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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Thursday, January 27, 2005

R. A. Wilson on Property

This quote comes from BK Marcus, although Brad Spangler drew my attention to it.

"Property is theft." -- P.J. Proudhon

"Property is liberty." -- P.J. Proudhon

"Property is impossible." -- P.J. Proudhon

"Consistency is the hobgoblin of small minds." -- Ralph Waldo Emerson

Proudhon, by piling up his contradictions this way, was not merely being French; he was trying to indicate that the abstraction "property" covers a variety of phenomena, some pernicious and some beneficial. Let us borrow a device from the semanticists and examine his triad with the subscripts attached for maximum clarity.

"Property1 is theft" means that property1 created by the artificial laws of feudal, capitalist, and other authoritarian societies, is based on armed robbery. Land titles, for instance, are clear examples of property1; swords and shot were the original coins of transaction.

"Property2 is liberty" means that property2, that which will be voluntarily honored in a voluntary (anarchist) society, is the foundation of the liberty in that society. The more people's interests are co-mingled and confused, as in collectivism, the more they will be stepping on each other's toes; only when the rules of the game declare clearly "This is mine and this is thine," and the game is voluntarily accepted as worthwhile by the parties to it, can true independence be achieved.

"Property3 is impossible" means that property3 (=property1) creates so much conflict of interest that society is in perpetual undeclared civil war and must eventually devour itself (and properties 1 and 3 as well). In short, Proudhon, in his own way, foresaw the Snafu Principle. He also foresaw that communism would only perpetuate and aggravate the conflicts, and that anarchy is the only viable alternative to this chaos.

It is averred, of course, that property2 will come into existence only in a totally voluntary society; many forms of it already exist. The error of most alleged libertarians -- especially the followers (!) of the egregious Ayn Rand -- is to assume that all property1 is property2. The distinction can be made by any IQ above 70 and is absurdly simple. The test is to ask, of any title of ownership you are asked to accept or which you ask others to accept, "Would this be honored in a free society of rationalists, or does it require the armed might of a State to force people to honor it?" If it be the former, it is property2 and represents liberty; if it be the latter, it is property1 and represents theft.

-- The Illuminatus! Trilogy, Hagbard Celine

Paging Walter Lippmann!

Matthew Yglesias comes to the defense of unfairly maligned paternalism:

One thing I would observe is that paternalism quite literally gets a bad name. The implication is that any observation that a given person may, if left to his own devices, fail to act in his own best long-term interests is somehow infantilizing. This, however, is silly. That perfectly normal adult human beings often fail to act in their own best long-term interests is clear and well known. Associating efforts to prevent such behavior with treating people like children is unfair. The point is simply that people tend to stay alive for quite a long time and the interests of you-now (i.e., the decision-maker) can quite easily diverge from the interests of you-in-two-decades even though you-in-two-decades is a person whose interests ought to count just as you-now's interests count. Beyond that simple divergence of interests, there are some systematic biases in decision-making that stem from the fact that human beings did not evolve so as to have a natural grasp of statistics and so forth. We all have an inbuilt tendency to completely neglect small chances, even if the consequences of those small chances are enormous.

Yglesias, it seems, believes in immaculate expertise--pure, disinterested know-how, uncorrupted by the private interests of the expert. Yes, the interests of "me-in-two-decades" may conflict with those of "me-now." But how are we to know that the expert won't confuse the interests of me-in-two-decades with those of, say, the-expert-now?

The "Progressive" ideology of the New Class at the turn of the Twentieth Century (and its British counterpart, Fabianism) was very big on the potential of disinterested expertise to solve society's problems. Exploitation resulted, not from an inherent conflict of class interest, but from a want of proper education. If everybody was properly educated and properly supervised by New Class social engineers, social conflict would come to an end and society would be run efficiently and harmoniously. The key to efficiency, for the New Class, was to remove as much of life as possible from the domain of "politics" (that is, interference by non-professionals) and to place it under the control of competent authorities.

Unfortunately, the New Class actually wound up, in practice, serving the interests of the ruling class. The corporate reorganization of the capitalist economy was brought about by the managerial New Class; the Taylorist deskilling of work processes, also, was made possible by New Class engineers.

In the realm of social welfare, health, and education, the New Class was likewise tempted to mistake its own interests for those of its wards. In every area of life, as Ivan Illich wrote (in Deschooling Society), the citizen/subject/resource was taught to "confuse process and substance."

Health, learning, dignity, independence, and creative endeavor are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question.
As a corollary of this principle, the public was taught to "view doctoring oneself as irresponsible, learning on one's own as unreliable, and community organization, when not paid for by those in authority, as a form of aggression or subversion."

In virtually every area of life, the average citizen was to be transformed from Jefferson's self-sufficient and resourceful yeoman into a client of some bureaucracy or other. The educational system was designed to render him a passive and easily managed recipient of the "services" of one institution after another. The schools, having trained him in an ethos of personal advancement by impressing the proper authority figures, having rendered him docile and fearful of making waves, and having taught him to line up on command and to eat and piss at the sound of a bell, in due time handed him off to the corporate Human Resources bureaucrats.

In all realms, the New Class wound up administering its human raw material, not (as professed) for its own good, but to "adjust" it to its role in the corporate state. As Christopher Lasch wrote of Jane Addams (in The New Radicalism in America),

The trouble was that Jane Addams was asking, in effect, that young people be adjusted to a social order which by her own admission was cynically indifferent to their welfare. She confronted a moral problem with a manipulative solution. Having laid bare the brutalizing effects of industrial labor, having made clear that the demands of the factory and the sweatshop and of the whole economic system of which they were the tangible expression were incompatible with the demands of human dignity, she proceeded to look for ways of reconciling people to their work Industrial society, according to Jane Addams, was a terrific engine of repression; yet her own efforts seemed often to have as their aim only to make its parts run more smoothly.

Although the early Progressives and Fabians had an ideological affinity for nationalization of industry and other forms of economic radicalism, their central passion was for planning and rationality. And most New Class intellectuals saw, in the end, the political impossiblity of expropriating capital. The large capitalists, in turn, recognized the value of the welfare and regulatory state for maintaining social stability and control, and for making possible the political extraction of profits in the name of egalitarian values. They saw paternalism as the best way to get the most out of workers in the long run. The result was the devil's bargain described by Hilaire Belloc in The Servile State and by William English Walling in Socialism As It Is: the New Class, its lust for regimentation and management satisfied, was coopted as a junior partner of the corporate plutocracy.

Thus, the main line of Progressivism developed into what New Left historians call "corporate liberalism." The themes of corporate liberalism, as David Noble described them in America by Design, were

cooperation rather than conflict, the natural harmony of interest between labor and capital, and effective management and administration as the means toward prosperity and general welfare.

While we're on the subject, I can't resist pointing out some uncomfortable facts about the later history of "disinterested expertise" in the twentieth century. Herbert Croly, the apostle of corporate liberalism, wrote The Promise of American Life as a manifesto of the messianic New Class. Croly was a key figure in organizing the National Civil Federation, a vehicle for enlightened capitalists to network with "moderate" government and labor leaders for the "common interest" of all. But most significantly, Croly founded The New Republic as an organ of "Progressive" opinion.

The New Class intellectuals at The New Republic, in cooperation with the similarly enlightened experts in the Wilson administration, in scientifically manipulating public opinion in order to manufacture consent for U.S. entry into the World War. The modern sciences of propaganda and "public relations" grew directly out of this effort by The New Republic and the Creel Commission to engineer public acquiescence to the policies of the ruling class.

Those who find themselves frustrated at the way the talking points of Karl Rove and Frank Luntz resonate throughout the corporate media, have the "disinterested experts" of the Progressive Era to thank. Those who, like Thomas Frank, object to the manufactured populism by which Main Street directs its resentment against phony "elites" like welfare moms and trial lawyers, should spare a kind thought for Herbert Croly, Walter Lippmann, Edward Bernays, and all those other enlightened folks with their "natural grasp of statistics" and their better appreciation for the interests of "us-two-decades-from-now."

The problem with power is that it tends to corrupt. The power to coerce us "for our own good" usually winds up being used to benefit one person at the expense of others. And the temptation to mistake one's own interest for the welfare of others is well-nigh impossible to resist. That's why we avoid giving one person power over another unless, as in the case of children and the insane, there is virtually no alternative.

Wednesday, January 26, 2005

Vulgar Libertarianism Watch, Part 5

Via (you guessed it) the Adam Smith Institute: Alan Greenspan to Give Adam Smith Lecture
Alan Greenspan, chairman of the US Federal Reserve, is to deliver the Adam Smith lecture at Kirkcaldy in Scotland, Smith's birthplace, on Sunday February 6th.

No further comment is necessary--except maybe that that thumping sound you hear is Adam Smith spinning in his grave.

More Wonderful "Free Market" Reforms From Those Corporate Pirates

Well, here's another example of the sort of "democracy, ...free economy, and trade" that Bush is promoting, according to Dr. Eamon Butler (via yesterday's Progressive Review).

From Uruknet:

The American Administrator of the Iraqi CPA (Coalition Provisional Authority) government, Paul Bremer, updated Iraq's intellectual property law to 'meet current internationally-recognized standards of protection.' The updated law makes saving seeds for next year's harvest, practiced by 97% of Iraqi farmers in 2002, and is the standard farming practice for thousands of years across human civilizations, to be now illegal. . . Instead, farmers will have to obtain a yearly license for genetically modified seeds from American corporations.). These GM seeds have typically been modified from seeds developed over thousands of generations by indigenous farmers like the Iraqis, and shared freely like agricultural 'open source.'"

From Grain:

When former Coalition Provisional Authority administrator L. Paul Bremer III left Baghdad after the so-called "transfer of sovereignty" in June 2004, he left behind the 100 orders he enacted as chief of the occupation authority in Iraq. Among them is Order 81 on "Patent, Industrial Design, Undisclosed Information, Integrated Circuits and Plant Variety." This order amends Iraq's original patent law of 1970 and unless and until it is revised or repealed by a new Iraqi government, it now has the status and force of a binding law. With important implications for farmers and the future of agriculture in Iraq, this order is yet another important component in the United States' attempts to radically transform Iraq's economy....

Multiply this specific example many times over, and that's the kind of systematic looting by crony capitalists that passed for "free market reform" under Bremer. Check out Naomi Klein's account of the CPA racket's attempts, administered by a gaggle of bright young things from the Heritage Foundation, to auction off state assets at fire-sale prices.

Unfortunately for Bremer and the Young Republican alumni in the Green Zone, such insider deals were illegal so long as Iraq was administered by Coalition forces. Getting a compliant Iraqi government in place to sign over the farm to Rummy's and Cheney's cronies was the hidden agenda behind the much-vaunted "transfer of sovereignty" last summer. As Klein put it, "International law prohibits occupiers from selling state assets themselves, but it doesn’t say anything about the puppet governments they appoint."

On June 30 the occupation would officially end—but not really. It would be replaced by an appointed government, chosen by Washington. This government would not be bound by the international laws preventing occupiers from selling off state assets, but it would be bound by an "interim constitution," a document that would protect Bremer’s investment and privatization laws.

The real ace up Bremer's sleeve was Article 26 of the Constitution, which stated that "[t]he laws, regulations, orders and directives issued by the Coalition Provisional Authority . . . shall remain in force" under the interim government, until the "sovereign" puppet regime was replaced by general elections.

Bremer had found his legal loophole: There would be a window—seven months—when the occupation was officially over but before general elections were scheduled to take place. Within this window, the Hague and Geneva Conventions’ bans on privatization would no longer apply, but Bremer’s own laws, thanks to Article 26, would stand. During these seven months, foreign investors could come to Iraq and sign forty-year contracts to buy up Iraqi assets. If a future elected Iraqi government decided to change the rules, investors could sue for compensation.

My biggest problem with Naomi Klein's account is her tendency to take the Rumsfeld-Bremer cabal's use of "laissez-faire" and "free markets" at face value. Here's what Freeman, Libertarian Critter had to say about it a while back:

The problem with lefties whose heart may be in the right place is that they believe the spokespeople of state corporatism who falsely claim to support free enterprise. This is one of the main reasons why notions of free trade and free markets are villanized by the left, or at least the generally non-authoritarian lefties who stand a chance at being converted to free market advocacy if only they could see the light on this issue. Hearing Republicans and corporate executives promote free markets rings about as hollow as similar promotions of spreading freedom and democracy in the middle east.

I recently had a brief online discussion with a leftie who is hostile towards what is often referred to as free trade. When I tried to explain the difference between what he calls free trade and genuine free trade, he responded by essentially implying that advocates of genuine free trade should come up with a new term for it since the masses equate free trade with the type of state corporatist crap that is now taking root in Iraq. He claimed that most people are too stupid and/or ill informed to make the distinction between free trade and what could be called imperialist trade, therefore the term is lost to those who advocate genuine free trade. It's such a shame that the perversion of language is so pervasive in despotic societies that are hostile to freedom.

The term "free market" should burn the tongues of corporate mercantilists like Bremer every time they utter them with their filthy mouths. Those of us who believe in genuine free markets--voluntary association and free exchange between producers, without the state's privileges enabling some to live at the expense of others--should reclaim the term free market for ourselves. Every time a left-wing critic of corporate rule parrots the neoliberal use of "free market" or "free trade" without ironic quotation marks, we should contest the legitimacy of the term. Every use of these terms that we allow to pass unchallenged serves to strengthen the ideological hegemony of the enemy class. We must take back our own language from our class enemies.

Tuesday, January 25, 2005

Vulgar Libertarianism Watch, Part 4 (Or Eamon Butler Phones It In)

In "The idyllic myth of peasant farming," Dr. Eamon Butler takes the destruction of Ethiopian crops by roaming goats as a paradigm for the problems of "primitive" peasant agriculture. See, the negligence of the goat-owners makes it impossible for their neighbors to raise food of their own. It's that simple: the only alternatives are either corporate rule by ADM and Cargill, or an ass-backward system in which those wooly-headed natives let their goats indiscriminately wreak havoc!

In the "Comments" thread, of course, Garrett Hardin's Tragedy of the Commons gets dragged out for another dusting off. This despite the fact that Hardin evidently knew nothing about actual, historic commons: commons were, in fact, heavily regulated to limit the number of livestock any family could graze, the amount of wood they could gather, etc. Hardin confused the commons, which were the joint private property of a village, with unowned land. The prisoner's dilemma Hardin described was, in fact, a pretty good account of what happens in the case of genuinely unowned land, in which there is no property system to internalize costs in those using it. A genuine commons, as they existed in historic Europe, would be a pretty good solution to the Ethiopian goat problem. The Anarchist FAQ has more on Hardin's ahistorical myth of the commons. I do have to wonder, by the way: does this vulgar libertarian aversion to joint private property extend to the modern corporation?

In the course of his post, Butler comes up with some incredible gems of vulgar libertarian boilerplate. For example:

The environazis disperse this myth about peasant farmers being at one with nature. Sometimes the myth is so idyllic that I think they want us all to become peasant farmers. Anyway, the idea is that while big, grasping corporations are ruining the planet, if we just thought smaller and more rustic we could turn things round.

So much straw, so little time! Dr. Butler neglects to mention that the phony "free market" nazis, in their turn, disperse their own myth about giant agribusiness corporations being a product of the free market, and replacing peasant farmers through their superior efficiency alone.

How much more preferable would have been the "free market" recipe of British East Africa--for example Kenya, in which the peasantry were evicted from the best 20% of arable land so that white colonists could use it for cash crop agriculture! This is the same tried and true recipe for "free markets" used by the English gentry in enclosing the commons so they could get more work out of the laboring classes; E. G. Wakefield adapted the recipe to settler societies, advocating that colonial administrations preempt ownership of vacant land so as to make self-employment more difficult and relieve the better sort's travails in finding good help at cheap wages. The hidden subtext in all this fake "free market" agitprop, of course, is the tacit understanding that robbery is only bad when it happens to rich people.

The time-honored "free market" recipe, among the ruling classes, goes like this: 1) rob the producing classes of their traditional property rights in the land, and turn them into tenants at-will of the plutocracy; 2) through coercive controls on the population, like the Combination Laws and Law of Settlement, make it impossible for the producing classes to bargain effectively in the wage market; 3) when the process is complete, talk a lot about how great the free market works, and justify the existing concentration of capital ownership as a result of the superior efficiency of those who came out on top.

That's pretty much what the neoliberals (e.g., Bush) mean when they talk about promoting "democracy (more on which in yesterday's post), free markets and free trade":

The environment is a luxury that the world's poorest can't afford to bother about. The only solution is to make the world's poor farmers rich. And - Bush is right - the only way to do that is to spread democracy, the free economy, and trade across the planet.

Yep--rigged spectator democracy, a mercantilist "free" economy, and heavily subsidized trade. Those poor farmers should see the cash start rolling in any day now.

UPDATE (hat tip to Ken Macleod)--It seems I was unfair to Garrett Hardin. According to Dan Sullivan,
In their search for excuses to deny any common right to land, royal libertarians are fond of citing Garrett Hardin's work, "Tragedy of the Commons." Or at least they cite the title, which is all most royal libertarians are familiar with. Hardin is himself an advocate of land value taxation, and has criticized misinterpretations of his work with the lament that "The title of my 1968 paper should have been `The Tragedy of the Unmanaged Commons.'"

Monday, January 24, 2005

New ATN Out

The latest issue of Any Time Now (of which I am now the US editor) is out. It starts off with an article by Eugene Plawiuk on the gay marriage issue. Pat Murtagh and Larry Gambone have a couple of interesting pieces based on their recent travels: Pat on the anarchist movement in Greece, and Larry on the CGT union in Spain. Larry also wrote a very kind review of Studies in Mutualist Political Economy, by yours truly. You can get an online subscription via the ATN yahoogroup (see the link above); if you prefer a hard copy and live in the US, email me your terrestrial address (if you live in Canada it'll be cheaper to order from the Canadian office).

I Guess the Mixed Economy Can't Be *All* Bad

Dr. Madsen Pirie notes (with evident approval) that "[m]any analysts have been taking a second look at nuclear power." Although he concedes that economists "wonder about the bottom line once the costs of decommissioning are factored in," this doesn't even begin to cover all the potential problems with the bottom line.

How about government subsidies to the mining, transportation, and processing of uranium, and disposal of nuclear waste? How about the fact that "peaceful" nuclear generating technology is almost entirely a spinoff of the military's nuclear programs, and that further technical advances depend largely on military spending? How about government assumption of liability above a certain amount for a nuclear accident, and legally mandated indemnity for liability above a still higher figure? In short, how about the fact that nuclear power, from beginning to end, is a creation of the state, and couldn't survive without sucking off the taxpayer teat?

As a Westinghouse representative admitted in 1953,

If you were to inquire whether Westinghouse might consider putting up its own money.., we would have to say "No." The cost of the plant would be a question mark until after we built it and, by that sole means, found out the answer. We would not be sure of successful plant operation until after we had done all the work and operated successfully.... This is still a situation of pyramiding uncertainties.... There is a distinction between risk-taking and recklessness. [Walter Adams and James Brock, The Bigness Complex (New York: Pantheon Books, 1986), pp. 278-279]

He also mentions (again, hardly bothering to conceal his approval) the fact that France has "gone 80% nuclear." I wonder: how many other French economic practices does Dr. Pirie hold up as a model for emulation?

Cost cannot be destroyed. It can only be shifted or concealed. If the total costs of nuclear power make it uncompetitive in a free market, sneaking the cost side of the ledger into the state budget doesn't make it any more cost-effective. In other words, There Ain't No Such Thing As A Free Lunch.

MaxSpeak on the March of Democracy

The way liberty works in Bushworld is that any nation designated as friendly (read pliable) is struggling towards democracy, no matter how barren and repressive its internal political culture.... Any such nation with an actual election, no matter how flaky, has achieved freedom. Any election that doesn't go our way (e.g., Washington state, Haiti, Venezuela) merits a do-over, or worse.

And, I might add, any country that introduced anything approaching genuine democracy (i.e., applying decentralism and direct democracy in either the political or economic realm) would likely be classed as a terror state and subjected to the same treatment as Venezuela and Haiti. The neoconservative version of "democracy," as commonly applied via People Power and assorted Velvet or Orange Revolutions, when The Walls Come Tumbling Down (TM), is essentially what Chomsky calls "spectator democracy."

When it comes to "democracy" and "rule of law," the neocons reveal their historical roots in the New Class/Crolyite politics of the "Progressive" era. "Democracy" means participating in a periodic legitimization ritual in which you select the professional elites that govern you, after which you sit down and shut up. The democracy, of course, should be as centralized, indirect, and all-around Hamiltonian as possible. Politics should be the domain of apolitical expertise, with conflict minimized and decisions based on the consensus of right-thinking people (i.e., the centrist establishment of men in suits who control big government and big business). Although the neocons love to emphasize decentralist values in their talk of "civil society," their version of civil society and citizen involvement applies only to the realms of private consumption and recreation; it implies nothing remotely touching on the spheres of self-government or economic production, that might undermine the control of the duly constituted managerial and plutocratic classes over the corporate state.

Iraqi democracy, like the kind just established in Afghanistan, means choosing the guy who will take orders from the IMF/World Bank and start implementing the privatization/austerity/"intellectual property" regime designed by Milton Friedman or Jeffrey Sachs.

Joseph Stromberg recently described a recurring neoliberal pattern of "privatization" that might be more accurately described as the systematic looting of public assets by politically connected corporate elites. Stromberg described the typical "privatization" procedure as "funny auctions, that amounted to new expropriations by domestic and foreign investors"; the likely result, he says, is "a massive alienation of resources into the hands of select foreign interests." More specifically, Naomi Klein recounted, in vomit-inducing detail, the kind of "democracy" the Iraqi Provisional Authority tried to foist on the Iraqi people.

(It's odd, by the way, that the people so intent on introducing "free market" principles to the state-owned Iraqi economy under Bremer were in remarkably little hurry about removing Saddam's draconian penalties for organizing independent labor unions.)

Finally, a word of caution: The necons prefer their version of "rule of law" (with its Weberian-flavored bureaucratic rationality) for the comparatively low maintenance costs and general mess entailed; but if democracy ever threatens to turn into the real thing they're always willing to expend political capital on a fascist terror state until "civil society" gets its mind right and a country can be safely restored to the proper form of non-threatening, apolitical democracy. Just bring in Pinochet's military, or give the Guatemalan death squads a few decades to liquidate labor organizers and peasant cooperative leaders by the tens of thousands, and the properly chastened people will be more than happy to relegate their "civil society" activities to organizing church socials and bowling leagues.

All in all, the ersatz neocon version of "democracy," like their version of "free markets," doesn't bear much looking into.

Wednesday, January 19, 2005

A Bank for Co-ops

Via Ecodema:

There are many ways to provide investment capital specifically to cooperatives and cooperation driven businesses. If we are to build a democratic economy, this kind of organization must become more and more important. It's not enough to talk about cooperation : we need the institutions that will bring in initial capital.

Such cooperative banking is severely limited, unfortunately, by laws which restrict banking co-ops to the same capitalist rules as the rest of the banking system.

The ideal would be a mutual bank as described by William Greene and Benjamin Tucker, which could issue interest-free credit against any form of collateral acceptable to the membership--perhaps based on the membership of a LETS system.

But the state's banking laws, like licensing and capitalisation requirements, uphold the money monopoly by creating entry barriers and enabling the issuers of credit to charge a monopoly price for it.


Via Seattle Times:

White House counselor Dan Bartlett announced on CNN's "Late Edition" that Bush had no intention of lobbying the Senate to revive an amendment banning same-sex marriages. Surprise, surprise, surprise!

Amendment backers defended it on the grounds that states might be forced, under the "full faith and credit" provision of Article IV of the Constitution, to recognize gay marriages or civil unions of other states. But according to Bartlett, most senators believe the Defense of Marriage Act (which exempts gay marriage from the interstate comity provision) "passes constitutional muster." Besides, it's not at all clear whether Article IV comity law applies to matters regulated under the state police power. Arguably, the fugitive slave clause was added to the Constitution because otherwise the traditional law of comity would not apply to practices like slavery that some states prohibited as morally repugnant.

In any case, Bush sees an attempt to revive the amendment as more trouble than it's worth.

Let's backtrack a bit. " Moral values" were a big wedge issue among Red State voters in November. The ostensible threat of gay marriage was cynically manipulated by Karl Rove to drive social conservatives to the polls. But in his first speech after the election, on how he was going to spend his "political capital," Bush mentioned only tort "reform" and Social Security "reform." Not a word about "family values." And now Bush announces that he's not going to do, after all, what he probably had no intention of doing in the first place.

So the social conservatives of the Red States, whom Karl Rove led around by the nose, voted against their economic interests on the assumption that Bush would actually do something about gay marriage. And now Bush is back at work doing his primary job of serving the interest of Blue State country club republicans, who don't give a rip about "moral values"--but if the truth be known are probably funnelling megabucks to Falwell, Robertson, Dobson, et al. Millions of people thought the urgent need for a bunch of blue-noses to make sure everybody kept his dick where it belonged, outweighed the progressive transformation of this country into a sweatshop owned by 1% of the population from inside their gated communities. And they didn't even get that.

Paging Thomas Frank....


FREE MARKET: That condition of society in which all economic transactions result from voluntary choice without coercion.

THE STATE: That institution which interferes with the Free Market through the direct exercise of coercion or the granting of privileges (backed by coercion).

TAX: That form of coercion or interference with the Free Market in which the State collects tribute (the tax), allowing it to hire armed forces to practice coercion in defense of privilege, and also to engage in such wars, adventures, experiments, "reforms", etc., as it pleases, not at its own cost, but at the cost of "its" subjects.

PRIVILEGE: From the Latin privi, private, and lege, law. An advantage granted by the State and protected by its powers of coercion. A law for private benefit.

USURY: That form of privilege or interference with the Free Market in which one State-supported group monopolizes the coinage and thereby takes tribute (interest), direct or indirect, on all or most economic transactions.

LANDLORDISM: That form of privilege or interference with the Free Market in which one State-supported group "owns" the land and thereby takes tribute (rent) from those who live, work, or produce on the land.

TARRIFF: That form of privilege or interference with the Free Market in which commodities produced outside the State are not allowed to compete equally with those produced inside the State.

CAPITALISM: That organization of society, incorporating elements of tax, usury, landlordism, and tariff, which thus denies the Free Market while pretending to exemplify it.

CONSERVATISM: That school of capitalist philosophy which claims allegiance to the Free Market while actually supporting usury, landlordism, tariff, and sometimes taxation.

LIBERALISM: That school of capitalist philosophy which attempts to correct the injustices of capitalism by adding new laws to the existing laws. Each time conservatives pass a law creating privilege, liberals pass another law modifying privilege, leading conservatives to pass a more subtle law recreating privilege, etc., until "everything not forbidden is compulsory" and "everything not compulsory is forbidden".

SOCIALISM: The attempted abolition of all privilege by restoring power entirely to the coercive agent behind privilege, the State, thereby converting capitalist oligarchy into Statist monopoly. Whitewashing a wall by painting it black.

ANARCHISM: That organization of society in which the Free Market operates freely, without taxes, usury, landlordism, tariffs, or other forms of coercion or privilege. "Right" anarchists predict that in the Free Market people would voluntarily choose to compete more often than to cooperate; "left" anarchists predict that in the Free Market people would voluntarily choose to cooperate more often than to compete.

Robert Shea and Robert Anton Wilson, The Illuminatus! Trilogy (New York: Dell, 1975) pp. 622-23

Tuesday, January 18, 2005

Ayn Rand on Objective Value

Via Catallarchy:

Ayn Rand on an "Objective Theory of Value:"

The intrinsic theory holds that the good resides in some sort of reality, independent of man’s consciousness; the subjective theory holds that the good resides in man’s consciousness independent of reality.

The objective theory holds that the good is neither an attribute of "things in themselves" nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value. (Rational, in this context, means: derived from the facts of reality in relation to man and validated by a process of reason.)

The objective theory holds that the good is an aspect of reality in relation to man -and that it must be discovered, not invented, by man. Fundamental to an objective theory of values is the question: "Of value to whom and for what? An objective theory does not permit context-dropping or "concept stealing"; it does not permit the separation of "value" from "purpose," of the good from the beneficiaries, and of man’s actions from reason.

If this means what I think it does, I wholeheartedly agree. The so-called "objective" value-theories of classical political economy did not claim that value inhered in goods as some sort of intrinsic or physical property that was a function of the labor entailed in production. Only that the valuations of the market followed trends that could be described by objective law.

Here's my response on the comment thread:

Most attacks on labor or cost theories of value that I’ve seen rely on a strawman caricature. If you look at the way Ricardo or Marx treated market competition, it’s clear that they saw subjective human valuations as the mechanism by which the law of value operated.

As the Austrians pointed out, IF you operate in an immediate time-frame, and assume existing stocks at the point of exchange, THEN exchange-value is determined by marginal utility to the buyer. But once you treat production as a dynamic factor that changes over time in response to demand, you wind up with the observable phenomenon that production will rise or fall until the price determined by marginal utility equals cost of production.

In other words, value is determined by marginal utility, as the Austrians said–given the basic assumptions of their paradigm. But the price of goods in elastic supply ALSO tends toward production cost–exactly as Ricardo said.

The claims that Bohm-Bawerk "demolished" the classical labor theory of value are based on a dumbed-down version of both Ricardo and B-B.

As Buchanan pointed out in Cost and Choice, Ricardo's theory had two paradigms, one for goods in elastic supply and one for goods in inelastic supply. Ricardo treated cost and scarcity as twin determinants of exchange-value (unfortunately treating scarcity-rents as an equal factor rather than a second-order deviation from the law of cost). The marginalists simply took the paradigm for inelastic supply and treated all goods as fixed in supply at the point of exchange. They made Ricardo's scarcity factor the sole determining factor. In other words, price is determined by utility--if you use language in a very specialized sense and start with some artificial assumptions. For more, see Chapter One of my Studies in Mutualist Political Economy.

Monday, January 17, 2005

New Mutualist Group at Yahoo

Brooks Nelson, a member of the Democratic Freedom Caucus email list (a Geolibertarian caucus of the Democratic party), has set up a group for mutualists at Yahoo. Anyone interested should check it out.

Friday, January 14, 2005

Intermediate-Scale Technology

Via Panchromatica.

Aid to tsunami victims, and who is giving how much, has been a big source of contention lately. But the kind of aid to be given is at least as important.

According to "Plunkett's Law," formulated by energy technologist Dr. Jerry Plunkett, governments have an "almost incurable habit" of choosing large-scale technologies over smaller-scale, decentralized ones; when there are two alternative solutions to a problem, equally viable technically, government will inevitably choose the one most amenable to centralized, bureaucratic control. [Kirkpatrick Sale, Human Scale (Coward, McCann & Geoghegan, 1980), p. 215]

The Intermediate Technology Development Group takes the opposite approach. The ITDG is providing relief on its own nickel, which is important. But even more important, it's providing reconstruction aid in the form of human-scale technology that local people can control for themselves. The ITDG, sounded by the late E.F. Schumacher, operates on the following philosophy:

ITDG has a unique approach to development – we don't start with technology, but with people. The tools may be simple or sophisticated – but to provide long-term, appropriate and practical answers, they must be firmly in the hands of local people: people who shape technology and control it for themselves.

Another worthy effort, based on a similar philosophy, is the Appropriate Technology Sourcebook. The Sourcebook is an index to thousands upon thousands of books and technical articles on the kinds of appropriate technology that can be integrated into the life of a small town or rural village. For a few hundred dollars, the Sourcebook comes with a fiche or CD-Rom library of those articles and books--dollar for dollar, probably the best form of development aid imaginable. The literature provided includes countless simple and user-friendly technologies that can significantly increase the productivity of labor and improve the average person's quality of life, while promoting rather than hindering local self-reliance.

By the way, if you're a fan of Schumacher and of attempts like these to implement his philosophy, you could do a lot worse than to pick up a copy of Karl Hess' Community Technology (Harper & Row, 1979). In it, Hess describes his involvement in human-scale technology experiments with the Adams-Morgan Organization, a largely black working-class community organization in Washington, DC. Among other nifty things, they successfully designed: basement trout farms, with jury-rigged pumps and filters, that produced protein cheaper per pound than anything available at the supermarket; a working passive solar heating system made from empty cans; and lots more--read it yourself!

Vulgar Libertarianism Watch, Part 3

Alex Singleton at the ASI gives a glowing review of Philippe Legrain's Open World: The Truth about Globalization.

Legrain may provide an actual definition of "globalization" (I don't know--I haven't read the book). But Singleton does not--it simply goes without saying that we know what he means by the term. And we probably do: the kind of corporate mercantilism that neoliberals call "free trade," but which has about as much to do with the real free trade of Cobden as Insoc did with the English Socialism of Rutherford, Aaronson and Jones.

You see, "globalization" can refer to any increase in the total volume of a country's trade with the rest of the world. That doesn't mean much. When U.S. government subsidies to the export of capital make overseas production artificially competitive against production at home, the increased imports count as "globalization." But they're a net reduction in efficiency, brought about by state intervention on behalf of the government's corporate clients.

And that's the trouble with most of the trade that falls under the heading of "globalization" these days. Such global economic activity may be "trade," but it isn't free trade. It wouldn't pay for itself in a free market.

The central function of the World Bank and of Western foreign aid is to subsidize the export of capital by funding the transportation and utility infrastructure overseas, without which investments in production facilities would not be profitable. It renders offshore production artificially profitable, so that we buy stuff from China that we'd make for ourselves close to home in a free market.

In addition, "intellectual property" laws, impermissible in a free market, lock Western corporations into control of the latest production technology.

And subsidies to long-distance transportation artificially reduce the cost of shipping the stuff back home to us.

Let's not even get into the role of U.S. intervention and the threat of U.S. intervention in guaranteeing the political security of capital investments overseas. The last I heard, a free market means market actors fully internalize all the costs and risks of their activity, and pay for all the services needed (included security) to make their investments profitable.

According to Singleton, Legrain points to the greater rate of increase in national income for "globalizing" than for non-"globalizing" countries, as evidence of the salutary effects of "globalization."

But any number of things, good or bad, can cause an increase in national income. The monetization of the subsistence and barter economy, caused by expropriating the producing classes and coercing them into the labor market, can show up as an exponential increase in "national income." If somebody figures out how to suck air out of the atmosphere, bottle it up, and sell it back to workers as an alternative to suffocation, that'll probably kick the "national income" up a few notches. Not everything that increases "national income" is good (these people have heard of the broken window fallacy, right?).

In addition, if the income of the top few percent of the population increases drastically, but that of the majority stagnates, it may show up as a substantial increase in average real income. That's essentially what has happened in the U.S. over the past thirty years, where wage income has been nearly flat while the income and wealth of the plutocracy has increased several times over. Virtually all increases in productivity have gone to those at the top.

For the welfare of the average person, what kind of "globalization" takes place matters a lot more than how much.

Wednesday, January 12, 2005

Vulgar Libertarianism Watch, Part 2

(Via Our Word is Our Weapon) More neoliberal paint-by-numbers from the Adam Smith Institute.

Dr. Madsen Pirie, in surveying the "Scorecard of Ideas," attempts to debunk critics of corporate globalization (which we know, of course, is equivalent to "free trade" in ASI-speak). Our Word has already given his efforts a good fisking in the post linked above, but I'd like to comment on a couple of items myself.

One anti-globalist assertion supposedly debunked by Dr. Pirie is that "The rich world is getting richer, the poor poorer." To disprove this claim, he refers to national income statistics. Unfortunately, such statistics are profoundly misleading. The monetization of activities formerly carried out in a traditional subsistence and barter economy results in skyrocketing nominal GDPs, even though such monetization usually results from the expropriation of formerly self-employed peasants and the use of the poll tax to coerce them into the wage labor market (as in British East Africa). For that matter, when the English rural labor force was dispossessed by the enclosure of commons and the abrogation of copyhold rights to the land, the "national income" no doubt went up considerably.

But best of all, in response to the claim that "Multinationals exploit people in poor countries," Dr. Pirie dusts off the "best available alternative" chestnut debunked in our post yesterday.

One person’s exploitation is another’s opportunity. Multinationals pay lower wages in developing countries than in rich ones: that’s why they go there. But their pay and conditions are reportedly better than those available elsewhere in poor countries, and so represent economic advancement. There are usually waiting lists to work for them.

But golly, the transnationals sure do seem to gravitate toward banana republics where the death squads torture and "disappear" labor organizers and peasant co-op leaders, or toward "workers' paradises" like China, where attempting to organize an independent union can get you a stint in a mental hospital. Wonder why that is? And the foreign policy of the U.S. government sure does seem to devote an awful lot of effort to making sure such anti-labor regimes stay in power. For example, the Suharto regime (which was put in power by a U.S.-sponsored coup, followed by the mass-murder of several hundred thousand leftists) treated independent labor organizing as a serious criminal offense. Even today, in the neoliberal Indonesian "democracy"(TM), they're barely legal. And Indonesia is a favorite haven for sweatshops. Again, wonder why that is?

A man who hands over his wallet to a mugger does so because he prefers it to the "next-best alternative." So what? As Benjamin Tucker pointed out over a century ago, the capitalists systematically manipulate the state to create a buyers' market for wages and limit the conditions under which workers can sell their labor, and then blithely answer all criticisms with the response that the workers "voluntarily agreed" to work on those terms.

Now, to solemnly tell these men who are thus prevented by law from getting the wages which their labor would command in a free market that they have a right to reject any price that may be offered for their labor is undoubtedly to speak a formal truth, but it is also to utter a commonplace and a cruel impertinence. "The Lesson of Homestead," Instead of a Book.

Note--I don't know how long the trackback to the ASI post will hold up, since they're notorious for sabotaging links from sites that disagree with them and deleting critical comments from their blog (as Ian Bertram of Pancromatica has found). Thin-skinned buggers, eh?

Orcinus on the Rural Strategy

Orcinus elaborates further on his proposed rural strategy.

There are similar issues that can be used to dispel the conservative stranglehold on rural political life: the demise of the family farm; corporate timber giants' job-reducing measures and resource mismanagement; the gutting of the rural infrastructure; destruction of hunting and fishing habitat. And that's just for starters. For nearly every rural locale, there is a menu of opportunities.

It is important to remember that this has to be done by candidates who can demonstrate they share rural dwellers' real values: hard work, honesty, decency, forthrightness, integrity. They also have to be genuine; a few years ago, Idaho Democrats ran as their candidate for the U.S. Senate a man from the East Coast who claimed residence in Sun Valley. Nice fellow, and an avid fly fisherman, but he wasn't from Idaho and gave little sign he had any more than a peripheral connection to the people who live there. He got creamed, of course; but even worse, he underscored the perception in the state of Democrats as the party of urban elites.

Red Staters are a wide-open field for propaganda, if we were smart about it. They were just as socially conservative, just as prone to Bible-thumping and Jesus-shouting a hundred years ago--but then they were backing the People's Party, the Socialist Party, the Non-Partisan League, the Farmer-Labor Party, the cooperative movement, etc., etc. And they still have a populist element in their core values that could be directed against corporate America. The problem is that right now Rove & Co. are skilfully manipulating their populist values and symbols and directing their resentments against fake "elites" like trial lawyers.

These people, I repeat, are a field white unto harvest for genuine anti-corporate and anti-government populism. They need to be shown how illegitimate the present economic system of crony capitalism and corporate welfare is ACCORDING TO THEIR OWN VALUE SYSTEM. They need to be shown, in vivid detail, how Bush and Rove appeal to their "aw, shucks" Middle American values of rugged individualism, while in practice enriching billionaires at taxpayer expense. They need to be shown the extent to which the billionaires get their money by socializing the costs and risks of doing business, and sucking off the government tit.
In other words, we need to demonize the phony populists of the GOP in terms of their own rhetoric.

The Democratic Freedom blog (an organ of the more-or-less Geolibertarian Democratic Freedom Caucus) often has good ideas for people oriented toward such a strategy. Another good starting place for such an approach is the work of Bill Kauffman (for example, check out this; and this).


From Roderick Long:

While there are, admittedly, plenty of authoritarian types on the left (as everywhere else), there are also plenty of people whose instincts are firmly anti-authoritarian but who have been lured into supporting state socialism because it’s been sold to them as the only effective counterweight to state capitalism. These leftists are our potential allies, but no alliance will be forthcoming so long as we continue to confirm most leftists’ impression of libertarianism as a variant of conservatism....

This time around, we are much better positioned to make a success of the
left/libertarian coalition that Murray Rothbard, Karl Hess, Leonard Liggio, and others sought to build four decades ago. Let’s get to work!

Bhagwati Still at Large

From the Adam Smith Institute. Jagdish Bhagwati has just published Free Trade Today, a series of lectures at the London School of Economics collected in book form. Bhagwati is a leading practitioner of the kind of neoliberal corporate apologetics with which "free trade" has become identified in the public mind. According to the ASI, Bhagwati believes that, although bilateral trade agreements are better than nothing, multilateral agreements like the Uruguay Round of GATT are better still.

Surprise, surprise, surprise!

This passage from Joseph Stromberg comes to mind:

For many in the US political and foreign policy Establishment, the formula for having free trade would go something like this: 1) Find yourself a global superpower; 2) have this superpower knock together the heads of all opponents and skeptics until everyone is playing by the same rules; 3) refer to this new imperial order as "free trade;" 4) talk quite a bit about "democracy." This is the end of the story except for such possible corollaries as 1) never allow rival claimants to arise which might aspire to co-manage the system of "free trade"; 2) the global superpower rightfully in charge of world order must also control the world monetary system....

The formula outlined above was decidedly not the 18th and 19th-century liberal view of free trade. Free traders like Richard Cobden, John Bright, Frederic Bastiat, and Condy Raguet believed that free trade is the absence of barriers to goods crossing borders, most particularly the absence of special taxes--tariffs--which made imported goods artificially dear, often for the benefit of special interests wrapped in the flag under slogans of economic nationalism....

Classical free traders never thought it necessary to draw up thousands of pages of detailed regulations to implement free trade. They saw no need to fine-tune a sort of Gleichschaltung (co-ordination) of different nations labor laws, environmental regulations, and the host of other such issues dealt with by NAFTA, GATT, and so on. Clearly, there is a difference between free trade, considered as the repeal, by treaty or even unilaterally, of existing barriers to trade, and modern "free trade" which seems to require truckloads of regulations pondered over by legions of bureaucrats.

This sea-change in the accepted meaning of free trade neatly parallels other characteristically 20th-century re-definitions of concepts like "war," "peace," "freedom," and "democracy," to name just a few. In the case of free trade I think we can deduce that when, from 1932 on, the Democratic Party-- with its traditional rhetoric about free trade in the older sense--took over the Republicans project of neo-mercantilism and economic empire, it was natural for them to carry it forward under the "free trade" slogan. They were not wedded to tariffs, which, in their view, got in the way of implementing Open Door Empire. Like an 18th-century Spanish Bourbon government, they stood for freer trade within an existing or projected mercantilist system. They would have agreed, as well, with Lord Palmerston, who said in 1841, "It is the business of Government to open and secure the roads of the merchant." ....

Here, John A. Hobson... was directly in the line of real free-trade thought. Hobson wrote that businessmen ought to take their own risks in investing overseas. They had no right to call on their home governments to "open and secure" their markets.

Tuesday, January 11, 2005

Vulgar Libertarianism Watch, Part 1

Since I first considered doing a blog, I've envisioned a recurring feature called "Vulgar Libertarianism Watch," or some such. At one point, I toyed with the idea of making that the name of the blog, and devoting most of my effort to reporting on the kind of faux "free market" analysis that consists of an apologetic for big business. But although there would be more than enough such material to keep me blogging indefinitely, I decided such an exclusive focus would be too much of a one-trick pony.

So I've decided to go with the original impulse, and regularly feature "Vulgar Libertarianism Watch" without making it the main focus of the blog. And what better way to kick things off than with the first installment of this feature?

First, a note on what vulgar libertarianism is. The term, coined as far as I know by yours truly, alludes both to the "vulgar Marxism" of twentieth century Marxoids, and to what Marx called the "vulgar political economy" of the generation after Ricardo and Mill. The defining feature of vulgar political economy, as Marx described it, was that it had ceased to be an attempt at the scientific explication of the laws of economics, and had become a hired prize-fighter on behalf of plutocratic interests. Classical political economy was a revolutionary creed that threatened the interests of the landed oligarchy and the mercantilists. And it was amenable to even more revolutionary uses, as evidenced by the Ricardian socialists. The most famous socialist treatment of Ricardo, of course, is that of Marx. But the socialist development of classical political economy also included free marketers like Thomas Hodgskin (the most preeminent of Ricardian socialists), the mutualist and individualist anarchists from Warren to Tucker and Spooner, and many Georgists. My own work falls within this latter array of petty bourgeois deviationationists. But with the triumph of the industrial owning classes in 1830s Britain, the focus of political economy shifted from scientific investigation and a radical challenge to the power of the Old Regime, to an apology for the status quo.

I described vulgar libertarianism as an ideology in the opening section of Chapter Four of my Studies in Mutualist Political Economy. Since that passage is as coherent a description as I am likely to write, rather than reinvent the wheel I'll just take the lazy man's way out and paste in the relevant paragraphs:

This school of libertarianism has inscribed on its banner the reactionary watchword: "Them pore ole bosses need all the help they can get." For every imaginable policy issue, the good guys and bad guys can be predicted with ease, by simply inverting the slogan of Animal Farm: "Two legs good, four legs baaaad." In every case, the good guys, the sacrificial victims of the Progressive State, are the rich and powerful. The bad guys are the consumer and the worker, acting to enrich themselves from the public treasury. As one of the most egregious examples of this tendency, consider Ayn Rand's characterization of big business as an "oppressed minority," and of the Military-Industrial Complex as a "myth or worse."

The ideal "free market" society of such people, it seems, is simply actually existing capitalism, minus the regulatory and welfare state: a hyper-thyroidal version of nineteenth century robber baron capitalism, perhaps; or better yet, a society "reformed" by the likes of Pinochet, the Dionysius to whom Milton Friedman and the Chicago Boys played Aristotle.

Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate article arguing that the rich can’t get rich at the expense of the poor, because "that’s not how the free market works"--implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of "free market principles."

So, without further ado, we proceed to dissect the first specimen of libertarianus vulgaris. It would have been too much of a coincidence for me to stumble across such an egregious example by chance at the same time I was planning to kick off my blog. In fact, what happened was just the opposite: I stumbled across this article and decided that it was too good a target to pass up. If I can't get into gear and start blogging when something this good falls into my lap, I might as well just give up.

In "That Taco Bell Brouhaha," Art Carden addresses the boycott (by the Wobblies, various student anti-sweatshop coalitions, and others) of Taco Bell on behalf of the Immolakee Indians who pick its tomatoes. In response to charges that Taco Bell's wages are exploitative, Carden responds:

This is precisely wrong. Taco Bell's wage policy alleviates the "continued misery of farmworkers and their families" rather than contributing to it. Wages are not foisted upon workers; they agree to pick tomatoes for "sub-poverty wages" for a reason. In a market economy, they do so because the 'sub-poverty wages" paid by Taco Bell suppliers are a better deal than anyone else is offering. It's the same reason people line up for "sweatshop" jobs in developing countries. Far from contributing to "continued misery," Taco Bell is making workers' lives a little bit better by offering something better than their next-best option.

Before we rush to condemn free markets and market forces, we have to ask where the workers are coming from. In many cases, Taco Bell suppliers employ migrant workers who are making their own "run for the border." Migrant workers in Immokalee come from places like Haiti, Mexico, and Central America—areas where markets have been crippled by state intervention for generations. The end result is a veritable army of workers who have not been allowed to build a skill set through free market employment and who are now suited to do nothing better than pick tomatoes for pennies. Far from being the enemies of labor, American markets are offering migrant workers an opportunity to substantially improve their standards of living and the prospects of their children.

There are so many features of vulgar libertarianism here, it's hard to decide where to begin. The defense of the behavior of big business under "actually existing capitalism" in terms of "how the free market works" is, as I already pointed out in the passage above from Mutualist Political Economy, an immediate tipoff that we've encountered a vulgar libertarian.

It's quite jarring, though, to encounter such writing at the website of an institution so closely associated with the memory of Murray Rothbard. A central theme of Rothbard's work, and that of left-Rothbardians like Joseph Stromberg, has been the essentially statist (and exploitative) nature of corporate capitalism in its existing form. As Rothbard put it in "The Student Revolution" (The Libertarian, May 1, 1969), "our corporate state uses the coercive taxing power either to accumulate corporate capital or to lower corporate costs." So to pass from reading an excellent piece of free market analysis like this or this, to reading an apology for the status quo like the piece under consideration here, is positively obscene.

Especially typical of the vulgar libertarian style is the argument that Taco Bell offers a "better deal" than the "next-best option." This argument can be found, phrased in slightly different words, in pseudo-"free market" boilerplate in just about any issue of The Freeman: Ideas on Liberty or any daily installment of the Adam Smith Institute blog. Here are several almost identical examples culled from The Freeman:

But are the “low-wage, non-union” Ecuadorian laborers better off working now for some foreign corporation? Apparently they think so, or else they would have stayed with what they were doing previously. (Would you leave your job for one with less pay and worse conditions?) [Barry Loberfeld. "A Race to the Bottom" (July 2001)]

People line up in China and Indonesia and Malaysia when American multinationals open a factory. And that is because even though the wages are low by American standards, the jobs created by those American firms are often some of the best jobs in those economies. [Russell Roberts. "The Pursuit of Happiness: Does Trade Exploit the Poorest of the Poor?" (September 2001)]

What the Industrial Revolution made possible, then, was for these people, who had nothing else to offer to the market, to be able to sell their labor to capitalists in exchange for wages. That is why they were able to survive at all.... As Mises argues, the very fact that people took factory jobs in the first place indicates that these jobs, however distasteful to us, represented the best opportunity they had. [Thomas E. Woods, Jr. "A Myth Shattered: Mises, Hayek, and the Industrial Revolution" (November 2001)]

In nineteenth-century America, anti-sweatshop activism was focused on domestic manufacturing facilities that employed poor immigrant men, women, and children. Although conditions were horrendous, they provided a means for many of the country's least-skilled people to earn livings. Typically, those who worked there did so because it was their best opportunity, given the choices available....

It is true that the wages earned by workers in developing nations are outrageously low compared to American wages, and their working conditions go counter to sensibilities in the rich, industrialized West. However, I have seen how the foreign-based opportunities are normally better than the local alternatives in case after case, from Central America to Southeast Asia. [Stephan Spath, "The Virtues of Sweatshops" (March 2002)]

More recently, the argument was reincarnated by Radley Balko, who referred to Third World sweatshops as "the best of a series of bad employment options available" to laborers there. Within a couple of days, this piece was recirculated over the "free market" [sic] blogosphere, along with numerous comments that "sweatshops are far superior to third-world workers' next best options...," or to similar effect (the last phrase comes from another article by Carden posted on the Mises blog last May, by the way). For more examples of the same argument, just Google "sweatshops"+"next-best alternative".

But the grand-daddy of this argument was Ludwig von Mises, writing in Human Action:

The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. [Regnery Third Revised Edition, 619-20]
See, laborers just happen to be stuck with this crappy set of options--the employing classes have absolutely nothing to do with it. And the owning classes just happen to have all these means of production on their hands, and the laboring classes just happen to be propertyless proletarians who are forced to sell their labor on the owners' terms. The possibility that the employing classes might be directly implicated in state policies that reduced the available options of laborers is too ludicrous even to consider.

In the world the rest of us non-vulgar libertoids inhabit, of course, things are a little less rosy. There was a great deal of continuity between the Whig landed aristocracy that carried out the enclosures and other abrogations of traditional rights to the land, and the employing classes of early industrial Britain. The early industrialists of Manchester, far from being (as Mises portrayed them) an upstart class who accumulated capital through their own parsimony, were junior partners of the landed oligarchy; the latter were a major source of investment capital. And the factory owners benefited, in addition, from near-totalitarian social controls on the movement and free association of labor; this legal regime included the Combination Acts, the Riot Act, and the law of Settlements (the latter amounting to an internal passport system).

In addition, the general legal framework (as Benjamin Tucker described it) restricted labor's access to its own capital through such forms of self-organization as mutual banks. As a result of this "money monopoly," workers were forced to sell their labor in a buyer's market on terms set by the owning classes, and thus pay tribute (in the form of a wage less than their labor-product) for access to the means of production.

Lysander Spooner, a hero to many anarcho-capitalists, in Natural Law described the process in somewhat less than capitalistic language:

In process of time, the robber, or slaveholding, class---who had seized all the lands, and held all the means of creating wealth---began to discover that the easiest mode of managing their slaves, and making them profitable, was not for each slaveholder to hold his specified number of slaves, as he had done before, and as he would hold so many cattle, but to give them so much liberty as would throw upon themselves (the slaves) the responsibility of their own subsistence, and yet compel them to sell their labor to the land-holding class---their former owners---for just what the latter might choose to give them. Of course, these liberated slaves, as some have erroneously called them, having no lands, or other property, and no means of obtaining an independent subsistence, had no alternative---to save themselves from starvation---but to sell their labor to the landholders, in exchange only for the coarsest necessaries of life; not always for so much even as that.

These liberated slaves, as they were called, were now scarcely less slaves than they were before. Their means of subsistence were perhaps even more precarious than when each had his own owner, who had an interest to preserve his life. They were liable, at the caprice or interest of the landholders, to be thrown out of home, employment, and the opportunity of even earning a subsistence by their labor. They were, therefore, in large numbers, driven to the necessity of begging, stealing, or starving; and became, of course, dangerous to the property and quiet of their late masters.

The consequence was, that these late owners found it necessary, for their own safety and the safety of their property, to organize themselves more perfectly as a government and make laws for keeping these dangerous people in subjection; that is, laws fixing the prices at which they should be compelled to labor, and also prescribing fearful punishments, even death itself, for such thefts and tresspasses as they were driven to commit, as their only means of saving themselves from starvation.