Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“The yeomanry of the country possess the lands, the weight of property, possess arms, and are too strong a body of men to be openly offended - and, therefore, it is urged, they will take care of themselves, that men who shall govern will not dare pay any disrespect to their opinions.”     Richard Henry Lee

March 12, 2006

They Came At Us In The Same Old Way ….

by Eric

I noticed a link to The Liberty Papers from a blog that I hadn’t seen in a quite a while, Le Revue Gauche. Eugene, for those who’ve never been to his blog, is “an unabashed libertarian communist”. For those faithful readers who find this combination of words a bit suprising, it’s important to understand that there are really two separate and distinct anarchist movements. One on the Left of the economic spectrum and the other on the right of the spectrum. Both, naturally, are all at the extreme individualism end of the spectrum dealing with state authority. Libertarian communism, aka anarcho-syndicalism or, simply, anarchy, is descended from the socialism and romanticism of the 19th century. If you stop by Eugene’s blog you will notice references to Karl Marx, Pyotr Kropotkin and Mikhail Bakunin, rather than Murray Rothbard, Ayn Rand or Robert Heinlein. It turns out that Eugene wrote an entry about Free Trade and used Hong Kong and Somalia as examples.

Specifically, Eugene linked to my article on Monopolies, Markets and Microsoft and said the following (note the words in bold are where the link is contained).

And the capitalist state is not just any kind of government, it is a specific kind of government that regulates the market in favour of stability for the creation of monopolies. As the history of Hong Kong and of course British and American capitalism shows. This is the history that the right wing of course has always revised, whether it is the Heritage Foudation or the Von Mises Institute.

I thought this was curious, since my article flies in the face of the normally accepted position among libertarians. I finally decided that Eugene had not really read my article in context, nor the discussion that followed. That, in fact, I happen to believe that government promotion of corporatism is a major problem and the anti-thesis of capitalism. More importantly, he betrays an idea that is part of the Left’s meme war. This particular idea has been so effective that many on the Left don’t even recognize just how false it is, perhaps even Eugene doesn’t. The idea that has been promoted since the the mid-19th century is:

Corporatism = Capitalism

Anyone that has read Adam Smith and then looks at how supposedly capitalist economies work would recognize that the USA and UK are not capitalist in any sense of the word. The purpose of government, from a capitalist perspective, is to provide a neutral framework for the market to work within. It should not favor producer, retailer nor consumer, nor should it favor management or labor. By continuously aligning the idea that a scenario where government favors management over labor in the employment market and favors centralized corporations over small businesses and consumers in the broader market, the Left has successfully created the idea that this is Capitalism. Of course, I’m glossing over a lot of the progressive theory of the Left, which would argue that the corporatism of the the 1870′s through today represents the progression from feudalism to mercantilism to capitalism to corporatism and is the means by which class struggle is played out (heh, I can use those terms, even when they just make me want to chuckle).

Eugene (and many others on the Left) is using the Von Mises Institute’s discussion of Somalia to show that anarcho-capitalism perpetuates the “class struggle”. Indeed, the Left points to the issues of drought and starvation in Somalia to show that warlords, strongmen and feudalism will arise in an anarcho-capitalist system, completely ignoring the punch-line from the Mises article:

A democratic government has every power to exert dominion over people. To fend off the possibility of being dominated, each clan tries to capture the power of that government before it can become a threat. Those clans that didn’t share in the spoils of political power would realize their chances of becoming part of the ruling alliance were nil.

What everyone ignores is the bull in the china shop, the UN. It is the UN and the Western states that are trying to create a democratic government in Somalia. Which is a significant contributing factor to the warlords having power. Even disregarding all of that, what Eugene ignores is that Somalia is better off than their neighbors in the Horn of Africa. You know, those neighboring countries that have governments and written laws instead of clans, warlords and customary law.

I don’t particularly think Somalia is a good example of the outcome of anarcho-capitalism since it isn’t anarcho-capitalism. It is completely distorted by the intervention and meddling of a wide variety of governmental organizations. And, even so, with the almost non-existent national government they are managing to do better than their neighbors. That, by itself, should tell us something.

More importantly, if you want to tackle capitalism, I’m game for the debate. But, the Left continues to try and equate corporatism and proto-fascism with capitalism. They come at us in the same old way, time after time.

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  1. My favorite part: ”Markets and trade are never free. Someone reaps the rewards, someone pays for the rewards, and someone certainly pays for its consequences.”

    There’s no need to confuse him with facts…he’s already settled on a comfortable position.

    Comment by Robert — March 13, 2006 @ 11:33 am
  2. Actually I did read your article. Which is why I linked to it. Rather than using what you call the Gramcisian Meme I thought I would show that amongst the competing ideologies in the American Libertarian community there were those who mistake corpratism, what I call state capitalism, with the free market.
    Your comment; “happen to believe that government promotion of corporatism is a major problem and the anti-thesis of capitalism.” Is one of those comments that always fascinates me. Since capitalism is a historic development, this continual fantasy that there is some ideal free market somewhere is a historical, but fits well within science fiction. Which is why SEK3 and Heinlein etc. appeal to you folks. Your theory is nice, but outside of historical reality.
    And check out my blog use the technocrati search and you will see I have blogged on Rothbard, Heinlein etc.
    We just happen to disagree, I am after all a dialectical materialist, and no Robert I have not settled on a comfortable position unlike my friends on the right, I do look at the facts of history, which shows capitalism not to be the “unknown ideal” but a well defined historical moment.

    Comment by Eugene Plawiuk — March 13, 2006 @ 1:00 pm
  3. For the record, the passage that I quoted in my comment was from this piece, which you quoted in your article, so I was really referring to its author. I must admit, however, that I assumed an agreement, on your part, with the sentiment. Am I wrong in that? If so, can you support those claims?

    Comment by Robert — March 13, 2006 @ 3:08 pm
  4. Eugene, I can point to actual capitalism (as opposed to corporatism) in action and functioning. It is, of course, almost all extra-political. Can you point to functioning socialisms? I’d love to have one pointed out to me to discuss.

    P.S. I like Heinlein because 1) He wrote some great stories 2) He used a fantastic setting to explore issues within the world we inhabit. I’m not silly enough to think that his books are real, or even could be real.

    Comment by Eric — March 13, 2006 @ 10:31 pm
  5. Spot on again, Eric! “Corporatism” should be an everyday part of the libertarian capitalist vocabulary, perhaps replacing “mercantilism.”

    Speaking of mercantalism, do you think corporatism and mercantilism are the same thing? If not, how are they different? I’m remembering for example the East India Company.

    Comment by Sean Lynch — March 14, 2006 @ 2:20 pm
  6. In my opinion corporatism is the historical successor to mercantilism. Corporatism encapsulates some of the ideas of capitalism to transition from the zero sum ideas of mercantilism to a more modern, but still state centric, approach to trade, industry and economics.

    Comment by Eric — March 14, 2006 @ 3:32 pm
  7. I linked to this post from Catallarchy, but I had trackbacked once with a broken title and it won’t send a second trackback :)

    Comment by Sean Lynch — March 14, 2006 @ 7:23 pm
  8. A functioning socialism is exactly what most communist states turn into. Given the nature of humans, the socialism that Marx proposed results in all those wonderful things that we see coming out of the communist states; famine, mass murder, poverty, ecomonic collapse, overwhelming scarcity coupled with uselelss abundance. Socialmism functions exactly as it should, given reality, wherever it is implemented. The same holds true for market systems. Since thay take the reality of human nature into account far better, they work far more optimally.

    Comment by Stephan — March 14, 2006 @ 9:10 pm
  9. I meant economic

    Comment by Stephan — March 14, 2006 @ 9:10 pm
  10. Sorry Stephan, what I was trying to get at is that I can point to actual capitalism in action, functioning the way we would predict it to function. The Left cannot point to actual socialism in action, functioning as they predict it to. We can see plenty of cases where it functions completely dysfunctionally, as you point out. But, try to find an example above the level of a few people where socialism works as predicted, or even close to it.

    If someone can show me one, I’d love to discuss it.

    Comment by Eric — March 14, 2006 @ 10:55 pm
  11. The only cases of functioning socialism that seem to be practically possible are small unit structures, such as the family structure, or hutterite and Jewish communes. That sort of thing. I personally believe that the only reason that these are capable of functioning is due to the fact that they are small bodies in which all participants know each other. Thus, the problem of economic calculation is very small or nonexistant. Furthermore, in these little structures there is little room for the sort of tragedy of the commons that exists commonly under largescale socialism. Since everyone knows each other the moral and social pressure to not take advantage of the system is very small. Hows that Eric?

    Comment by Stephan — March 15, 2006 @ 5:55 pm
  12. I would wholeheartedly agree with you. I would, in fact, argue that at the level of social structure where everyone knows each other, communal economic structures will work best. Market structures will not work well at that level, if at all. The Jewish Kibbutz is a perfectly valid example of a functioning socialism. I suspect, although I’m not sure I’ve got enough data to go on, that the primary reason for the dysfunctionality of larger socialisms is exactly what you posit Stephan.

    Comment by Eric — March 15, 2006 @ 7:15 pm
  13. Hayek nailed the difficulty with implementing socialism of any size. Before we can decide how to allocate resources we have to decide what we want to “do” with these resources, which is ultimately a value judgement – or rather, many value judgements that are all interlated. For example, deciding how many trees to cut is a balancing act between how much wood we need and how much environmental damage we are willing to do – and all of that is compunded by limit on the accuracy of our projections. Since each of us has a different moral heirarchy, we have different opinions about where to draw the line regarding various tradeoffs.

    As the group increases in size, the number of potential conflicts increases exponentially and the probability of deadlock approaches one quickly – deadlock happening when no plan on what to “do” can get democratic majority support.

    Comment by r4d20 — March 16, 2006 @ 7:16 pm
  14. More importantly then democratic majority support, the plan cannot any longer take into account the varied value judgements and specific necessities of all the people living in such a society. the result is a collapse in all but the most obvious of goods allocations; ie: people need food, people need electricity. And even within the scope of these the how much and where of the matter is impossible to figure out by the planners. Hence widespread black markets, the natural survival mechanism of a planned society.

    Comment by Stephan — March 20, 2006 @ 10:43 pm

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