy” phenomenon and “liberal enabling” that falsely limit anarchism to a vague and unsophisticated “anti-government” stance. Superficial dualities that have captured consensus thought, most notably that of “collectivism vs. individualism,” are also largely responsible for this misinterpretation. Because of this, the virtual disappearance of class analysis from modern libertarian thought in the United States not only represents a significant departure from nearly two centuries of libertarianism, but also neglects to address a highly-authoritative and hierarchical private structure that has long surpassed its governmental counterpart. Schmidt and van der Walt explain the importance of rejecting “pop anarchy” stereotypes and maintaining this class analysis within anarchist thought:

“For anarchists, individual freedom is the highest good, and individuality is valuable in itself, but such freedom can only be achieved within and through a new type of society. Contending that a class system prevents the full development of individuality, anarchists advocate class struggle from below to create a better world. In this ideal new order, individual freedom will be harmonised with communal obligations through cooperation, democratic decision-making, and social and economic equality. Anarchism rejects the state as a centralised structure of domination and an instrument of class rule, not simply because it constrains the individual or because anarchists dislike regulations. On the contrary, anarchists believe rights arise from the fulfilment of obligations to society and that there is a place for a certain amount of legitimate coercive power, if derived from collective and democratic decision making.

The practice of defining anarchism simply as hostility to the state has a further consequence: that a range of quite different and often contradictory ideas and movements get conflated. By defining anarchism more narrowly, however, we are able to bring its key ideas into a sharper focus, lay the basis for our examination of the main debates in the broad anarchist tradition in subsequent chapters, and see what ideas are relevant to current struggles against neoliberalism.”[5]

When considering and rejecting both public and private forms of restriction, the most fundamental element of authentic anarchism clearly becomes cooperation. This theme was thoroughly established by Kropotkin in his 1902 classic, Mutual Aid: A Factor of Evolution, in which he pointed to “the practice of mutual aid, which we can retrace to the earliest beginnings of evolution, we thus find the positive and undoubted origin of our ethical conceptions; and we can affirm that in the ethical progress of man, mutual support not mutual struggle – has had the leading part. In its wide extension, even at the present time, we also see the best guarantee of a still loftier evolution of our race.” This theme was echoed by Rudolf Rocker in his 1938 treatise on Anarcho-Syndicalism. Said Rocker, “Anarchism is a definite intellectual current in the life of our time, whose adherents advocate the abolition of economic monopolies and of all political and social coercive institutions within society” while calling on “a free association of all productive forces based upon cooperative labor” to replace “the present capitalistic economic order.”[6]

Why Does this Matter?

The importance of Anarchist theory lies in its critique of hierarchies and the uneven distribution of power emanating from such. This makes this school of thought an important component as we move forward in attempting to address the pervasive ills of society, whether coming from the state or corporate structures that tower over us. The mere questioning of these “authorities” is crucial in itself. As Chomsky tells us:

“… any structure of hierarchy and authority carries a heavy burden of justification, whether it involves personal relations or a large social order. If it cannot bear that burden – sometimes it can – then it is illegitimate and should be dismantled. When honestly posed and squarely faced, that challenge can rarely be sustained. Genuine libertarians have their work cut out for them.” <[7]

While many socialist-oriented strains incorporate this same analysis, some do not. Essentially, regarding the formation of class-consciousness, anarchist theory of all varieties (syndicalism, mutualism, communism, etc.) act as ideal compliments to historically strong currents of Marxism, Leninism, Maoism, and Trotskyism, and should be included within all such theoretical considerations. When transforming theory to praxis, anarchism’s inclusion of worker collectivization in the form of labor or trade unions prove valuable in this regard. In his treatise on Syndicalism, Rocker made a compelling argument for the usefulness of this brand of anarchism as a component to working-class emancipation. For the Anarcho-Syndicalists,” says Rocker, “the trade union is by no means a mere transitory phenomenon bound up with the duration of capitalist society, it is the germ of the socialist economy of the future, the elementary school of socialism in general.” He continues, “Every new social structure makes organs for itself in the body of the old organism. Without this preliminary, any social evolution is unthinkable. Even revolutions can only develop and mature the germs which already exist and have made their way into the consciousness of men (and presumably, women); they cannot themselves create these germs or generate new worlds out of nothing.” [8]

Putting this philosophy into action is still of utmost importance. Creating a brand that is palatable and accessible to the working-class majority, without sacrificing its revolutionary tone and message, is also crucial. In his 2013 book, “Translating Anarchy: The Anarchism of Occupy Wall Street,” Mark Bray stresses the importance of deploying a practical anarchism which avoids the esoteric idealism that so many genuine and well-intentioned anarchists get bogged down in. This pragmatic approach is perhaps most important when attempting to relay information via short interviews and sound bites. Bray points to three specific lessons he learned while interacting with mainstream media during his time at Zuccotti Park:

“First, I learned the value of presenting my revolutionary ideas in an accessible format. How I dress, the words I choose, and how I articulate them affect how I am received, so if my primary goal is to convince people of what I am saying, then it’s often useful to shed my “inessential weirdness.” Second, I realized the usefulness of letting tangible examples sketch the outline of my ideas without encumbering them with explicit ideological baggage. Finally, I concluded that the importance that Americans place on the electoral system dictates that any systematic critique should start with the corporate nature of both parties. Like it or not, that’s where most people are at in terms of their political framework, so if you skip past the candidates to alternative institutions, for example, without convincing them of the bankrupt nature of the electoral system, you’ll lose them.” [9]

Essentially, anarchism is what democracy is supposed to be – self-governance. In this sense, anyone even remotely involved in the Occupy movement had the privilege, likely for the first time in their lives, to truly witness democracy (anarchism) in action. “This is not the first time a movement based on fundamentally anarchist principles – direct action, direct democracy, a rejection of existing political institutions and attempt to create alternative ones – has cropped up in the US,” explains David Graeber. “The civil rights movement (at least, its more radical branches), the anti-nuclear movement, the global justice movement … all took similar directions.” And, in a country where a large majority of citizens have given up on and/or no longer believe in their representatives, a little democracy may be exactly what we need, even if it’s not what our white, wealthy, slave-owning “founding fathers” wanted. “Most (of the founding fathers) defined ‘democracy’ as collective self-governance by popular assemblies, and as such, they were dead set against it, arguing it would be prejudicial against the interests of minorities (the particular minority that was had in mind here being the rich),” Graeber tells us. “They only came to redefine their own republic – modeled not on Athens, but on Rome – as a ‘democracy’ because ordinary Americans seemed to like the word so much.”

In our inevitable and necessary escape from the faux democracy of America’s colonists and founders, anarchist thought will undoubtedly play a role. It is, after all, the only school of thought that can be described as authentic, class-based libertarianism. Its foundation is the reasonable expectation that all structures of dominance, authority, and hierarchy must justify themselves; and, if they cannot, they must be dismantled.

This covers ALL coercive institutions – not only governments, the state, police, and military, but also cultural phenomena like patriarchy, racism, and white supremacy, and most importantly, economic systems like capitalism. Unlike modern forms of “libertarianism” in the US, which ignore racist structures and the historical formations behind them, and falsely view the labor-capital relationship inherent in capitalism as a “choice,” authentic Anarchism correctly views such elements as coercive and forced; and seeks to dismantle them in order to move forward with constructing a society based on free association, where all human beings have a healthy degree of control over their lives, families, and communities.

Contrary to consensus thought (propaganda), such as those rooted in “rugged individualism” and “American exceptionalism,” there is a collective and cooperative nature to true liberty. We simply cannot gain control over our lives until we learn to respect the lives of all others. This is the essence of community. And we cannot begin to do this until we deconstruct illegitimate hierarchies of wealth and power, which have been constructed through illegal and immoral means over the course of centuries. Recognizing these structures and realizing that they are NOT legitimate, and therefore do not deserve to exist, is the first step in this process. Embracing contributions from this school of thought is crucial in this regard.

Fundamentally, Anarchism is a working-class ideology. Occupy Wall Street was largely influenced by it. Workers’ co-ops are largely influenced by it. Any action that attempts to establish free association within society can learn much from it. Its foundational requirement of organic human cooperation and peaceful co-existence has been tried and tested throughout history – from hunter-gatherer societies across the world to Native American communities to the Paris Commune to revolutionary Catalonia to Chiapas. It provides a philosophical foundation – not a rigid blueprint – that allows for limitless potential in attempting to solve our problems, collectively, while trying to carve out a meaningful human experience for everyone. It may not provide all answers, or even most, but its foundation is worthy of building from, or at least considering. Its true value is found in its inclusion of historical formations as well as its role as a catalyst for new ideas and action – something we desperately need, moving forward.

Notes

[1] Schmidt, Michael & van der Walt, Lucien. Black Flame: The Revolutionary Class Politics of Anarchism and Syndicalism. AK Press, 2009, p. 33

[2] Schmidt & van der Walt, p. 34

[3] Guerin, Daniel. “Anarchism: From Theory to Practice.” Monthly Review Press, 1970. Taken from the Preface by Noam Chomsky.

[4] Chomsky on Anarchism , selected and edited by Barry Pateman. AK Press: 2005, p. 122-123

[5] Schmidt and van der Walt, p. 33

[6] Rudolf Rocker, Anarcho-Syndicalism: Theory and Practice, 6^th edition. AK Press, 2004. P. 1

[7] Chomsky on Anarchism , p. 192.

[8] Rocker, P. 59.

[9] Mark Bray, Translating Anarchy: The Anarchism of Occupy Wall Street. Zero Books, 2013.

Against All Bosses: Government AND Corporate

Posted on March 20, 2015 by Reid Mukai

By Kevin Carson

Source: Center for a Stateless Society

I keep resolving not to comment on any more of Alternet‘s by-the-numbers anti-libertarian puff pieces, but a recent one from David Masciotra (“You’re Not the Boss of Me: Why Libertarianism is a Childish Sham,” February 26) is in its own category of wretchedness.

Masciotra’s commentary includes two seemingly contradictory lines of argument. In the first, he dismisses anti-authoritarianism, as such, as the ethos of a spoiled toddler:

the protest of children who scream through tears, “You’re not the boss of me.” The rejection of all rules and regulations, and the belief that everyone should have the ability to do whatever they want, is not rebellion or dissent. It is infantile naïveté.

He associates this infantile rejection of all authority with selfishness and anti-sociality. In fact it “does not even rise to the most elementary level of politics,” which Aristotle defined as “the things concerning the polis,” or the community. Confucius associated politics with an ethics of “communal service with a moral system based on empathy.” This, in contrast to libertarianism, which “eliminates empathy, and denies the collective,” and opposes “any concept of the common good” or organizing communities “in the interest of solidarity.”

And of course because this is an Alternet attack on libertarianism, he can’t get through it without mentioning Ayn Rand — “the rebel queen of their icy kingdom.” Oddly enough, he didn’t manage to drag in the Koch brothers.

Just in passing, it’s a bit odd that none of Alternet‘s stable of center-left critics of libertarianism seem to have any idea that the movement might have ideological roots older than last Tuesday. American libertarianism as an organized political movement — the movement that later gave birth to the Libertarian Party — has its origins more or less in the radicals who dropped out of Young Americans for Freedom in 1968. But radical free market thought didn’t start with them, or with Ayn Rand, or even with Ludwig von Mises. It goes back to the classical liberalism of two hundred and more years ago.

And classical liberalism was a very diverse and varied movement, including some quite left-leaning strands, who considered themselves socialists as well as free market libertarians. This shouldn’t be surprising, given that the origins of classical liberalism, socialism and anarchism are so closely intertwined in the culture of the Enlightenment, and overlapped so heavily in their formative period of the 1820s through 1840s.

Two of my strongest ideological influences were the free market libertarians Thomas Hodgskin in England and Benjamin Tucker in the U.S., both of whom were socialists and saw the state’s primary role as intervening in the market on behalf of landlords and capitalists to enforce rents on the artificial scarcity of land and capital. And left-wing strands (like the thought of Henry George) persisted in American classical liberalism afterwards, and have continued to exist even in the modern libertarian movement.

Although contemporary American libertarianism is generally right-leaning and much of it is corporate-influenced, it still contains leftward-oriented strands — many of them quite anti-corporate, or (like me) even anti-capitalist. At his most left-friendly phase in the late ’60s, for example, prominent libertarian Murray Rothbard collaborated with New Left scholars like Ronald Radosh and the Studies on the Left group. During this period Rothbard described the main function of “our corporate state” as subsidizing the operating costs of big business and the accumulation of capital.

After all this, though, Masciotra dismisses libertarians as not being rebellious enough. Their rebellion disguises “their subservience to — for all their protests against the ‘political elite’ — the real elite.”

Who then are the libertarians rebelling against? The most powerful sector of the society is corporate America, and it profits and benefits most from the deregulatory and anti-tax measures libertarians champion. That sector of society also happens to own the federal government. Through large campaign donations and aggressive lobbying — the very corruption that libertarians help enable by defending Citizens United and opposing campaign finance reform — they have institutionalized bribery, transforming the legislative process into an auction. Libertarians proclaim an anti-government position, but they are only opposing the last measures of protection that remain in place to prevent the government from full mutation into an aristocracy.

Masciotra might be surprised to know I actually agree with most of this, and I’m a libertarian. My understanding of government as something that serves the interest of propertied classes, protects big business from competition, and funnels rents on artificial scarcity and artificial property upward from the producing classes to the plutocracy is one of the reasons I became a libertarian and an anarchist.

And one of the primary targets of my writing has been the right-leaning sort of libertarian who ignores the extent to which Corporate America owns the federal government. These people pass over the primary function of government — intervening in the market to facilitate rent extraction by the propertied ruling classes — and focus entirely on eliminating the secondary functions like partially restricting abuses of those ruling classes’ power and stabilizing the worst side-effects of corporate power.

My hatred of bosses is at the root of my identification, not only as a libertarian — but as a Leftist. My instinctive affinity for the “you’re not the boss of me” sentiment, which Masciotra dismisses contemptuously, is the reason I so strongly support labor struggle and radical unions like the I.W.W.

I believe that institutional hierarchies of all kinds are bad — corporate, government, university, etc. — because they suppress the free flow of information and feedback that those in authority don’t want to hear. They create conflicts of interest in which those at the top appropriate the gains from contributions to productivity from those below, and shift costs and blame downward — basically kind of stuff anyone who’s worked under a boss, or reads Dilbert, knows instinctively.

And my belief in free markets doesn’t mean that I lionize “rugged individualism,” or believe that the cash nexus should dominate most aspects of social life. It just means I don’t think the state should interfere with voluntary exchange where it exists. In fact I strongly support a solidaritarian society build on the kinds of self-organized working class institutions for mutual aid that Pyotr Kropotkin and E.P. Thompson described in their writing. I’m strongly influenced by Elinor Ostrom’s views on the governance of common pool resources. And I think that most economic activity in a free society would take place through forms of voluntary interaction other than money exchange — the social and gift economy and commons-based peer production, among them.

If Masciotra took a break from constructing his libertarian strawmen for a minute and checked out the diverse array of real people within our movement, he might find he actually has stuff in common with some of us.

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