Enemies of What State?
Posted by Kevin Carson on Mar 19, 2009 in Commentary • 22 commentsThere are all too many people in American politics whose real concern, concealed behind all the “free market” rhetoric, is not so much “statism” per se as statism that benefits the wrong class of people. A good example: it was quite amusing to hear some Republicans, during yesterday’s Congressional hearings on the AIG bonuses, wringing their hands over the prospect of “interfering with the management of private business” and “altering the terms of contracts.” Last night Rachel Maddow ran clips of some of the very same people, last December, crowing about how they were forcing the UAW to renegotiate it’s contract and accept lower wages in return for bailout loans to the auto industry.
Another example: I don’t advocate Social Credit or greenbackism, but I don’t understand the reasoning of those who object to either as an increase in statism over the present system.
By way of background, Social Credit is a proposal to remedy corporate capitalism’s chronic tendency toward overinvestment and overproduction by periodically depositing a sum of interest-free new money, equivalent in aggregate to the demand shortfall, in the citizenry’s bank accounts. Greenbackism is a proposal that countercyclical deficit spending, rather than being financed by interest-bearing debt in the form of government bonds, should simply take the form of directly spending money into existence by the Treasury.
It seems to me the sticking point, if there is one, should be at the idea of government as regulator of the money supply by creating fiat money, or of deficit spending to meet demand shortfalls, in the first place. But these things are overwhelmingly accepted in principle by the mainstream public. So the sticking point about Social Credit and greenbackism can only be the sacred principle that the fiat money must be specifically lent into existence at interest, and that deficit spending must be financed by government bonds.
The problem is not the function itself, but only carrying it out in a way that doesn’t enable a class of coupon-clippers to skim the cream off the top.
It also seems to me, on the other hand, that if these basic functions are accepted in principle, it makes it more statist–not less–to compound the injury by doing it through private accomplices, and empowering them to charge interest for the function, rather than simply doing so directly.
It’s just another instance of a broader phenomenon, what the Libertarian Alliance’s Sean Gabb calls “economic fascism.” Economic fascism is his term for the phony regime of “privatization” advocated by such organizations as the Adam Smith Institute. It doesn’t get government out of the business of performing particular functions. It just delegates the function to nominally “private” corporations that perform the function with public money, with government protection from free market competition, and with a guaranteed profit for performing the function (on the regulated utility’s “cost-plus” model).
Under this vulgar libertarian model of “free market reform,” the only thing that matters is the comparative percentages of functions which are carried out by nominally “private” and nominally “public” organizations–not the substance of things. But it seems to me that if a corporation receives its revenue from the government, is protected from competition by the government, and is guaranteed a profit by the government, it IS the government. The only significance of the entity’s profit is to increase the overall cost of performing the function, and thus increase the total injury to the taxpayer.
And while we’re at it, let’s be honest about something. Given the existence of a corporate economy on the present model, countercyclical government spending is absolutely essential to prevent its collapse. Those who advocate a return to the Reaganism and Thatcherism of the ’80s, or the cowboy capitalism of the ’90s, absent high government spending, are either delusional or disingenuous. Reagan was the biggest Keynesian of them all.
There are only two alternatives: to eliminate the existing–statist– structural causes of overinvestment and underconsumption, or to continue adding new layers of statism to counter the chronic crisis tendencies. Either more and more statism, or forward to anarchy.
The American corporate economy has been statist to its core since its beginnings in the late 19th century. There wouldn’t even be a national market at all, or national corporations serving it, had it not been for the land grant railroads and other subsidies to long-distance shipping that made possible artificially large firms and market areas. There wouldn’t be stable oligopoly markets had it not been for the cartelizing effect of patents, or the stabilizing effects of the Clayton and FTC Acts’ restrictions on price warfare.
To repeat, the system was statist from its beginnings. There are all too many on the Right who like to refer to a mythical “free market” system that prevailed before 1932, and to pretend that the “statism” only began when government started intervening on behalf of workers and consumers. But in fact, all the “progressive” interventions of government under the New Deal were secondary, aimed at ameliorating the side-effects of the prior interventions that created corporate capitalism in the first place. Had it not been for the secondary, ameliorative interventions, corporate capitalism as we know it would have collapsed in the 1930s.
Returning to my earlier point: if we are to have statism at all, and we are reduced to quibbling between Democrats and Republicans over what kind of statism it is to be, I make no secret of the fact that I prefer the kind of statism that weighs less heavily on my own neck.
If phony “free market” Republicans accept NLRB certification of unions in principle, and only want to quibble over the Employee Free Choice Act because it makes it easier to certify unions without harassment, intimidation and punitive firing of organizers–well, why would I, a worker, prefer a system of certification that suits the bosses’ interest?
If we’re going to talk about a genuine free market labor regime, then let’s eliminate the Wagner Act–and with it Taft-Hartley’s prohibitions on sympathy and boycott strikes, and its mandatory arbitration and cooling off periods. Let’s eliminate the Railroad Labor Relation Act’s provisions that prevent transport workers turning local and regional disputes into general strikes. In short, let’s eliminate all the legal prohbitions on the tactics that unions were using to win before Wagner was ever passed.
But if we’re going to have government certification of unions, let’s have a form of certification that fulfills its stated purpose–determining the intention of workers–as accurately and automatically as possible.
Likewise, if we’re going to have a welfare state, let’s eliminate the costly and intrusive welfare bureaucracies and spend the same amount of money on a guaranteed income. If we’re going to have a regulatory state, let’s eliminate all the agencies and replace their functions with pigovian taxation of negative externalities.
My goal is the abolition of the state. I would welcome all these things tomorrow, if I thought they were genuine steps toward the abolition of the state altogether the day after tomorrow. They certainly wouldn’t be net increases in statism.
C4SS (c4ss.org) Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: A Libertarian Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.
Top article, good work.
Great article! Capitalists have always been adept at using free-market rhetoric to justify intervention on behalf of their class interests, just as politicians use the language of liberty to make justifications for slavery.
I would quibble with the statement that "There wouldn’t even be a national market at all" if not for statist interventions. I agree that the current form of the national market is the the result of statism, and I think that a freed market would see more decentralization. However, I don't see why some kind of national market could not have developed in the absence of statism. For example, a free market that led to accessible flight and communications technologies could lead to the lowering of transportation costs. What I do suggest is that widespread demand for strong, sustainable communities is essential, and this demand has been historically undermined by government intervention through schools, police, social engineering, and the subsidizing of large firms.
However, I do need to read more on the subject, so take what you will from my feedback.
Kevin,
Nice perspective. What is your opinion of the Post Keynesians and the commentary coming out of their camp about the current economic situation, e.g. by Steve Keen? Do you think that free societies are incompatible with economic theories that imply that markets have potentially undesirable emergent features? In other words, is there any reason, in your opinion, to think that people won’t voluntarily decide to participate in smaller scale monetary intervention and regulation of their economy? It seems that a great deal of thought is given to legal institutions that may develop but not economic ones. What’s a market anarchist who isn’t an Austrian, a Marxian or a neoclassical economist to do? Most of the discussion is seemingly all or nothing between marketeers and communists when it comes to money and markets. Why is there so little discussion of mixed-economy anarchism? Is it simply incoherent?
darianworden: Perhaps I should say there would be, as John Medaille put it, a much smaller and lower capacity national market overlaid on a primarily local industrial economy. Given the sheer scale of the capital outlays required for building railroads (see Josephson’s account in The Robber Barons of the hand-to-mouth operations of those building the transcontinental railroad even while they were in the process of receiving land grants and public funds), it’s safe to say the national system of trunk lines would have been an order of magnitude or more smaller absent the capital the government provided up front in the form of land grants. Much more likely would have been Mumford’s system of primary local and regional rail networks, loosely patched together from the bottom up on an ad hoc basis. Getting cross-country by rail would eventually have been possible, but it would have been much more like getting a long distance call patched through before direct dialing. And it’s quite likely that, absent the state-created jumbo jet industry (which simply wouldn’t have come into existence in a free market), we’d have a considerably lower capacity system of airships hauling passengers and cargo nationwide.
Neverfox: The Keen article is interesting. In addressing the question of whether expansion of money precedes creation of debt, and whether the money supply is greater than the debt load, he seems to gloss over the central fact that the very method by which the money supply is created involves the simultaneous creation of debt.
I don’t think it’s so much that markets entail undesirable emergent features, as that there’s no such thing as a generic market. A market presupposes some particular set of property rules to define who owns what, and local conventions for affixing responsibility, defining what qualifies as an actionable tort or fraud, etc. It’s quite conceivable that a genuine free market community might adopt a far different set of operating rules than most vanilla flavored market anarchy scenarios depict.
What exactly do you mean by “smaller scale monetary intervention and regulation of the economy” on a voluntary basis? Are you talking about some kind of voluntary agro-industrial commune as the basic building block of society, or something like that?
Stephen Kinsella has some input here:
http://blog.mises.org/archives/009652.asp
re: "Perhaps I should say there would be, as John Medaille put it, a much smaller and lower capacity national market overlaid on a primarily local industrial economy."
FWIW, that would be closer to my own personal view than what was originally said, although I wouldn't terribly mind being shown wrong on that point either. I'm not as concerned about what structures emerge as the character of them, to include equity in their distribution of costs. It's not highways that I object to. It's highways funded on a cost model of violent transfer of wealth that serves to unjustly benefit one class at the expense of another class.
If countercyclical financing was essential to prevent collapse, then one must assume that economic crises previous to the practice of countercyclical financing resulted in collapse, or, at the very least, were longer and with more drastic consequences than those crises with the countercyclical policies.
This is not the case in the historical data. Market crashes previous to countercyclical techniques were shorter with less loss of capital and less loss of employment. This fact is plain in the facts, yet is discussed in not a single mainstream economics book. It appears the academics have thrown it down the same scholastic memory whole as big union Jim Crow…
I'm getting very annoyed by Kinsella recently – his behavior has become increasingly over-the-top. He seems to more or less be on an anti-LL witch-hunt in which he nitpicks certain statements and makes grandios generalizations, without seeming to make any sincere attempt to actually understand the ideas and the people that he is dealing with. In the comments section of the linked Mises Institute blog, he stated that "anyone who thinks 'limited liability' grants by the state are responsible for the success of capitalism is an idiot." And he made uncalled for jabs such as "no offense, emotion-ridden leftoids".
Honestly, it doesn't seem like it's possible to have a particularly rational discussion and debate about this with Kinsella at this point. Left-libertarians are essentially painted with the red brush before they can articulate what their position actually is. Or, in accordance with this blogpost from Kinsella, left-libertarians apparently can be generalized as a bunch of primitivists and agrarians. His tone is very reactionary and it seems like he is just fanning the flames in the attempt to rally the Mises Institute against the libertarian left. What I find most disingenous, however, is the claim that left-libertarians are arbitrarily inserting preferances into the mix while the libertarian right aren't doing so and are neutral at "the plumb-line". That is simply misleading. Certain preferances are being put foreward as "the plumb-line".
A voluntary agro-industrial commune would probably fit the bill but I suppose I meant some less specific. I'm starting my thought from the fact that there exist several competing heterodox economic theories about money, equilibirum, value, interest, employment etc. There are Austrians, Post Keynesians, Sraffians, Neoclassicals, Marxians and so on. From a purely unpoliticized standpoint, they all have different views on what the outcome of market interactions (your point about property rules notwithstanding). For example, Piero Sraffa believed that the distribution of wage rate and profit rate was a degree of freedom that was exogenous to a system of cost and price, i.e. it was completely open to political struggle. My point is that none of these schools has the last word on political economy as much as they would all like to think so. It comes down to these question: what if the schools that see a need for market intervention to obtain certain consequences just happen to be right? They are often attacked for proposing government intervention but that doesn't seem like the only way to develop their ideas. What is the likelihood, in your opinion, that voluntary societies would also create institutions or place a layer of conscious control onto legal and financial transactions within a community? In other words, is it the interference with markets that is the problem or is it the fact that it's usually coercive states doing the interfering or both?
Neverfox: Have you read Orion Shall Rise by Poul Anderson? It's set centuries after a nuclear holocaust. The American Rockies and Pacific Northwest (and running north through BC and Alaska) emerged from the ensuing dark age as the "Northwest Federation." It's central building block was the prewar fraternal lodges, which organized services like police and fire protection, healthcare, restoring utilities, etc., for the membership. If things approach the Vail/Robb/Kunstler level of crisis, I can easily see such associations (emerging not only from current fraternal organizations but from contiguous neighborhoods banding together for mutual protection and support, barter, etc.) serving much the same function as the villa after the fall of Rome.
Brainpolice: I'm of course open to rational discussion. Like some others, I am not bothered at all at mere preferences different from mine, or mere predictions about what would be. I will say I am not persuaded by assertions that in a free market we'd have localism, etc. Maybe so, maybe not. But they have not persuaded me. Sure, roads are subsidized. Why this helps Wal-Mart more than a local store I'm not sure. I happen to think the state regulations destroy wealth and cause overall harm, and that without them most people and businesses would be better off–yes, some subsidies would disappear, but other, greater penalties would too. I have no reason to think this would mean less international trade and mass production.
But so what–so what if someone wants to think that in a free society a Macy's could not exist. Good for them. Fine. The problem I have is when self-proclaimed libertarians–those who are against the first resort to violence as a means of resolving disputes–use their personal preferences and half-baked predictions to cobble together some model of the "ideal" so*nociety and to declare that companies like Macy's are not "really" private because they could never exist on a free market–and, therefore, that they are not the real owners of their property… and thus brick-throwing, worker sit-ins, etc. are not in principle objectionable.
So, if you want to publicize your personal preferences, if you want to give us your off the cuff "predictions" about "what would be"–I have *no* problems with this. I might even agree with some–some–of them. It's when you take it a bit too far, when you assume you know more than you actually do, when you use this as a basis to justify violence against nominally peaceful people and firms (or when you refuse to condemn it on principled grounds–yes, yes, muttering that maybe "it's a bad idea" but not really opposing it on libertarian grounds)–this is when I object.
@Kinsella — re: Macy's. Do you make any distinction between 1) your claim that we're saying large chain retailers could not exist in a free market and 2) the point that large chain retailers have demonstrably prospered from statism?
This seems crucial for a number of reasons, but principally because you seem to be implying that BECAUSE we'd all be objectively more prosperous in a free market generally, THEREFORE deviations from a free market in the form of violent transfers of wealth (theft) can't possibly exist right now and there are no thieves and no victims.
Which would, in turn, seem to imply we're already in your ideal state of affairs.
Otherwise, one is left to presume that Stephan Kinsella is not willing to call a thief a thief when the thieves wear a suit and tie.
As an addendum, I should add that I'm curious how you would square up the supposition that there are no net beneficiaries of statism with praxeology and the reality of special interest lobbying.
We can take the case of defensive lobbying on behalf of particular free market policies and set that aside for the moment. I'm talking about lobbying on behalf of statist policies.
Praxeology…
Is lobbying not an action?
Is not all action goal-driven?
Would you actually claim that special interest lobbying on behalf of statism is only driven by altruistic goals, such as a purportedly high-minded desire for "good government" in the social-democratic sense?
Because I wouldn't.
I think the statist elite lobby for more statism because it happens to feather their own nests in the here and now.
Brad:
I suppose these are distinct claims….?
No, I don’t believe this at all. I do believe that if you think we have general prosperity then that means we have general private property, but that’s a side-point. My view here is that you guys have not given good enough reasons to think that Macy’s, Wal-Mart, etc. could not exist in a free market; and ceratinly not good enough reasons to assert that they are not the presumptive proper owners of the property they nominally own. I think that if there is nominal title to property, that has to be the the libertarian presumption unless you can show a good reason why not. This is just a consequence of the crux of libertarianism: which is the idea that the person with the better claim to a given resource has a better title than other claimants.
Because of the primacy of the first-user Lockean homesteading principle, because of the prior-later distinction’s crucial importance, the current possessor and user of a given resource–its occupant, if you will–has a better claim than anyone else, *ceteris paribus*. You have to have a reason just to oust someone. And having a bunch of left-libertarians academics point to the market-distorting effects of state subsidies and regulations does not overcome this baseline, civilized libertarian presumption.
Now, if you can show that the current owner is, say, a state agency, like the NSA–sure, the initial presumption is overcome. If you can show that the nominal owner is criminal, or stole the land from you, or bought it using funds stolen from you–then maybe your claim is better and you can oust them. If it’s McDonnel Douglas, a military contractor; or a state prison, or even a “privatized” prison–fine. You have a good chance of making your claim. But merely noting that we all live in a world riddled with state interference won’t do–and if it would, it means that no one has any stable rights, that we all live in a chaotic, unjust world, where might makes right, where there is no right, where it’s all against all, and there are no norms. Now, this is a possible position one might take–but it is not the libertarian one. It means something to be libertarain: it means we have a predisposition for peaceful interaction and for attempting to find the best owners for resources, and that implies adopting the prior-later distinction as significant and thus giving weight to the current possession and claim under color of title of a given resource. In essence, when you guys do your generalized handwaving and say this justifies “worker” squatting and sit-ins, when you refuse to condemn the Macy’s brickthrowers *as being aggressors and violating the property rights of Macy’s*–then you are basically equating *every* company or firm with Lockheed and the NSA and the Fed and state prisons; leaving no room for any peaceful dispute anymore–you view the entire world, and all human life, as one big lifeboat scenario.
I’m not ready to give up yet, or call such an emergency. You are free to; you are free to join the lawless hordes; but in this case, you are joining the side of the criminals, the statists, the skeptics, the socialists, and the animals, and become merely a technical problem to be dealt with.
NO, there are some net beneficiaries, surely–but society is not a net beneficiary. If you argue that not only the NSA, the CIA, the military, the police, the unions [woops, scratch that, your sacrosanct group], military contractors, ADM, etc. are net beneficiarys, but you widen the scope so much that you lable even peaceful companies like McDonald’s, Wal-Mart, and Macy’s as part of the state, in essene, then you are basically saying 80% of the economy is just a huge state… and unless you argue that we are not prosperous and productive, then you seem to think that we are prosperous even though we are a huge state, despite the socialist calculation problem. I think that if so much of the economy is in essence socialized already, it cannot be prosperous–cannot be a net gainer. In fact then we would have conditions like seen in Soviet Russia etc.
But this is a side argument, not really essential to my view. I’m just pointing out the consequences of your own views. In sum, if you say Macy’s is not the proper owner, then that means Macy’s is part of the state; and that means that most of the economy is part of the state, if you are using such loose criteria; and that means that we somehow have a fairly productive state, despit the calculation problem! Miracle!
Kinsella: I'm curious as to what you have to say about the eminent domain abuse of chain stores. I hope you're already familiar with what I'm talking about, but if you're not, I can give you a brief recap. Large chains like Wal-Mart are notorious for lobbying local governments to use their eminent domain powers to oust small businesses and give their property to chain stores for development. Local governments go along with it because it allows them to raise extra sales tax revenue for their pet projects without raising property or sales taxes (which is politically infeasible). Sometimes generous local governments will even throw in subsidies to sweeten the deal. Here's a good article on the topic: http://www.reclaimdemocracy.org/articles_2004/emi…
How can you seriously argue that chain stores aren't beneficiaries of state robbery?
re: “I suppose these are distinct claims….? ”
Well, yes, they are distinct claims.
Saying X “per se” could not exist in a free market is not the same thing as saying X (as they currently exist) are net beficiaries of statism.
re: “No, I don’t believe this at all.”
Great!
re: “My view here is that you guys have not given good enough reasons to think that Macy’s, Wal-Mart, etc. could not exist in a free market; and ceratinly not good enough reasons to assert that they are not the presumptive proper owners of the property they nominally own.”
Note again that these are distinct claims. I am engaging the latter of the two below.
Your assertion is, essentially, that large chain retailers (as they currently exist) have not been shown to be guilty of being net beneficiaries of statism.
I first wish to praise you on the form of that argument. While I disagree with it, you are arguing rationally with regard to that point.
At this time, I’d like to ask if you have articulated a standard of guilt that could be applied to large chain retailers as well as to large defense contractors.
I ask that because asserting that any standard of guilt that finds large chain retailers innocent of being net beneficiaries of statism merely *because* they are large chain retailers and not defense contractors is unconvincing in the face of directly identifiable state subsidies to large chain retailers.
Saying we have not met the burden of proof is fine, but it only carries weight if one is willing to discuss where that threshold might be.
Furthermore, why does finding that the class of criminals is found, through analysis and argumentation, to include X (even though X was formerly regarded as innocent) then mean that there are no criminals and no victims at all?
You don’t see that as prematurely giving up on your analysis?
I mean, it’s not like you’re trying to obfuscate the matter, right?
So why can’t large chain retailers be guilty? If you’re going to rule that out, state your reasons rather than engaging in consequentialist hand-wringing.
To clarify…
re: "NO, there are some net beneficiaries, surely–but society is not a net beneficiary"
You are here conflating X (large chain retailers) and Y (society generally).
That is not an honest approach to this argument, and an ongoing tendency toward such tactics is precisely why many are coming to regard your objections as — well, "lacking".
Preliminary not: I see that my use of blockquote in my last post didn’t work–so apologies for assuming too much.
aquemere:
“Kinsella: I’m curious as to what you have to say about the eminent domain abuse of chain stores.
How can you seriously argue that chain stores aren’t beneficiaries of state robbery?”
I’m against it, and it’s unlibertarian. But are they net beneficiaries? They are also taxed and regulated. And what is a “net” beneficiary anyway? And so what if they are? What’s the criterion, and the theory, here? Is it some kind of unclean hands doctrine-if you’re not lily white, your property is up for grabs? Etc.
Brad Spangler:
“Your assertion is, essentially, that large chain retailers (as they currently exist) have not been shown to be guilty of being net beneficiaries of statism.”
No it’s not. Even if they are “net beneficiaires” of statism, whatever this means–so what? Is there some theory out there that you are taking for granted, that says if you are a “net beneficiary” of statism then you have no rights…? What?
But yes, of course I argue this has not been shown anwya. I think almost everyone would be vastly better off in a free market. (see e.g. L. Neil Smith’s argument that we would almost all be 8x richer, easily — http://lneilsmith.org/utopian.html )
“At this time, I’d like to ask if you have articulated a standard of guilt that could be applied to large chain retailers as well as to large defense contractors.”
No, I haven’t; but if I wanted ot make a particular case against a particular person, the burden would be on me to establish this. I think it’s easy in the case of the state itself, and also easy in the case of anyone engaging in per se aggressive behavior. It’s also pretty easy in the case of defense contractors. But Macy’s? Good god. And the problem is the arguments I see are pathetically weak. They seem to be basically that (a) there are roads; and (b) corporate statutes. Come on. WEak weak weak. Roads benefit not just large companies; and they cost everyone too, e.g. in taxes and in poor quality. As for limited liability and corporate status–I think we’ve beat this one to death. If I read correctly even Carson admitted he leans to Hessen’s position.
“Saying we have not met the burden of proof is fine, but it only carries weight if one is willing to discuss where that threshold might be.”
I disagree–the burden of proof, even the burden of theorizing, is on you. You figure it out, and defned it.
“So why can’t large chain retailers be guilty?”
Of what? Sure, they are not lily white. MOst people are not. Most support the state. Are they now not legitimate properyt owners?
“I’m against it, and it’s unlibertarian.”
So, you’re saying that Wal-Mart, for instance, is not the legitimate owner of a piece of land it acquired through eminent domain and, therefore, that we should not respect its “property rights”?
“But are they net beneficiaries? They are also taxed and regulated.”
The purpose of taxes and regulations is to cartelize industries, so I don’t see how this is an argument against me.
“And what is a ‘net’ beneficiary anyway?”
I never used the term net beneficiary, so I’m not sure why you’re asking me this.
Your articles are always very interesting Kevin, and I am generally sympathetic, even though I can’t say that I consider myself a mutualist as yet. But this article puzzles me, since it seems to be aimed at the faux free-market rhetoric and vulgar libertarianism of the Republican Party. But who among your potential readers is susceptible to those delusions? Surely not, in the main, the anarcho-capitalists at Mises.org who seem to be the prime sparring partners to the left-libertarians in these on-line debates. Kinsella has a point when he says that none of the libertarians he knows are Reaganites and Thatcherites. Are you not setting up a straw man?
Now, as someone who educated himself in economics mostly via Austrian sources, it is by no means self-evident, no matter how “honest” I decide to be, that countercyclical spending is necessary or even good for economic recovery, given that I believe the Fed to be the source of business-cycles and that the Keynesian fiscal model was discredited by stagflation in the seventies. Unless of course by “the existence of a corporate economy on the present model” the inefficient and overvalued money-for-nothing tulipomaniacs in Wall Street and the banking world- then yes, those folks are ultimately dependent on government, just as the merchants of death are dependent on military Keynesianism. But then all the Austrians are in favor of letting all these guys go to perdition.
Not that I wouldn’t change my view, given a better explanation than the one provided by the Austrian business-cycle theory- but I’d like an argument, please.
“I make no secret of the fact that I prefer the kind of statism that weighs less heavily on my own neck.”
Indeed, don’t we all. So does Bernie Madoff, Rupert Murdoch, Bill Gates, and an endless army of professionals who would man the admistrative/managerial/therapeutic state. Are you as influential in getting what you want out of it as they are? Can you compete? And do you really think, on net, that the Democratic party will in fact ease up on the pressure of that boot stomping on the human face? As for myself, I used to think that Dems played good cop to the Republican bad cop, as a necessary illusion for the untergang of mass democracy, but I’m not even sure there’s that much difference anymore.
All the more reason for us anarchists to stick together.
tehdude: We don't have that large a statistical population of major downturns to choose from, between the rise of mass production industry and the massive "liquidation" of capital in WWII that bought the system another generation of life. At the time of the crisis of the 1870s, the expansion of the railroad system as a sink for capital (what Baran and Sweezy call an "epoch-making" industry) was going full blast, and ditto for the mass production industry dependent on it. The first real depression of the mass production era proper was that of the 1890s. And arguably the Great Depression of the 1930s was the worst of all because it was the culmination of crisis tendencies from overaccumulation.
rmangum: Since I started writing these posts, the main audience I've tried to keep in mind is people (especially liberals, self-styled "progressives" and mainstream leftists of the Nation and Mother Jones variety) who are familiar with libertarians only as "pot-smoking Republicans," and have generally bought into the official "big govt. vs. big business" narrative. My goal has been to point to the central role of the state in creating all the injustices they complain of, and the hyporisy of most "free market" rhetoric in mainstream American politics.
Re ABCT, I certainly agree that credit expansion has played a significant role in the development of state capitalism. I just don't think it's the Rosetta Stone of the business cycle. See, for example, Joseph Stromberg's Austrianized version of overinvestment/underconsumption theories in "The Role of State Monopoly Capitalism in Empire."
One of my objections to Austrian money and credit theory, in general–more of an incompleteness than an error per se IMO–is its overemphasis on "wage-fund" treatment of capital and investment as accumulated past savings (what Schumpeter called "money theories of credit"), to the neglect of capital as a socially-mediated claim to *current* production (see Hodgskin's argt in "Labour Defended") and of money as an accounting system for providing liquidity for exchange between producers and enabling advances of current against future output through LETS systems and the like (what Schumpeter called "credit theories of money").
More later on questions of political strategy.
I could not read every comment, so I apologize if this has already been mentioned.
The problem with Macy's is not the building of the stores, or even their purchase. It is the operation of the credit financing system which makes the stores possible. Macy's does not make their money on selling products – they make it by selling products on credit. If there were no state to facilitate and enforce the operation of the Macy's Credit Cards there would be no Macy's. Without the financial system we have now, Macy's would not be able to convert the checks it receives in payment into salaries and the purchase of more goods, etc. It could not securitize its receivables so that it can issue more credit. It could not garnish the wages of those who refuse to pay or sell bad securities to debt collection agencies.
Should all of this be abolished so that there is no Macy's? At this point, I am not so sure. I would certainly favor a kind of voluntary financial exchange whereby they would accept a debit/payroll line of credit card from an employee-cooperative. While they could, of course, offer a store card – I would hope that a system exists where employees of anarcho-syndicalist companies would not have to use it.
This example pretty much covers my views of what should happen to the financial system as well.
Social Credit assumes that government intervention to counter the effect of savings (the B is Say's Law) is essential. However, in a society of employee-owned companies, all of the "B" is owned by the producers of "A". In fact, B becomes A for retirees. In a totally closed system there is no problem, assuming that the cooperative produces all product and owns all resources. Any "credit" that needs to be issued can be done so on the books of the cooperative so that the only requirement is to make sure that enough children are produced to keep the Ponzi scheme going.
This is well known that money makes us autonomous. But what to do if somebody has no cash? The one way is to get the loan or collateral loan.