Most of us are taught to think of a monopoly as simply any lone seller of a good or service, but this definition is fraught with problems, as Murray Rothbard, Austrian economists generally, and others have long pointed out. It overlooks, for example, the factor of potential competition. If a lone seller knows that someone could challenge his “monopoly” by entering the market, that will tend to influence the seller’s pricing and service policies. Is he then really a monopolist even if, for the time being, he’s alone in the market?

In deciding who is a monopolist, we also face the problem of defining the relevant market. The Federal Trade Commission once charged the top few ready-to-eat breakfast cereal companies with monopolizing “the market.” But what market? The FTC meant the market for ready-to-eat breakfast cereals. But that’s not all that people eat or can eat for breakfast. If you define the relevant market to include bacon and eggs; oatmeal; yogurt; English muffins and butter; bagels, lox, and cream cheese; breakfast burritos; and anything else people may find appealing in the morning, a “monopoly” in ready-to-eat cereals looks rather different. Even a single cereal seller (assuming no government privilege) could not price his product without taking into account what his rivals in other foods, and consumers, were doing. He could not even be sure who his rivals were until they arose in response to his consumer-alienating actions.

The conventional notion of monopoly has also been subjected to the reductio ad absurdum. In deciding who is a monopolist, where do we stop? Only one shop can occupy the northeast corner of Elm and Main in Anytown. A particular consumer could decide it’s too costly in time or effort to cross the street and buy at the rival shop on the northwest corner. Does that make the first shop a monopoly?

I have exclusive domain over my own labor services and tools (laptop, etc.). The same is true for each reader. Does that make us all monopolists? If so, how useful is the concept? (Much of what I’ve learned over many years about monopoly and antitrust I learned from Dominick T. Armentano. See Antitrust and Monopoly: Anatomy of a Policy Failure.)

Ludwig von Mises, I should acknowledge, believed that in theory there could be “instances of monopoly prices [harmful to consumers] which would appear also on a market not hampered and sabotaged by the interference of the various national governments and by conspiracies between groups of governments.” However, he added, these “are of minor importance. They concern some raw materials the deposits of which are few and geographically concentrated, and local limited-space monopolies.”

In chapter 10 of Man, Economy, and State, Rothbard critiqued the concept monopoly price as useless in a free-market context because identifying it would require knowledge of a product’scompetitive price, which itself cannott be identified. All we can observe is the price that emerges from buying and selling on the market. Other Austrian economists, such as Israel Kirzner, think Mises was right.

Adam Smith’s approach to monopoly makes more sense than the mainstream neoclassical view. To Smith, monopoly denoted a privilege, a legal barrier to competition, such as a license or a franchise — in other words, a grant from the state. Anyone who attempted to compete with the monopolist would run afoul of the law and be suppressed by force, because that’s how the state assures its decrees are faithfully carried out. When someone whose actions are consonant with natural rights is suppressed by force, that is aggression.

Hence my claim that the concepts monopoly and aggression are intimately related. Quod erat demonstrandum.

Monopoly-building interventions take forms other than outright franchises and licenses. Tariffs and other restrictions on foreign-made consumer goods impose monopolistic, or at least oligopolistic, burdens on consumers by preventing or hampering competition from producers outside the country and thereby raising prices. If the restricted goods are producers’ goods, they burden domestic manufacturers as well as consumers.

Intellectual-property laws — patents, copyrights, and the like — have a similar effect by hampering competition through prohibitions on the use of knowledge and forms that people possess mentally. The creation of an artificial property right through patents is practically indistinguishable from a franchise or license. Its harm to consumers is the same.

Frédéric Bastiat appears to have understood this, though he was not always clear. (Yes, this whole thing has been an excuse to write about one of my favorite thinkers.) In his unfinished magnum opus, Economic Harmonies, Bastiat said some interesting things that bear on this issue.

Bastiat praised the competitive market process — where the state abstains from plunder on behalf of any special interests — precisely because it transfers “real wealth constantly … from the domain of private property into the communal domain.” (I detail his argument in “Bastiat on the Socialization of Wealth.”) What he meant was that, when economizing, profit-seeking producers substitute the free services of nature (water, gravity, electricity, wind, etc.) for onerous human labor, competition drives down prices to reflect the lower production costs. When consumers obtain the same or greater utility at a lower price, they enjoy free of charge some of the utility they previously had to pay for with their labor. Innovation-with-competition delivers the fruits of the services of nature gratis, and the whole community benefits.

This is why Bastiat said that the market transfers wealth from the realm of private property to the “communal realm.” Producers who formerly reaped returns on human services that provided utility to consumers now instead employ nature’s services from which they can reap no return at all. As a result, we all get increasing amounts of free stuff.

But free competition is crucial. Bastiat used the example of a producer, John, who invents a new process “whereby he can complete his task with half the labor it previously took, everything included, even the cost of making the implement used to harness the forces of Nature.” In that case, Bastiat writes, “as long as he keeps his secret, there will be no change” in his product’s price, that is, its exchange ratio with other goods.

(For Bastiat, prices are formed, not according to the amount of labor that goes into goods, but by the toil and trouble, subjectively conceived, that consumers are saved by engaging in exchanges of services rather than by producing goods for themselves. He calls the English economists’ axiom Value comes from labor “treacherous.”)

Why will there be no change in price, or what Bastiat calls “value”? “Because,” he replies, “the service is the same. The person furnishing [the good] performs the same service before as after the invention.” So long as John can keep his secret, other things equal, the terms of exchange will remain unchanged.

The important question is: how long can John keep his secret? Bastiat went on to say that the old price will fall “when Peter, [a consumer and producer of another good to be offered in exchange],can say to John: ‘You ask me for two hours of my labor in exchange for one of yours; but I am familiar with your process, and if you place such a high price on your service, I shall do it for myself’” (emphasis added).

Bastiat is clearly happy about this. I interpret this to mean that he did not approve of patents, which would prevent Peter from exploiting his knowledge of John’s invention in order to save himself (and other people) money.

In fact, Bastiat follows up that passage with this:

Now this day comes inevitably. When a new process is invented, it does not remain a secret for long. [Emphasis added.]

The resulting fall in price “represents value [not to be confused with utility] eliminated, relative wealth that has disappeared, private property made public [emphasis added], utility previously onerous, now gratuitous.” (As my earlier article notes, Bastiat expected this kind of talk to get him accused of being a communist. Can you imagine?)

What I want to emphasize is this: in Economic Harmonies, which Bastiat wrote late in life and despite what he may have said elsewhere (and in distinguishing between patents and copyright, he was by no means unambiguous), he appeared not to regret that an inventor was unable reap returns by forcibly thwarting imitators. (In a letter, he wrote, “I must admit that I attach immense and extremely beneficial importance to imitation.” Hat tip: David Hart of Liberty Fund.) He expressed no concern that imitation would discourage innovation.

So-called intellectual property is the dominant engine of monopoly in modern economies. Fortunately, cheap technology makes enforcement increasingly difficult, and we may look forward to the day when it disappears entirely. Which underscores my point: to rid society of monopoly we must rid society of aggression.

Now let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction.

True enough in left-wing market anarchy. It’s not true under capitalism though. An employer may use their ability to offer a reward to dependent employees as a tool of control. A lowered wage may be enacted to punish the dissenting worker. Political power also bolsters capitalists, so a strict separation of them under capitalism isn’t present. Not to mention that employer-employee wage labor often involves government on the side of the employer.

If not forcibly suppressed, there may still be employer-employee wage labor in a free society. The liberating effects of a freed market would render the power dynamics involved much more egalitarian though. This would render the destructive form that can be taken by economic power above relatively null and void. It may not be entirely eliminated, but it would be significantly reduced than under capitalism.

Under left-wing market anarchy, power would also be much more dispersed. The decentralizing effects of market forces would render concentrations of power unstable or unworkable. The ability to inflict damage on others through economic means would be tempered by massive market competition. There would be tons of independent producers and cooperatives of producers to deal with. This would make it easy to avoid a producer who is economically abusive.

Such economic abuse in left-wing market anarchy might take the form of demanding far too much for a product or denying someone access to economic resources for bigoted reasons. Freed markets would be one, but not the only, way of dealing with this scenario. One can also imagine a social boycott or protest as a means of ensuring people aren’t exploited. Oppressive power need not always be fought with coercive means. It depends on the form such power takes. There would be no institutional home of aggression in left-wing market anarchy, but there might be instances of power projection like the above. It’s also true that rogue individuals or collectives might try to initiate force, but the power of a left-libertarian culture would render this less likely.

In working for the realization of left-wing market anarchism, one shouldn’t lose sight of the above. The analysis of power dynamics is crucial for understanding what freedom looks like. All are welcome to add their own analysis of said dynamics in the comments section below.

A revived draft, including both males and females, should include three options for new conscripts coming out of high school. Some could choose 18 months of military service with low pay but excellent post-service benefits, including free college tuition. These conscripts would not be deployed but could perform tasks currently outsourced at great cost to the Pentagon: paperwork, painting barracks, mowing lawns, driving generals around, and generally doing lower-skills tasks so professional soldiers don’t have to. If they want to stay, they could move into the professional force and receive weapons training, higher pay and better benefits.

This is the blatant promotion of mandatory, menial and poorly paid labor for youth. This is a fiscally conservative proposal to exploit cheap labor to save the government money. No well paid workers! Just cheap conscripts who have no exit and ergo no ability to contest crappy wages and tasks through voting with their feet – will Ricks allow conscripts to unionize? One has to wonder. Unionization would mean the effective ability to challenge exploitative wages.

He goes on to say:

And libertarians who object to a draft could opt out. Those who declined to help Uncle Sam would in return pledge to ask nothing from him — no Medicare, no subsidized college loans and no mortgage guarantees. Those who want minimal government can have it.

What about libertarians or people generally who can’t afford to lose government aid in our present corporatist system? No answer from Thomas Ricks. They would presumably still be compelled to serve the aims of government. A good example of how government aid can come with awful strings attached.

Aside from the above, there is an additional ethical issue with Rick’s proposal. The fact that it relies on the initiation of force to even attempt to enact it – it may not end up working even then. The use of aggressive force is a major evil. Thomas Ricks shows no sign of understanding nor even recognizing this truth.

This absence of a concern with the aggressive use of force required leads him to make another dubious argument. Near the end, he says:

But most of all, having a draft might, as General McChrystal said, make Americans think more carefully before going to war. Imagine the savings — in blood, tears and national treasure — if we had thought twice about whether we really wanted to invade Iraq.

Whether or not he is correct in his argument; he ignores some salient points. Conscription makes it difficult for people to vote against the war by declining to volunteer to for it. Anthony Gregory points out that a better solution to dealing with the problem of unjust wars is to allow soldiers to quit their jobs. The more moral choice is to work to make this a reality. One way to go about attempting to do that is by encouraging mass non-violent revolt within the military. One could also take a more legalistic route by bringing a lawsuit against the Defense Department. One could invoke the no involuntary servitude part of the Constitution. Both of these options deserve further consideration!

No one should raise the stars and stripes on the 4th. The proper flag to raise on the 4th of July is the black flag of anarchy. It’s far more revolutionary than the military colors of the U.S. government. This is especially true, because of the frequent aggressive military actions engaged in by the American state. The status quo has been statism and militarism for ages. A genuine revolution would overthrow both.

This appropriation of nominally statist holidays is a good way to reach the broader populace. People are more likely to respond to imagery related to what they are familiar with. This is the tactical relevance of reinventing these holidays. It allows the anarchist message to reach a greater number of people. This is important for the purpose of garnering mass support.

In garnering mass support through these means, anarchists are changing the culture from a state reverent one to an anti-state one.  A change in culture is essential for the success of political and economic liberty. The changing of holidays is a crucial part of our struggle against government.  Its help in cultural progress could be immense. It’s a chance not to be passed up.

A related subject pertains to whether we ought to make use of our own unique holidays as well. The answer is a resounding yes. There are anarchist themed holidays like May Day that should be preserved. It’s an integral part of our history as anarchists. The historical is not always worth keeping around, but this celebration is.

The fact that keeping around May Day is worth it raises the question of how we can make it even more anarchistic. We can emphasize the role of government in oppressing the working class. The use of military and police power to break strikes.  We can put an emphasis on how government redistributes wealth upward to a governing class. Let us begin to do this today!

“The libertarian is in no sense a utopian. He argues only that in a world in which each imperfect individual was left free to make his own imperfect decisions and to act on them in any way that was peaceful, enjoying the fruits of his successes and suffering the agony of his mistakes, man could at least fully attain to the dignity and tragedy and comedy that comes with being a man rather than a thing.” –Benjamin Rogge, “The Freeman” October 1969

WHAT ARE LIBERTARIANISM, ANYWAY?

Let us suppose that an ichthyologist (fish scientist) is exploring the life of the ocean. He casts a net into the water and brings up a fishy assortment. Surveying his catch, he arrives at two generalizations:

1. No sea-creature is less than two inches long;
2. All sea-creatures have gills.

An onlooker may object: “There are plenty of sea-creatures under two inches long, only your net is not adapted to catch them.”

The ichthyologist dismisses this objection contemptuously. “Anything uncatchable by my net is ipso facto outside the scope of ichthyological knowledge. In short, what my net can’t catch isn’t fish.”

A more tactful onlooker makes a rather different suggestion: “May I point out that you could have arrived more easily at the same generalization by examining the net and the method of using it? The net can never bring up anything that it is not adapted to catch.” [1]

Indeed, there are many ichthyologists of libertarianism who claim that libertarianism is tied to: individualism, Austrian or Chicagoan economics, egoism, utopianism, nihilism, anarchism, a night-watchman state… Well, the list is innumerable. For libertarians expound a wide range of philosophies in many different areas: metaphysics, ethics, economics, structure of government, strategy. There are Aristotelians, Kantians, existentialists, Christians, deists, who would agree on little else except restricting the sphere of governmental activity. There are libertarians who are socialists, syndicalists, mutualists, cooperativists, capitalists, and those who adhere to almost every economic policy. There are anarchists, Georgists, voluntarists, advocates of night-watchman states. There are libertarians who wish to create a free society through education, political activism, creating free-port enclaves and many other techniques.

Each of these, libertarian, socialist, free market economist, objectivist, Christian libertarian, anarchocapitalist and others who regard themselves as libertarians have only one point in common: opposition to an expanded sphere of activity by the government. They identify the focus of harm in society with the government. All of the different schools within libertarian thought interface in one area: opposition to the government (although not necessarily total rejection of government, which would be anarchism–one subset of the wider umbrella concept of libertarianism) and a demand for the limitation of state activity.

SOCIETY VERSUS THE STATE

For libertarians, statist intervention constitutes the ultimate source of both stratified class relationships and the consequent economic exploitation of one class by another. Statist intervention inevitably transforms a free society from a matrix of purely economic means for the acquisition and preservation of wealth to a system infused with the principles and institutions of the political means. The economic means involved the acquisition of wealth through one’s own labor and all subsequent voluntary exchanges, while the political means covers all other methods of acquiring wealth. The latter, therefore, encompasses the direct or indirect expropriation of previously produced wealth, either through direct coercion or threat of coercion. The prevalent method of expropriation (and hence exploitation) is taxation. Taxation is also the source of other indirect forms of intervention which, in turn, leads to even greater exploitation.

While a free society represents the institutionalization of the economic means, the government is the organization of the political means. The introduction of the political means into a society creates a system of statism, i.e., a society with increasing elements of monopoly and class privilege incorporated within it. The state is antithetical to society and statist intervention produces a hampered social structure, a system of monopoly privilege, the systematization of exploitation and class antagonisms.

As long as the use of the political means continues, social evolution will be shaped by a process of class conflict. The state, as the institutionalization of the political means, necessarily generates a process of continuing class conflict since the political means, by its very nature, creates a series of negative sum relationships. That is, one individual or group gains only at the expense of another. This is in comparison to the economic means where all exchanges lead to increased benefits for all participants entering into them, otherwise the exchange would not be consummated in the first place. Antagonistic interests, therefore, emerge from the application of the political means and between those who gain from the use of the political means and those whose wealth is expropriated.

The beneficiaries of the political means in a society are dependent on the existence of the economic means in order to survive and prosper. The political means presupposes the economic means since the political means alone is unproductive and parasitic, whereas the economic means can exist and, in fact, thrives best in the absence of the political means. In this sense, there is always a conflict between society and the state.

LIBERTARIAN THEORY VS. LIBERTARIAN SENTIMENTS

There is an important distinction to make at this juncture between libertarian theory and libertarian sentiments. For there are many philosophies which, while opposing the current state, would, if the opportunity came to pass, enable their exponents to seek to take over the state apparatus or become successful in establishing their own state mechanism, and not only fail to minimize the sphere of state activity, but seek to entrench the state into every realm of human action.

A litmus test is available in the form of a question. Do the proponents of a given school of thought justify any statist intervention? If the answer is yes, then the exponents are not libertarians, although they may have libertarian sentiments. Only if they oppose all statist action, could they be considered proponents of a libertarian theory.

Once the Pandora’s Box of statism is opened with a single intervention, it sets in motion a process of retrogression from a free society to a system characterized by an increasingly statist set of relationships. The political means inevitably distorts the social mechanisms necessary for the successful operation of the economic means in a society. Distortion of the decision-making processes produces dislocations which necessitate one of two actions: either the initial intervention through the political means must be eliminated or additional intervention will be introduced in an effort to remove the existing dislocation. Rather than attempting to remove the original causes of these distortions, the response of governmental policy makers is normally to expand government intervention in the society, thereby aggravating the original distortions even further.

WHAT ARE LIBERTARIANISM?

Libertarianism is a direction, a movement toward freedom and away from statism. Those who uphold libertarianism uphold a free society as a guiding light, a standard for action. He/she may do so by individual effort or by cooperation with others. The total amount of freedom thereby released may not be apparent to all observers, however. Indeed, it is possible that the libertarian and the observer may see the whole in a similar manner, but weigh the alternatives or judge the consequences differently. This is a matter of subject judgment which in the spirit of freedom should be left for each person to consider. However accomplished, the goal is to free mankind (both the individual and society) from the mad Moloch, the state.

Libertarianism is not a single, unified philosophy. Rather, libertarianism is an umbrella concept under whose cover many approaches and schools of thought blossom forth. Libertarianism embraces all of the philosophies that seek to restrict the sphere of state action and release the free modes of social action. What are libertarianism? Libertarianism are the philosophies of freedom!

FOOTNOTE

[1] Arthur Eddington, Philosophy of Physical Science (Ann Arbor: University of Michigan Press, 1967. pp. 16-19)

POSTSCRIPT

What Are Libertarianism, Anyway? was written and published in the 1970’s by the Society For Libertarian Life (SLL) based in Orange County, California. SLL was an organization of young libertarian activists (myself included) involved on local campuses and neighboring communities. The following is the platform of the organization.

THE LIBERTAS STATEMENT

We, as libertarians, affirm:

That full individual liberty is impossible in any society other than a voluntary one that aggresses upon no one;

That men and women require the full and independent use of their own judgment in order to survive at an optimum level, and therefore have a natural right to do their own thing, providing that thy do not physically harm or coercively restrict another individual’s life, liberty or property;

That everyone is exclusively sovereign, and is a slave to no one;

That the individual is best served by society when he or she is free from the forcefully imposed controls of others, acting alone or in concert (as a government);

That all forms of coercion, aggression and fraud are always immoral;

That the only system consistent with personal freedoms in the economic arena is one that does not interfere with free trade between consenting individuals.

THEREFORE, we, as libertarians, resolve to oppose all forms of aggression by any State, Government, self-appointed savior, individual or association of individuals. We further resolve to oppose taxation, conscription, eminent domain, laws which create victimless “crimes,” and all programs forced onto individuals without their consent. It is time that the chains of authoritarianism in economics and morality be broken. Individual rights and coercion cannot co-exist. Liberty cannot be compromised, and we will settle for no less than freedom in our time. (adopted on May 5, 1973)

Arguably the most powerful person in the United States (even rivaling the POTUS), Ben S. Bernanke, has left the Federal Reserve. Since 2006 he has sought to make the economy his marionette. Fed policies, under his direction, worked to manage a collapsed housing market, busted mortgage industry and the 2008 global financial crisis – a manufactured crisis of the command and control mentality over the “free” market. Bernanke engineered perhaps the largest redistribution of wealth in American (if not world) history with massive bailouts given to the financial sector – money stolen from the labor of millions and given to the “too big to fail” economic elite. Aside from the initial 700 billion dollar bailout, a Federal Reserve audit revealed the central bank provided a whopping 16 trillion in secret aid to support the corporate state apparatus. Bernanke has released his reign, transferring power to the first woman in United States history to head the Fed: Janet Yellen.

Yellen was confirmed by the United States Senate on January 6, 2014, further committing Washington to even more Keynesian policies from the central bank. As a Fed official, Yellen was a great advocate of keeping interest rates artificially close to zero, increased government spending, and the controversial Quantitive Easing measures sought by the Fed to direct the American economy. Her rise to power will continue to favor the corporate state, even with rumors of economic growth.

There have been numerous libertarian/Libertarian arguments against the central bank. It is not my wish to re-invent the wheel. Most of these arguments, however, stem from the political right – most notably Ron Paul and even greater arguments from his mentor, Murray Rothbard. There is surprisingly little noise from the traditional left – the libertarian or market left - about the central bank, however. Even the famous American leftist and anarcho-syndicalist/libertarian-socialist Noam Chomsky supports central banking. Rather than re-invent the wheel, with this essay I hope to add to the small but sound left-libertarian opposition to the Federal Reserve.

A Brief History of Central Banking in the United States

Alexander Hamilton, the first Secretary of the Treasury, was among the first American politicians to argue for, and help develop, a central bank. Hamilton thought it would be irresponsible to place much democratic or economic control in the hands of the American populace. Hamilton and other federalists believed the country should be ruled by the economic ruling class – the elite, the educated and the privileged. Federalist John Jay put it as bluntly as possible: “Those who own the country ought to govern it.” Hamilton and company favored a strong national government, a broad interpretation of the constitution and put national unity above individualism and states rights. Their economic model, of course, was centrally planned with strict regulation of state economies. From this mindset the first central bank was born in 1791.

Hamilton’s bank, the First Bank of the United States, was kept out of the public arena and operated as a private financial institution. Hamilton’s main argument for the First Bank was that it would help repay the new nations war debt (Morgan 2012). Throughout its existence, however, the bank was met with popular backlash. Objections to the Federal Reserve today echo what was argued against the First Bank: It served moneyed interests (northern corporations), was a threat to property rights and restricted real economic growth (Morgan 2012). Some politicians of the time, notably Thomas Jefferson and James Madison, argued the bank was unconstitutional, that only congress, not a private bank, had the power to tax and print money. In 1811 the Bank was deconstructed as congress voted not to renew its charter (Morgan 2012).

In 1812 the United States found itself in the midst of another war and more national debt.  To deal with a growing financial crisis, Congress voted to charter the (larger) Second Bank of the United States. The Second Bank, at the moment of inception, was poorly managed (Scur 1960). A year and a half after it opened it almost collapsed, and would have, if not for Langdon Cheves. Cheves was the second president of the new central bank and effectively administered its operations. Still, popular sentiment about such a powerful, private institution raised concerns about the Second Banks existence (Scur 1960). This sentiment, and Andrew Jackson’s political clout, would ultimately dissolve this Second Bank in 1836.

The United States was free of central banking until yet another major war erupted. The Civil War, and the need to pay for it, again began the quest for a National Bank. In 1863 the “national banking system” (not a central bank) was developed (MFED 2013). The new banking system, with a national charter, dictated that banks had to issue government-printed bills for their own notes, these notes had to be backed by federal bonds – the war effort was funded (Sylla 1969). In 1865, as the war waged on between the industrialized North and the agricultural South, state bank notes were taxed out of existence – a uniform national currency was established in the United States for the first time (MFED 2013).

With the civil war financed and “won” by the Union, and with a uniform currency, the United States experienced a bank panic in every decade afterward (MFED 2013), ah,”The Gilded Age.” Economic panic began in 1873 due to runs on the free banking system. A “run” occurs when a large number of customers pull their money from banks (MFED 2013). The runs would lead to more and more folks withdrawing their money, causing a system wide economic panic. With the depression of 1893, the Spanish-American War of 1898 and the deep recession of 1907, banking moguls and the United States Government again sought the establishment of a central bank (Sylla 1969), as opposed to letting the market equilibrate.

What followed was a series of Congressional acts that led to the establishment of the Federal Reserve Bank. The Aldrich-Vreeland Act of 1908 established the National Monetary Commission, charged with managing the nations finances, which called for government intervention in the economy, via currency development, during times of financial crisis (MFED 2013). The election of Democrat Woodrow Wilson brought with it the Federal Reserve Act of 1913, and American involvement in World War I. The Federal Reserve System was designed to be a government (not public) institution. The new central banking system was to work closely with the United States Treasury.

What followed the establishment of the Federal Reserve, after WWI, was the roaring twenties, further industrialization, the Great Depression, World War II, The New Deal, the rise of Keynesianism, explicit fiat currency, multiple recessions, the Korean War, the Vietnam War, multiple military interventions overseas, neoliberalism, the rise, fall and decay of the middle class, booms and busts, economic bubbles, artificial scarcity, artificial abundance and much more. In the wake of such history, the Federal Reserve has operated independently of the political process (MFED 2013). The Fed has become an independent centralized bank that is utilized to manage, and some would argue control, the United States economy.

The history of central banking is wrought with military conflict and depressed markets. States have long ignored moral objections to war, but economic restrictions have often halted violence. The printing press, however, allows governments to side step these restrictions. The century of the Fed has been a century of perpetual warfare. As Randolph Bourne wrote, shortly after the creation of the Federal Reserve, “war is the health of the state.” Central banking, Keynesian policies, and states are indeed dependent on jingoism and war. For in war governments flourish – allegiance to state blossoms, class struggle is stilled, spending keeps flowing, and worst of all, human beings, millions of us, die. Liberty is fundamentally opposed to this aggression, as noted here, by Anthony Gregory.

Sadly, as attributed to Nixon: “We are all Keynesians now.”

Liberty and the “Progressive Era”

United States history, like all history, can be defined as a race between social power and state power. It is outside the realm of this essay to describe all of the liberation movements that, in some context, sought the liberty of the true market form. Rather than try I will focus on the Progressive Era, which birthed the Federal Reserve.

The end of the Gilded Age was a period of great turmoil. It was good for business, the political class and those with a monopoly on capital, but the working class, people of color, women, political feminists, labor organizers, etc, realized they could not count on the national government to take their concerns, rights or liberty seriously. The Progressive Era did begin the Age of Reform, but this reform was not enacted to elevate the populace. Instead, reform was used to quiet popular uprisings, democratic social movements, and civil liberties – it was not intended to make fundamental changes to the established order (Zinn 2003).

The era has been termed “Progressive” because of the sheer number of laws that were passed. Upton Sinclair‘s “The Jungle” sparked a labor movement that accomplished passing the Meat Inspection Act, social movements engaged the system to pass the Hepburn Act which supported labor in railroads and pipelines (Zinn 2003), to name just a couple. Particular to the Federal Reserve, Woodrow Wilson’s presidency established the Federal Trade Commission and the Central Bank(s) itself. This was polished as progressive reform to control the growth of monopolies and to regulate the country’s money and banking system. Neither happened, in fact, power and influence of Wall Street only began to grow amidst giant surges of patriotism due to rising conflicts overseas. As noted by Emma Goldman (on patriotism and allegiance to government):

But when the smoke was over, the dead buried, and the cost of the war came back to the people in an increase in the price of commodities and rent-that is, when we sobered up from our patriotic spree-it suddenly dawned on us  … that the lives, blood, and money of the American people were used to protect the interests of the American capitalists.

Due to the work of early American libertarians such as Josiah Warren, Benjamin Tucker, Voltairine de Cleyre, Emma Goldman and others, movements developed that questioned the concentration of power. The labor movement began picking up steam and the marginalized voices in society were becoming amplified. It is true that working people benefited from some of the reforms of the Progressive Era – but the reforms protected the political and economic class from working people, giving just enough to stem off a major rebellion (Zinn 2003). A middle class cushion was manufactured to stem off class conflict as Howard Zinn (2003) explains:

Fundamental conditions did not change, however, for the vast majority of tenant farmers, factory workers, slum dwellers, miners, farm laborers, working men and women, black and white. Robert Wiebe sees in the Progressive movement an attempt by the system to adjust to changing conditions in order to achieve more stability. ‘Through rules with impersonal sanctions, it sought continuity and predictability in a world of endless change. It assigned far greater power to government . .. and it encouraged the centralization of authority.’ Harold Faulkner concluded that this new emphasis on strong government was for the benefit of ‘the most powerful economic groups.’

With the help of the Federal Reserve, Wall Street was able to take firm control of the political system. The market, as it existed, was not able to disperse protests at the grassroots level (Zinn 2003). The economic ruling class championed these reforms, to stabilize the state capitalist system in a time of uncertainty (Zinn 2003). These reforms gave rise to the corporation state that exists today. As noted by individualist anarchist Benjamin Tucker: “Laissez Faire was very good sauce for the goose, labor, but was very poor sauce for the gander, capital.”

Social power is still racing against state power.

The Liberated Market

Enter, Janet Yellen, a grand proponent of quantitative easing in a depressed economy. The Federal Reserve, under her leadership, will continue to serve the politically connected and do very little for the average American. Even Andrew Huszar, an ex-Fed official, in a piece for the Wall Street journal described the programs Yellen champions as the “greatest backdoor Wall Street bailout of all time.”

For all the discussion in the United States today about the proper function and role of our federal government, how to manage the economy, how to battle poverty, how to create jobs and so on and so on, what seems to be missing from national discussion is the true beauty of markets. A banking system, or piece of economic legislation, cannot fix the economy.

Economic systems are developed by the spontaneous order of society. The market is a product of inclined labor, derived from the dreams, aspirations, desires, passions and activities of free people. The market encompasses our places of exchange, but also the rest of human labor – social movements, federations, institutions, decision-making and all of human activity. This behavior cannot be managed from a centralized authority. The work of human beings, our inclined, creative labor, cannot be directed – it can only be realized in liberty.  The liberated market mechanism is the only cure for our past, current and future ills.

Today, in the era of too big to fail, it is corporate monopolies and financial institutions that benefit from the public. As George W. Bush said: “I have abandoned free market principles to save the free market.” What he meant was: “I have again exploited the middle and working classes to serve our economic ruling class.” While Bernanke, with the power of the Federal Reserve, was redistributing wealth to the upper tiers of society, organized people, from a diverse history of social movements, began developing the tools for market liberation.

The true market form, how people engage their labor, exists outside of the state.  The market left speaks of exchange and labor in human terms. The liberated market allows for economic, social and environmental justice. Liberation champions a society that allows the free flow of information, science and progress, democratic values, and the fruits of  labor so these principles can spread without restriction. The liberated market allows us to determine how great we can be. The liberated, free(d) market allows plans by the many, not by the few – it renders Yellen, Bernanke and all bureaucrats of the political class obsolete.

With booms and big busts, giant bubbles, manipulation of the market, a giant national debt and a decaying dollar accompanying promises in future spending, a full economic collapse of the United States government is a very real possibility (see Thomas L. Knapp: Government Spending: Two Steps Sideways, One Half-Step Back). This is scary, we all live here, we all have families here, we all have bills to pay and mouths to feed. Our way of life, however, is not at the mercy of the Federal Reserve or a conglomerate of folks in Washington. Though this realization is indeed scary, it should also be exciting. The market will finally have a chance to equilibrate. As witnessed in Detroit, free people can accomplish much with very little – and free people are already working on the solutions.

If we are to be serious about living in a peaceful and prosperous society, then we must also be serious about competing forms of currency, competing markets and the abandonment of the command and control mentality. Perhaps the Keynesians are right and government spending is the only way to prevent the collapse of state capitalism. What’s ignored by fans of the printing press is that state capitalism is unsustainable. If we all march off to battle there will be full employment, but nothing to eat. The only way out is the liberated market. In the words of Kevin Carson: “In the end we’ve got to find some way off the hamster wheel.”

Instead, may we work together and exchange services to co-ordinate and cultivate markets. The emergence of peer to peer currency, like Bitcoin, and the rise of voluntary exchange are sources of hope. The more we work around traditional power structures, the more we advance social power in our all too important race against the corporate state.

The creative labor of human beings will build markets, mutual aid, relief, decent societies and finally peace.  We can and will build a real and lasting peace that will make life on Earth worth living — a peace for every child of humanity. Free human beings will no longer die for governments and/or capital. The greatest moment in human civilization is within our grasp. It is time we reach out and attain liberty.

As Yellen continues, perhaps even enhances, the disastrous policies of the Fed, may we find solace and peace in the liberated market. May we soon, in liberty, say triumphantly: “We are all Agorists now.”

References:

Chandavarkar, Anand G. Keynes and Central Banking. Indian Economic Review / Volume XX, No.2

Federal Reserve Bank of Minneapolis. (2013) A History of Central Banking in the United States.  http://www.minneapolisfed.org/community_education/student/centralbankhistory/bank.cfm

Morgan, H. Wayne. (1956) The Origins and Establishment of the First Bank of the United States. Business History Review / Volume 30 / Issue 04 / December 1956, pp 472-492

Scur, Leon M. (1960) The Second Bank of the United States and Inflation After the War of 1812. Journal of Political Economy/Volume 68, No. 2

Sylla, Richard (1969). Federal Policy, Banking Market Structure and Capital Mobilization in the United States, 1863 – 1913. The Journal of Economic History/Volume 29, No. 4

Zinn, Howard (2003). A People’s History of the United States: The Socialist Challenge. Harper Perennial.

As the investigation into how Snowden’s acts of rebellion were carried out, the NSA has reportedly uncovered that he accessed the documents via an internal website of the agency itself. The documents were posted to the internal website, and Snowden was able to access them easily with his security clearance. Under the radar of his supervisor he easily made digital copies of what he found.

Since the NSA data was leaked by Snowden the agency has apparently taken steps to limit employee options for storing data in an effort to avoid future leaks. The question, of course, is whether or not such efforts will truly have an effect. If they do stop leakers, will they serve to inhibit the overall communication process between what is already a mess of bureaucratic agencies? In other words, are their systems permanently disrupted no matter what they do?

Perhaps it goes even deeper, into something that has become pervasive. Kevin Carson’s Two, Three, Many Snowdens! has us look at an ever growing class of workers that are rebellious, anti-authoritarian hackers, and who happen to be getting jobs in government security.

***

Para mí, la agresión es la iniciación de violencia hacia una persona o su propiedad. Iniciar una pelea a los puños, robar, cometer un fraude o lanzar una guerra de conquista son casos obvios de agresión, y obviamente distintos de otras formas de influencia negativa sobre los demás. Puede que a uno le moleste que su vecino escuche música a todo volumen durante la noche, que le repugnen los modales en la mesa de la persona con la que uno esté cenando, o que le horrorice la adicción a la pornografía del prógimo. Pero difícilmente podría argumentarse que uno se siente agredido en ninguno de éstos casos. Esa ha sido siempre mi opinión sobre estos temas, por lo que fue una sorpresa agradable encontrar que coincide con la posición anarquista al respecto.

La difinición de lo que constituye una agresión se ve influenciada por cuestiones culturales. Supongamos que los miembros de una nación hipotética consideran de manera unánime, y por razones religiosas, que el adulterio es una aresión, y que por lo tanto condonan la acción violenta que cualquier persona pueda cometer contra un cónyugue adúltero, entendiéndola como legítma autodefensa.

Esta práctica es claramente inaceptable desde una perspectiva anarquista. Pero además, el anarquista nos instaría a estudiar cuidadosamente a esa nación para determinar si en realidad sus ciudadanos condonan unánimemente la agresión contra el adulterio, o si se trata de que un subgrupo de ellos controla al estado y lo usa para imponer agresivamente ésta idea a los demás.

Por otro lado, el anarquista nos diría que a pesar de tratarse de una práctica moralmente inaceptable, la intervención de un estado extranjero en dicha nación, con el objetivo declarado de acabar con dicha práctica, generaría más problemas que los que puede resolver. Nos diría que la misión podría fácilmente ser capturada por los que controlan el estado en la nación invasora para convertirla en una agresiva aventura de conquista que los beneficiaría a elllos a expensas de los ciudadanos tanto de la nación invasora como de la invadida. En una situación extrema como el holocausto Nazi de la Segunda Guerra Mundial, el anarquista apoyaría la invasión aliada de Alemania por razones exclusivamente pragmáticas, ya que en un mundo en el que los estados han logrado monopolizar el poder militar, puede que un estado sea la única entidad capaz de parar las horrorosas masacres perpetradas por cualquier otra de ellas. Pero incluso en esa situación, el anarquista mantendría una postura vigilante ante la posibilidad de que el estado invasor terminase utilizando la situación para fines políticos innobles.

Los anarquistas están particularmente interesados en estudiar una manera aún más fundamental en la que se relacionan el concepto de agresión y la cultura de una nación: la maquinaria propagandística usada por los estados para manipular la manera en que la gente percibe ciertas acciones agresivas como autodefensivas. La actual invasión de Iraq y Afganistán liderada por los Estados Unidos fue agresivamente publicitada por los invasores como una defensa legítima ante una inminente ola de ataques terroristas que serían patrocinadas por los estados de las naciones invadidas. Y la gente fue especialmente receptiva a ese argumento debido al trauma producido por los ataques terroristas del 11 de septiembre de 2001 en la ciudad de Nueva York.

Grandes empresarios trabajan de la mano de políticos en el mundo entero para promover la versión neoliberal del “libre mercado”, cuando en realidad lo que buscan imponer es un agresivo sistema de subsidios, licencias, patentes y otras formas de privilegio estatista que concentra el poder económico en unas pocas empresas en cada industria para el detrimento de trabajadores, consumidores y contribuyentes. Para un ejemplo sumamente incisivo y actual que ilustra el abuso propagandístico del estado para ocultar simultáneamente sus prácticas imperialistas y de privilegio a empresarios domésticos bien conectados, ver este reciente artículo escrito por Glenn Greenwald sobre el rol de los Estados Unidos en la crisis egipcia.

Among other objections, Skwire and Horwitz contend that Borowski “slut shames women who engage in casual sex.”  Woods seems confused by this and writes, “Shows how sheltered I am: evidently there are people in the world who use the phrase ‘slut shames.'”  He then sarcastically dismisses the idea that casual sex is a legitimate choice made by women.

Now, I’m one of the “people in the world who use the phrase ‘slut shames.'”  And since the concept is apparently totally foreign to Dr. Woods, I hope I can explain to him why I think libertarians ought to oppose slut shaming. Slut shaming is the denigration of women as unacceptably sexual, often perpetuated using epithets like “slut” and “whore.”  While it is typically associated with shaming women for activities like casual sex, women can be slut shamed for practically anything. Dressing a particular way, having large breasts, flirting, rebuking sexual advances, being bisexual, and more can all be used as the impetus for slut shaming. Any woman can be slut shamed and there is no concrete definition of a “slut,” leading some feminists to argue that it is more accurate to simply refer to slut shaming as “woman hating.”

But whatever we call it, slut shaming can have dire consequences.  It certainly did for Hope Witsell. After this 13-year-old girl sent a topless photo to a boy she had a crush on, she faced persistent slut-shaming and harassment from her peers. While school administrators did little to stop this harassment, they did see fit to suspend her for sending the photo. Hope eventually committed suicide. And she’s not alone. Felicia Garcia, Jessica Laney, and Amanda Todd are a few other teenage girls who have committed suicide in response to persistent slut shaming.

The tragic impacts of slut shaming can also be seen in many rape cases. Women who are deemed “sluts” are treated as no longer credible witnesses, because if they want sex or have lots of it, it is apparently inconceivable that they might ever not consent to it.  This form of slut shaming was seen in a 2010 gang rape case that was dismissed when it was revealed that the victim had fantasized about group sex. The judge said of the victim, “her credibility was shot to pieces.”  In a 2008 sexual battery case in Georgia, the judge made the victim reveal a litany of intimate details about her sex and dating history. This was used to slut shame and humiliate the victim.

Slut shaming is even wielded against the youngest rape victims. When the New York Times covered of a case in which an 11 year old was gang raped, the paper of record saw fit to focus on the girl’s makeup and clothing. Later in the same case, defense attorney Steve Taylor blamed this 11 year old girl for being gang raped, comparing her to a spider luring men into her web.

And these are just the stories we can read about in the news. But there are likely plenty more instances of rape survivors being slut shamed that we will never read news stories about. After all, 54% of rapes and sexual assaults are never reported to the police, according to data from the National Crime Victimization Survey. This under-reporting can be understood as partially a response to a culture that slut shames and degrades rape survivors who come forward. YouTube user chescaleigh recently posted a video about her experiences with slut shaming after her rape. She provides a powerful look at how rape survivors are slut shamed in the cases that never make it into news media.

And this is why slut shaming ought to be opposed by libertarians. Woods writes that, “The core libertarian value is nonaggression.” I hope we can all agree that rape and sexual assault are clear acts of aggression. Slut shaming and victim blaming are cultural practices that make the victims of this aggression suffer more, all while helping the perpetrators of aggression escape accountability. We should vigorously oppose slut shaming and victim blaming in the same way we should oppose any excuses offered for state violence.

That reminds me: Slut shaming also functions as an excuse for state violence. In particular, it relates closely to the state’s persistent use of violence against sex workers. A recent Human Rights Watch report examined four major US cities where cops will use a woman’s possession of condoms as evidence that she is a sex worker. Because apparently, in the slut shaming minds of police, being prepared to practice safe sex means you’re a prostitute. And apparently being a prostitute means you can be “legitimately” targeted for state aggression. In addition to the usual statist practices of kidnapping people at gun point and locking them in cages, the report also found that police sexually assaulted suspected sex workers. Transgender women were regularly profiled as sex workers, showing how gender stereotypes structure state violence.

Now, none of this necessarily proves that Borowski was in the wrong, as her video did not contain the kind of overtly destructive slut shaming discussed here. Indeed, all she said was that media promotes casual sex and that casual sex is not empowering. It could be argued that Borowski was just making a point that many feminist media critics have also made. However, Borowski made her point in a way that easily could also be seen as denigrating women who choose casual sex and makeup, thus furthering a cultural climate of slut shaming.

But this is not an issue that can simply be dismissed as irrelevant, minor, or “just a joke.” Studies have shown a relationship between sexist humor and sexist attitudes or actions. Casual slut shaming preserves the social environment that makes more severe forms of slut shaming powerful.

Think what you will about Julie Borowski’s video. Whether she promoted slut shaming in it is debatable. But I believe libertarians should conclude that slut shaming, and the social environment it creates, are worth opposing. Because we care deeply about aggression, we should seek a world where aggressors are held accountable and the victims of aggression are not shamed and degraded. Slut shaming stands directly in the way of such a world.

Moreover, as a libertarian I favor human dignity. Slut shaming is a real threat to human dignity. For many teen girls, it means relentless and vicious harassment in public school halls, largely unimpeded by school administrators, who are more likely to punish the victims for their sexuality. As we have seen, this can end in suicide. For rape victims, slut shaming means a shifting of blame. It means their sexual history, their fantasies, and their appearance are all turned into weapons to degrade them when they are already wounded by sexual violence. And for those targeted by police, slut shaming can mean that they will be kidnapped, sexually assaulted, and locked in a cage all under the cover of law. It can even mean that their attempts to practice safe sex become used as evidence to legally justify caging and abusing them. This is what a slut shaming culture looks like. Libertarians must join with feminists to stop it.

***

My very first assignment in the Introduction to Anarchism course at C4SS is a reflection on the concept of aggression.

For me, aggression is the initiation of violent action against a person or their property. Initiating a fist fight, robbery, fraud, and wars of conquest are all obvious forms of aggression, and they are obviously different from other forms of undesirable influence on others. I might be annoyed by my neighbor’s playing loud music at night, disgusted by the bad table manners of a dinner companion, or dismayed by someone else’s addiction to porn. But I wouldn’t say any of these are aggressive actions against me. This is how I have always seen the issue, so I was pleasantly surprised to find that it matches the anarchist stance.

What constitutes an aggression is influenced by culture. Let’s suppose that the members of a hypothetical nation, for religious reasons, unanimously consider adultery an aggression, and therefore condone anyone’s violent action against his/her adulterer spouse.

This practice would be clearly unacceptable from an anarchist perspective. Moreover, the anarchist would urge us to take a closer look at that nation and determine whether aggression against adultery is truly embraced unanimously by its citizens, or is it a case of a group of them controlling the state and therefore aggressively imposing it on the rest.

Furthermore, an anarchist would say that despite adultery being a morally unacceptable practice, the intervention of a foreign state in such a nation with the stated objective of stopping the practice is bound to cause more problems than it can solve. In particular, the venture can easily be politically co-opted by those who control the state of the invading nation, turning it into an aggressive adventure of conquest bound to benefit them at the expense of the citizens of both the invaded and the invading nation.

Faced with an extreme case, like the Nazi holocaust during World War II, an anarchist might have found herself supporting the allied invasion of Hitler for purely pragmatic reasons: In a world where states have overwhelming military power, they might be the only entities that can stop the horrendous massacres perpetrated by any of them. But even then, the anarchist would tend to be particularly vigilant of the invading states’ use of the situation for less noble political ends.

There is an even more fundamental way in which the concept of aggression is related to a community’s culture in which anarchists are particularly interested — the propaganda machines that states use to shape the way in which people perceive certain aggressive actions as non-aggressive. The current US-led invasions of Iraq and Afghanistan were aggressively publicized by the invaders as a legitimate defense against an imminent wave of terrorist attacks to be sponsored by the states of the invaded nations — a message that the public was particularly receptive to due to the shock produced by the September 11 terrorist attacks in New York city.

Crony capitalists all over the world work hand in hand with politicians to promote the neo-liberal idea of “free markets”, when in reality what they impose is an aggressive system of subsidies, licenses, patents and other forms of statist privilege that concentrates economic power in a few firms in each industry at the expense of workers, consumers and tax-payers. For a particularly poignant example that illustrates the state’s use of propaganda to hide its aggressive imperial and crony-capitalist policies simultaneously, see this recent piece by Glenn Greenwald on the American role in the ongoing political crisis in Egypt.

Translations for this article:

• Spanish, Agresión.