Appendix: Cui Bono? Introduction To Libertarian Class Theory (1973)

AGORIST CLASS THEORY [PDF]: A Left Libertarian Approach to Class Conflict Analysis By Wally Conger

The Failure of Marxism
The Marxist Appeal
Precursors to Marxist Class Theory
Marxist Classes
The Agorist Critique of Marxist Class Theory
Libertarian Class Analysis
Radical Libertarian Class Analysis
Agorist Class Theory
Agorist Solutions for Marxist Problems
Appendix: Cui Bono? Introduction to Libertarian Class Theory (1973)

Cui Bono? Introduction to Libertarian Class Theory (1973) By Samuel Edward Konkin III

Libertarianism has been denounced by William F. Buckley as “extreme apriorism” (in reference to Murray N. Rothbard in “Notes Toward an Empirical Definition of Conservatism”). Indeed, Libertarians can willingly concede the substance of the charge, if not the pejorative implication of heresy. The fundamental libertarian premise of non-aggression — of unbending opposition to all forms of initiatory violence and coercion to life and property — gives the libertarian analyzing his societal context and seeking out ways of dealing with it a logical “razor” of exceptional keenness. With it, he can slash away the fat of special pleading of various ideologies and retain the lean meat of genuine contributions to his understanding. Perhaps no other ideology, not even Marxism, has such a quality of over-all integration and self-consistency, as indicated by the startling rapidity that this new and complex theory is transmitted to new libertarians.

What follows is an excellent example of the use of “Rothbard’s Razor” in synthesizing an approach and understanding in an area almost devoid of libertarian sources.

The author readily acknowledges that his only original contribution to this field is one of collation and organization of scattered writings absorbed during his intellectual maturation which was fortunate enough to coincide with that of Libertarianism. Above all, acknowledgement is accorded to The Libertarian Forum, Dr. Murray N. Rothbard, and the scholars he inspired.

I. Economic Analysis of Libertarian Class Theory

Dr. Rothbard has noted the inspiration he gained from John C. Calhoun that the State — which we recognize as the monopoly of legitimized coercion — divides men into two classes. The State’s systematic looting of the general public and subsequent distribution of this wealth necessarily distorts the allocation of property that would exist in a free market. By a free market, libertarians mean one in which all goods and services are voluntarily exchanged. An analysis of involuntary exchanges is provided by Power and Market by Dr. Rothbard. At the very least, the resources consumed by the individuals who make up the State’s bureaucracy constitute a net gain by these wielders of power (or they would not engage in the practice) and constitute a net loss to their victims even if the remains were distributed as equitably as possible. In practice, far more is consumed by the Statists and their chosen beneficiaries and is lost by the victims. This is the fundamental division observed by Calhoun and Rothbard: the division of society into an exploiting class of those who make a net gain by the existence of the State, and an exploited class of those who incur a net loss by the existence of the State.

The charge immediately arises that nearly everybody in the modern complex mixed economy makes gains and losses from the State’s actions. Separation and accounting is extraordinarily difficult. Libertarians must agree but respond that firstly, one can improve the moral character of one’s own life by striving to comprehend his sources of wealth, maximizing the non-coercive ones and minimizing the coercive ones, and, secondly, that those enjoying or suffering an extreme imbalance can be discerned and dealt with. Those who are obviously suffering heavy oppression deserve the priority attention from those libertarian humanists concerned with aiding and relieving victims of the State. Those who are obviously gaining overwhelmingly by the State (the “Ruling Class”) can be rightly suspected of directing State policy and becoming priority targets of those libertarian activists interested in achieving a just society.

II. Historical Analysis of Libertarian Class Theory

Here Dr. Rothbard has drawn heavily upon the studies of the German sociologist Franz Oppenheimer (The State) and his American disciple, Albert Jay Nock (Our Enemy, the State). Oppenheimer distinguished two means of acquiring wealth — the economic means and the political means. These correspond to wealth acquired voluntarily by the market and to wealth acquired coercively by power.

I have been fond of using the following paradigm to synopsize Oppenheimer’s thesis. Peaceful farmers and agorists (agora = open marketplace) are engaged in production and trade, having judges, perhaps priests, and chiefs who organize defense against predatory tribes and roving bands of thieves. These bands of savages raid such productive communities for their own parasitical gain, taking all removable wealth, including slaves, and consuming fixed wealth through fire, rape, and murder. Even if constantly successful, the leaders of these raiders soon realize that they will eventually run out of sources of wealth. The first step toward civilization is then taken by leaving behind enough wealth and populace to rebuild so that they may be raided again. The parasites cease to be fatal to their hosts. Of course, the threat of an annual raid during harvest, for example, is somewhat discouraging to the incentive of the productive victims. The more enlightened barbarians move on to the next step — occupying the agorist communities, institutionalizing and regularizing the plunder and rape (e.g., taxation, droit de seigneur). These rulers seek to counter discouragement, resentment, and rebellion by allying (or buying out) the Priests to exalt the ruling class and to convince victims that they are actually benefiting by the presences of these “protectors of order.” Later in history, this function of creating a mind-numbing mystique is taken up by Court Intellectuals as religion wanes.

The plunderers can arise internally, too. Perhaps the War Chiefs and native Priests, seeing the examples around them, convince the locals that they too need a strong standing force to defend the community against invasion by the foreign States. Creating the same mystique, the protectors become the plunderers and a new State is born.

Oppenheimer’s theory complements the Calhoun-Rothbard analysis perfectly by explaining the origins of the present-day States. For a study of actual modern nation-states and the operation of their class structures, we turn to the Revisionist Historians.

III. Revisionist Contributions to Libertarian Class Theory

World War I ruptured the liberal and radical intellectual body. Even anarchists divided on the War Question. The anti-war group among historians began delving into the records to prove the correctness of their opposition and demonstrate to the more idealistic War supporters how they were duped into serving plutocratic war “profiteers,” political chicanery, and closet Imperialism. The widespread disillusionment with the Treaty of Versailles aided such Revisionists and won general acceptance to their exposures. Charles Beard, Harry Elmer Barnes, Sidney Fay, J.W. Pain, and W.L. Langer in the U.S.; J.S. Ewart in Canada; Morel, Beazley, Dickinson, and Gooch in England; Fabré-Luce. Renouvin, and Demartial in France; Stieve, Montgelas, von Wegerer, and Lutz in Germany; and Barbagallo, Torre, and Lumbroso in Italy: these historians became quite chic, especially as leaders arose in the defeated powers to revise the terms of the Treaty, and “appeasers” in the victorious powers to accommodate them.

World War II caused a new split, with Beard, Barnes, Charles C. Tansill in the U.S., and F.J.P. Veale and A.J.P. Taylor remaining (or becoming) Revisionist on the Second War, with others going a-whoring after the new War to End All Wars. This time, the victorious powers managed to impose a “Historical Blackout” through the extensive Court Intellectuals influence in ever more State-financed Universities and historical journals on the Revisionists. The courageous dissenters were vilified as thinly-disguised Nazi-symps, though many had impeccable liberal and social-democratic credentials. Pacific Front revisionism has had some measure of success, but European Front revisionism remains a disreputable activity.

Cold War Revisionism is accepted somewhat less than WWI but more than WWII inquiry and exposure. Most encouragingly, the New Left and “deviationist Marxist” historians who were drawn into Revisionism by their antipathy to the Vietnam War have begun looking backwards for the roots of modern foreign policy.

On the Left, Weinstein and Gabriel Kolko have integrated Revisionist History on foreign policy with domestic ruling class investigation. On the Right, the Birchers have grown gradually less hysterical in their “Conspiracy Theory,” dropping their International Communist devil-theory for exposure of the machinations of U.S. plutocrats.

The Higher Circles by G. William Domhoff begins the synthesis of the varying strands of revisionism into a single sober thesis, adding the sociological surveys of C. Wright Mills “Power Elite” investigations. Domhoff, a Leftist, devotes a section of his book to an earlier rightist conspiracy theorist, Dan Smoot, and finds much of it agreeable. Since then, Smoot has been superseded by Gary Allen’s None Dare Call It Conspiracy.

IV. Libertarian Class Theory — Application to Domestic Policy

Beard goes back to the American secession from the British Empire with his Economic Interpretation of the Constitution. Libertarians tend to begin with the relatively laissez-faire period of the late Nineteenth Century in the U.S., explored by Kolko in his magnificent Triumph of Conservatism. Kolko deviates from orthodox Marxism by claiming that the wicked capitalists did not establish their rule due to inevitable concentration of economic power under capitalism, but rather plotted to gain the State’s aid in destroying an all-too-successful competitive semi-free market which threatened the long-term stability of their profits. Kolko devastatingly points out that the massive regulations of transportation and anti-trust legislation advocated by the anti-monopolistic Progressive movement was actively supported by such powerful businessmen as Andrew Carnegie, Mellon, Morgan, and Rockefeller. In 1905, the National Civics Federation was formed to combat the “anarchist” tendencies of the laissez-faire oriented National Association of Manufacturers (mostly small businessmen with little vested interest wanting to grow, not stand pat). NCF members were urged to support regulations and labor legislation to integrate the labor aristocracy as junior partners in the emerging new ruling class. Over the years, the Higher Circles developed the Council on Foreign Relations to influence U.S. State Foreign Policy (tied internationally to similar groups in Western Europe through the “Bilderbergers”) and the Committee for Economic Development for U.S. State Domestic Policy.

Recently, Ralph Nader has been astonished by the discovery that most of the Regulatory Boards are run by the very industries they were set up to control. One can only begin to imagine what the CFR-CED crowd is doing with the Wage-Price Controls. The CLIC claque is made up of equal representation of Big Business, Big Labor, and Government. Surprise, surprise.

V. Libertarian Class Theory — Application to Foreign Policy

The financing of World War I has some incredible anecdotes associated with it. For example, there were the Warburg Brothers, one financing the German War Effort, the other the Allied Effort. There were bauxite mines in France which provided aluminum for German War Planes, and the activities of the “Merchants of Death,” munitions manufacturers selling to all sides, would be comic if the millions of deaths could be dissociated.

Modern revisionist theory begins with the attempts of the Bank of England to restore the pound’s value. The massive inflation of the War made it impossible to restore it to its pre-war value in gold, and exacting reparations from Germany led to a hyperinflation and crack-up boom smashing the German economy (and led to the 1923 Putsch). The Bank’s Ashley Montagu met with American financiers in Georgia for the purpose of depreciating U.S. currency to improve the relative standing of the pound. Already, the British were clubbing their East European satellites (created between the USSR and Germany by that perfidious Treaty) into following their economic policy.

The Federal Reserve Board’s inflation of the Roaring Twenties (a boom fueled by that very same monetary expansion) led to the Crash, Depression, and Roosevelt’s fascist NRA and IRS jackbooters raiding homes to seize the recently outlawed metal, gold. And, of course, the European fascist autarchies, ripped loose from the world plutocrats’ control, engaged in barter competition with their own interest in mind, and brought on the Second World War in retaliation.

This time, the American Military-Industrial Complex was not dismantled. (See James J. Martin’s Revisionist Viewpoints for a truly horrifying speech reprinted which was given in 1940 advocating just that and telling businessmen to get with it — “it” being the coming new world order.) A new International Threat to Peace was needed, and less than two years after the end of the Second War to End All Wars, Churchill announced that “an Iron Curtain has fallen across Europe.”

Considerable investigation of plutocratic beneficiaries of the Vietnam War is underway, much less so of those benefiting from the Middle East conflict. Some libertarians have already begun to project the interests of the exploiting class power elite to predict the next War.

VI. Alternative Interpretations

A. Marx

While Marxist historical economic determinism draws many scholars in that camp to similar conclusions as those of libertarians, it contains several fatal flaws — over and above the obvious one of economic misunderstanding. The necessity for rigid adherence to a class struggle interpretation based on wealth possession rather than on the means of its acquisition and to an inevitable coming of a proletariat revolution led by organized labor forces the Marxist to judge and rationalize his conclusions to fit at all costs. Perhaps just as devastatingly, Marxism is now a “religion” justifying the existence of dozens of the States in the world, and Marxists are now playing Court Intellectuals and suppressing Revisionists in their midst.

B. Consensus

The “consensus” school, the dominant group of Court Historians in the West, deny the existence of any classes. While there may have been wicked exploiters in the past, they were routed and brought to justice by the Progressive Era, the New Deal, the Fair Deal, the New Frontier, and the Great Society, and whatever is to come. We are left to assume that all these plutocrats are receiving windfalls by the failure of previous reformers to spot all the loopholes and economic imperfections in the free market.

And if the plutocrats who gained the most from State intervention supported Roosevelt, Wilson, Roosevelt, Truman, Kennedy, Johnson, and whoever succeeds Nixon…must be a lot of accidents, coincidences, and the inability of these people to perceive their own real interests but lucking out anyways?

C. Rand

No one would accuse Ayn Rand of being a competent historian or leader of a school of historiography. Unfortunately, she does convey an implicit interpretation of history which lingers in many of those deserting Objectivism for Libertarianism. In her view, similar to the Consensus school but inverted in moral judgment, peaceful productive capitalists were engaged in making everyone well off in the Nineteenth Century, when along came these Progressive collectivists drunk on Statism and high on altruism, to ravish their profits and lay their clammy hands on their activities (strictly between consenting adults). Having absorbed too much altruist collectivism themselves, the capitalists gave up the intellectual battle for their freedom and tried to pragmatically accommodate themselves to the new system, leading them to supporting pragmatist thugs like Nixon’s “plumbers.”

While I certainly would not disagree with the need to straighten out a lot of businessmen philosophically and ethically, Rand’s ignoring (and/or ignorance) of the powerful with vested interest in the State leaves the Objectivist with the tactics of parlor debates and pamphleteering as his only defense against the guns and prisons of the Statists. What frustration the Objectivist must feel hearing that Richard Nixon has read Atlas Shrugged and still has not seen the light! If only David Rockefeller would just listen to him for a minute…

VII. Value of Libertarian Class Theory

Several good reasons have already been suggested in this article for the study and application of libertarian class theory. Understanding the nature of the enemy never hurts in dealing with him. Turning over the Rank of Vested Interest on an issue to expose the Plutocratic worms crawling out from under may turn public pressure on to force the power elite to accommodate the dissent and give up untenable activities. Convincing New Leftists and Birchers that you are, indeed, aware of the problem and you can explain the Ruling Class/Conspiracy even better should aid in recruiting. Fingering the Court Intellectuals as tools of the interests they were supposed to forsake in their supposed search for Truth and Enlightenment could shake-up a few academies and compromise the credibility of these modern Witch-Doctors purveying their sophisticated voodoo.

Murray Rothbard urges the libertarian activist to burn with a passion for justice. If this is our Quest, then Libertarian Class Theory is indispensable to the discovery of those who have visited statism upon us, and whose blood-drenched hands are pocketing the booty.

Old fashioned justice is needed for a new liberty.

[This article first appeared in New Libertarian Notes #28, December 1973.]

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The Anatomy of Escape
Organization Theory