Capitalism is Statism
Capitalism depends on state intervention in the market to enforce artificial property rights, to provide subsidies, to erect barriers to entry, and to maintain regulatory cartels — all so privileged holders of artificial property rights can live off artificial scarcity rents. Hence the most profitable players in the global corporate economy are those whose business models depend heavily on direct government subsidies, draconian “intellectual property” law, or both: The military-industrial complex, agribusiness, biotech, pharmaceuticals, software, entertainment, electronics.
The Free Market is Socialism
A totally free market, on the other hand, is the ultimate in socialism. Genuine freed market competition makes capitalism impossible. Free competition socializes the benefits of capital, land, and innovation, and makes it impossible to enclose them as sources of rents.
It’s sometimes asked whether new technologies can be engines of economic growth. Skeptics point to the Dotcom crash as evidence against it. But from the standpoint of the consumer and maker, the main benefits come after such bubbles collapse. It’s the cheapness of a new technology, in terms of its capital outlay requirements, and the resulting ubiquity, that make it impossible to maintain entry barriers or to maintain profit in the face of exploding competition driving down the cost to zero. It’s when the new developments become ubiquitous and free that their greatest social benefits occur.
For example, Web 1.0 and the Dotcom bubble occurred under the shadow of the original, misbegotten “Information Superhighway” vision: A glorified Cable TV system with walled-garden, streaming proprietary content and institutional websites full of corporate/government happy talk. The Dotcom bust killed off this hideous vision (although Apple is still trying to reanimate parts of its corpse). Unemployed tech workers from the Dotcom crash created Web 2.0, turning it into a medium that ordinary people use to network horizontally and take on the power of giant organizations.
In Cory Doctorow’s novel Makers, decaying mass production companies start putting their surplus capital — which they have nowhere else to invest — into garage manufacturing startups. The first such ventures have enormous ROIs, but their capital outlay costs (what with cheap CNC tools) are too small to absorb more than a small fraction of the available capital sitting around. The new technology is adopted so quickly, given the lack of entry barriers, that the initial wave of entrepreneurial profit crashes. In the aftermath, though, every favelah in every abandoned shopping mall in America had its own microfactories, churning out consumer goods and medical equipment.
Unfettered market competition socializes the benefits of technical innovation, so that an ever-growing share of consumption needs become “too cheap to meter” — as opposed to proprietary business models enclosing innovation as a source of rents.
The beauty of the new digital technologies is that they’re impossible to enclose, as traditonal rent-extraction mechanisms like patents and copyrights become impossible to enforce.
Statism is Exploitation
Although “socialism” is commonly equated with state ownership or control of the economy, such forms of organization result not in socialism, but in some new form of class exploitation. Orwell, as “Emanuel Goldstein,” wrote of the eternal struggle between the High, the Middle, and the Low. The typical pattern of a revolution was for the Middle to contest control of the state with the High, and to enlist the help of the Low under a popular banner. Once they seized control of the state, the Middle became the new High and took their own turn at oppressing the Low.
This is inevitable, so long as the goal of a justice movement is to capture the state. The state, by its nature, is not amenable to control by a majority. It is a machine that can only be controlled by a minority. The Iron Law of Oligarchy guarantees it will inevitably become an instrument of exploitation by the class that controls it.
The only way to achieve economic justice is to focus our efforts on building a different kind of society outside the state.
The real significance of the Occupy movement is not its effectiveness in pressuring either the 1% or their state to enact any changes, but its effectiveness in letting the 99% see our own strength and realize that we’re an entire society in ourselves. We’re the producers, and we don’t need the 1% — it’s the 1% who would starve without us. And the imploding cost of new production technologies means their precious land and capital is becoming more superfluous by the day.
Those involved in developing the techniques of self-organized, low-cost production — the free software movement, the micromanufacturing and permaculture movements, etc. — should engage in educational outreach on just how many aspects of subsistence can be provided with tools affordable to the average person, or through trade with other working people.
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Citations to this article:
- Kevin Carson, A “general strike” producing for ourselves, Dhaka, Bangladesh New Age, 11/01/11
In before the vitriol from the LRC readers….
Good post, this one. I have to say, I've been moving away from any talk of "markets" lately because the perception is that you're talking about "the market" or as things exist today. When talking to people who may not be familiar with my position I instead try to describe how it would work: cooperation and exchange; mutual support. To me, and I know to you, these things are synonymous with the idea of free exchange. It's too bad that terms (and "socialism" is a prime example) are so often manipulated by those with power to serve their own power.
I think the author is confusing capitalism for fascism.
I think capitalism is often confused with fascism. Corporations are certainly a keen indication of actual fascism – even well-known fascists like Mussolini have identified corporatism as fascism.
It might be more useful to use newer labels, such as agorism, to describe free markets in the context of libertarian philosophy. Certainly you are likely to run into less discussion with endless anarchists of the red stripe who insist that anti-propertarian anarchism is the only sort.
I think history has confused capitalism & statism… They're not supposed to go together!!
I think history has confused capitalism and the free market… They are supposed to go together!!
I don't think he is confusing the two, they are one and the same. Actually existing capitalism, and any system that is centralized around capital, will be somewhat facist. We can pretend that capitalism is anything other than fascism but fantasy is not helpful when trying to solve real world problems.
Phil, I would suggest that you take an in-depth look into the history of the development of both modern capitalism and modern nation-states; you will find that the two are inextricably intertwined, with each making up fundamental components of the other. Without the institutionalized violence of emerging centralizing states, capitalism in its 'classical' form could never have emerged. Concurrently, without the development of capitalism centralizing states could have never solidified into 'modern' nation-states. This process is not merely history; it continues, albeit in more focused and highly scripted (at least in the 'first world') forms. In, say, Latin America and Africa it is much more naked- the colluding elements of big capitalist and still somewhat emergent nation-states directly and unashamedly collude to drive peasants off their land, establish plantations, build factories, etc. In this country the forms of state and capitalist violence are more occluded, but still absolutely essential.
Frank Luntz, GOP spin consultant, advises Republicans to use the term "free market economy" instead of "global economy", "globalization" or "capitalism".
I advise everyone to use the term "lying fascist pig" instead of the word "politician".
http://www.businessinsider.com/revealed-how-to-ta…
Great article.
mussolini never said the quote that he is so often mislabeled as saying. in the work claimed to be written by him (it was overseen by him, not written), 'The Doctrine of Fascism', mussolini talks about 'corporative' (corporatizmo or something like that, i can't recall at the moment) and about 'corporazione'.
corporazioni is an italian reference to a guild, not the legal construct that anyone would recognize as a 'corporation', but a medieval/ renaissance italian styled guild.
'corporative' is a reference to the basic conception of fascism, that of a unitary body. it would be better translated into english as 'incorporation', but not the legal process, the social process. think of it as 'integration' or 'assimilation'. the basic symbol of fascism is the bundle of sticks, because where one stick can be broken, the unitary whole cannot be snapped. strength through assimilation. this is the epitome of mussolini's references to 'corporative'. it is all actors within the state being incorporated into the state and the state's processes… the church, gangs (as brown/black shirt thugs), social gathering groups, schools, language itself, and yes, industry. this is why people think of being made to look the same as fascist. fascism is forced assimilation of absolutely everything and everyone into the most powerful body politic available in the time of the rise of fascism, the state.
at no point was mussolini referring to the legal fiction we currently call 'corporation'.
what i have described is a far more precise and accurate description of fascism than the reductionist, contextually inaccurate, and misidentified "mussolini" quote. and what kevin described is a contextually accurate description of actually existing capitalism, not it's utopian theory that pretends that no 'iron fist' was needed for historical and contemporary capitalism.
mussolini never said the quote that he is so often mislabeled as saying. you are operating under an extremely flawed, mistranslated, and misquoted definition of fascism.
look below to my response to jim for a far more full explanation of what i mean. i don't think i should write the same thing twice on a single page.
wow! I have long believed in the first subhead (Capitalism is Statism) … swallowing the second one may take me a little time … Socialism has been mislabeled almost as often as its alleged antonym has, and this effort to redefine terms is laudatory.
The best part here is the affirmation that 'the 1% cannot survive without the 99%" and the declaration that the opposite is not so. Empowering self-ownership, voluntary community and peaceful relations for all … yep!
I think we all have our own preconceptions about what anarchism is and what it will look like but… we don't know. Surprising, I know. I think however that we can all agree that any state is worse than no state. Who the hell cares what it's called?
http://www.nolanchart.com/article4246-socialism-a…
My recent post Occupy Live Video Streams from Pirate Party of New York
Kevin, FYI re two deregulatory developments that look promising:
IMPORTANT pro-entrepreneur deregulatory developments:House Passes Two Bills To Help Startups Raise Capital http://bit.ly/tVmmlq
http://twitter.com/#!/Tokyo_Tom/status/1338952504…
My recent post Here's some EXCELLENT passionate intensity on Crony Capitalism! Russ Roberts: "I Want My Country Back"