According to Allison Linn, a writer for the website of the liberal MSNBC Network, the usual suspects in the corporate economy are engaged in a major rebranding effort (“Capitalism? Yuck! But free enterprise? Yes!” July 21).
It seems they’ve figured out that Americans, as measured by polls and focus groups, tend to react negatively to the word “capitalism.” “Free enterprise,” on the other hand, is right up there with motherhood and apple pie.
So the Texas Board of Education voted to replace textbook references to “capitalism” with “free enterprise.” And the U.S. Chamber of Commerce has eliminated “capitalism” from its propaganda in favor of “free enterprise.”
According to James E. MacDougald, of The Free Enterprise Nation, “There’s been a demonization of the word ‘capitalism’ …. It’s been used so often by people … who are anti-corporate or anti-business that they’ve, I think successfully, created the idea that capitalism and greed are the same thing, where free enterprise isn’t greedy but capitalism is greedy.”
But the choice of the term “free enterprise” is just a transparently lame attempt to polish a … well, you get the idea. The problem is that these people are still defending the present system of corporate capitalism that made them rich — and it ain’t free enterprise. Every single awful thing about the present corporate economy that Americans react to negatively when they hear the word “capitalism” is at the heart of how the dirtbags in the U.S. Chamber of Commerce, who love to toss around the words “free enterprise,” actually make their money.
What the Chamber of Commerce means by “free enterprise” is exactly the same thing that people like Naomi Klein and Michael Moore are attacking under the name of “capitalism.” As a result, most people hear the words “free enterprise” and “free markets” emanating primarly from the same interests that want to protect the system as it is, and that depend most heavily on the suppression of the free market for their livelihood. No wonder establishment libertarianism has such negative “pot-smoking Republican” connotations for so many people.
Believe it or not, though, there are some of us on the free-market left who genuinely believe in free enterprise, and who see truly freed markets as the enemy of corporate capitalism. Far from seeing the Robber Baron capitalism of the Gilded Age as some laissez-faire utopia, we see it as the beginning of a corporate-state system of power which has lasted for 150 years, upheld by massive collusion between big government and big business. The primary function of the state during that time has been to subsidize the operating costs of big business and to protect it against competition. And the interests that talk the most about “free enterprise,” generally speaking, are the very ones most tightly hooked into the corporate state.
A genuine free enterprise system, without state-enforced artificial scarcities, artificial property rights or subsidies, would be like dynamite at the foundations of corporate power. It would be an economy of far more evenly distributed property ownership and decentralized production, looking a lot more like something imagined by Ralph Borsodi than by Alfred Chandler.
So I’d love to issue a challenge to those “free enterprise” hucksters in the Chamber of Commerce: Let’s have genuine “free enterprise,” and let’s have it now. That means repealing the DMCA, WIPO Copyright Treaty, drug patents, and all other “intellectual property” law — and telling the RIAA, MPAA and Microsoft where to get off. It means cutting the automobile-highway complex, the military-industrial complex and agribusiness off from the taxpayer teat. It means eliminating all regulatory barriers to the competitive issue of low-interest credit through mutual banks, against people’s own property or their future earning power. It means ceasing to enforce all absentee titles to vacant and unimproved land. And it means an end to an American foreign policy whose main goal is to make the entire planet safe for corporate power.
My guess is that this is the kind of free market that the U.S. Chamber of Commerce would get Katherine Harris and James Baker to stage another coup to prevent.
Citations to this article:
- Kevin Carson, “Free Enterprise” is Not Free Enterprise, St. Joseph Telegraph, 5 Aug 2010
Note: Re MacDougald's quoted remarks, the next item on the agenda of the anti-corporate folks is to consistently and repeatedly drive home the talking point that the people in the Chamber of Commerce who are talking about "free enterprise" all the time are the worst enemies of free enterprise, and the world's biggest welfare queens.
I say let them try to call their brand of corporate socialism "free enterprise." At least it brings to the fore a term whose definition can be debated. Whereas "capitalism" does not connote the absence of State involvement, "free enterprise" implies a level playing field, not influenced by government. This allows us to point out the many inconsistencies between a truly free market and the rigged game under which we currently live. In just a few lines, you brought up several cases where government "picks winners and losers," totally belying the statist-corporatist PR.
We need to shove "free enterprise" right back in their face until they choke on it.
Don't forget the FDA, USDA, FCC, and Monsanto. I wish I could believe in an afterlife, so I'd know there was a special place in hell for the people who subsidize hydrogenated soybean oil, feed it to kids in their (enforced) lunches, and tell them that eating fucking goat cheese and steak will make them fat.
Thanks for the article. I agree almost completely. There is however one thing that bothers me. It is the reference to "low-interest credit through mutual banks". I noticed same thing in "Iron fist behind the invisible hand" in the chapter on money monopoly. It was the only chapter I had a strong disagreement with. Why do you think the free market interest rates would be lower? Austrians show that for most of the time they are artificially low rather than high. If they weren't pushed bellow the rates that correspond to time prefrences we wouldn't see the massive credit expansion, both for consumption and investment purposes. Rothbard called the anarchists who held that free banking would lead to low interest rates "money cranks". He elaborated on it somewhat here:
http://mises.org/journals/jls/20_1/20_1_2.pdf
Can anybody offer some (counter)arguments on why free banking (potentialy including mutual banks) => lower interest rates?
Nick: I tried to suggest all that with the reference to agribusiness, but in the interest of parallelism I might ought to have put another "-industrial complex" in there.
Jake: I don't see any contradiction between the idea that fiat money makes credit artificially easy for the privileged state capitalist elements standing next to the spigot, while artificial entry barriers enable banks to charge monopoly rents to those situated on the outside. The banks are enabled to lend money into existence, at interest, out of thin air. But they use their licensed monopoly status to turn around and charge a monopoly price for what cost them nothing to create.
Rothbard's argument against "money cranks" contradicts his own understanding of how life insurance company capitalization requirements over and above those indicated by actuarial calculations served as an entry barrier, and hence enabled incumbent insurance companies to charge monopoly rents. Likewise, capitalization mandates as a requirement for licensing even banks engaged solely in secured loans against the members' own collateral operates as an entry barrier and reduces competition in the supply of credit. So if Rothbard understood his own argument re the effect of entry barriers for insurance, he should have understood the exact same argument from Greene and Tucker as applied to credit.
In fact such credit is not really a loan at all–it is simply the service of monetizing the members' own property.
What's more, the Austrian criticism of "soft money" crankery is based on the implicit assumption in favor of what Schumpeter called the "money theory of credit," as opposed to the "credit theory of money." That is, it sees money as primarily a store of past value, rather than a unit of measure for denominating the exchange of present and future goods. For more on this, just do a search on Tom Greco's credit clearing networks.
Finally, Austrian dismissal of other schools' "crankery" is ironic, since the goldbugs are regarded by conventional economists as "hard money cranks" exactly parallel to the way they regard us as "soft money cranks." Us cranks should all be more charitable to one another.
Okay, I agree with everything you say, except I don't understand what point you're trying to make with:
"No wonder establishment libertarianism has such negative “pot-smoking Republican” connotations for so many people."
It doesn't seem to tie cleanly with anything else you've presented.
Kevin> thanks, I'll have a look at some Tom Greco writings
Great post, Kevin. I agree w/ most of your views on this except I don’t think our businesses and corporations are “mostly” in bed w/ the state… there is still a productive core underneath, but how to measure it or quantify it is difficult. And I’m not as enamored of the natural role of mutualist institutions, self-sufficiency, etc. as you are–but as Cinque (Amistad http://www.imdb.com/title/tt0118607/quotes ) said, give us us free and let 1000 flowers bloom!
Thanks, Stephan. I think our disagreement is probably over how one would *measure* the degree of statism. I would argue that by your standard Soviet state socialism or full-blown feudalism had enough of a productive “market” core to permit technological progress and increased standard of living. But by this standard, the calculation problem becomes a universal source of friction that’s just a matter of degree between different economic systems, with nothing short of (perhaps) N. Korea or Pol Pot’s Cambodia actually reaching sufficient statism to create a serious crisis of calculation. By that standard, I’m quite willing to say that corporations are slightly less embedded in the state than Soviet enterprises, and significantly less statist than a North Korean enterprise or a Cambodian collective farm. In that sense, American corporations invest resources to create use value of a sort, the same way that the Soviet economy produced cars and refrigerators that worked well enough that having one was better than not having one–although there was no clear idea of whether the investment was “worth it” or not compared to other uses of resources, and the “use value” often functioned like something out of “Brazil.”
And the “thousand flowers bloom” thing sounds good to me.
Tim: I just meant that when the general public hears the term “free market” thrown around by apologists for big business interests, it feeds into the idea that people who talk about “free markets” are just corporate hacks.
With respect to the re-definition of the term "free enterprise", Hayek's warning about the corruption of language (from "The Road to Serfdom") comes to mind here:
"Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as the complete perversion of language, the change of meaning of the words by which the ideals of the new regimes are expressed….
If one has not one's self experienced this process, it is difficult to appreciate the magnitude of this change of the meaning of words, the confusion it causes, and the barriers to any rational discussion which it creates… And the confusion becomes worse because this change of meaning of words describing political ideals is not a single event but a continuous process, a technique employed consciously or unconsciously to direct the people. Gradually, as this process continues, the whole language becomes despoiled, and words become empty shells deprived of any definite meaning, as capable of denoting one thing as its opposite and used solely for the emotional associations which still adhere to them."
Paul Bonneau: It's interesting that Orwell's "English Socialist Party" did almost the direct opposite in 1984–it changed the name to "Ingsoc" in order to cut itself off from all undertones of worker solidarity, picket lines and barricades, comrades singing the Internationale, and all the other historical associations of the socialist and working class movement.
But there's a direct parallel between the way Stalinism (or for that matter Harold Wilson's apparatchiks) coopted the language and symbolism of the classical socialist movement, and the way the state capitalists have appropriated "Free Enterprise."
Thucydides' passage on the corruption of language during a total war is also relevant.
And while we're at it: Freedom fries!
Kevin,
Ever thought of doing an expose on the writtings of Borsodi? His offerings and analyst on self-sufficiency and homesteading in today's world for us might prove a valuable resource and potential knowledge base. Some of his writtings along with other ideas on homesteading and self sufficiency can be found at Soilandhealth.org or http://www.soilandhealth.org/
2 of Borsodi's books are found under the "social critism" link at the homepage along with a 1974' interview he did with MotherEarth News. Scroll down a bit to find the appropiate link.
Hope you don't mind the suggestion!
BTW: If you have covered Borsodi, my bad. I've been slowly reading several of your works so sorry for the redundancy.
mac
Mac: I actually relied on Borsodi quite a bit in Organization Theory and The Homebrew Industrial Revolution. I'm a huge fan of his work — not only for his views on decentralized production technology, but for his Georgist-influenced ideas on privilege and the egalitarian effects of genuine free markets. I'm glad you're another Borsodi enthusiast.
[…] by Kevin Carson, C4SS […]
It doesn't matter what you call it but only one system works in the long run to provide prosperity for the majority
and that is the free market system. Consider this: http://www.asamanthinketh.info
"Corporate socialism" is a fucking oxymoron. Misuse of "socialism" is one of the most embarrassing things about a lot of libertarians.