In this post, I continue my brief introduction to left-wing laissez faire economic theory. Let’s get started.
After discussing Benjamin Tucker’s four big monopolies, the next big thing to discuss is that of contemporary mutualist/individualist anarchist – Kevin Carson. I already made use of some of his stuff, but I want to highlight the innovations of Kevin.
Kevin discusses how government subsidies to transportation help big corporate interests ship long distance. This leads to artificially big markets and centralized economic actors. The ensuing concentration of wealth leads to more inequality in the economy. As Kevin puts it:
Spending on transportation and communications networks from general revenues, rather than from taxes and user fees, allows big business to “externalize its costs” on the public, and conceal its true operating expenses.
He goes on to describe the centralizing effect of state built and funded infrastructure:
Every wave of concentration of capital in the United States has followed a publicly subsidized infrastructure system of some sort. The national railroad system, built largely on free or below-cost land donated by the government, was followed by concentration in heavy industry, petrochemicals, and finance.
He also engages in novel thinking about economic value theory. His notion is one of a subjective labor theory of value. An integration of the labor approach to value theory with the Austrian subjective approach. He states:
A producer will continue to bring his goods to market only if he receives a price necessary, in his subjective evaluation, to compensate him for the disutility involved in producing them. And he will be unable to charge a price greater than this necessary amount, for a very long time, if market entry is free and supply is elastic, because competitors will enter the field until price equals the disutility of producing the final increment of the commodity.
Other aspects of this approach to economics worth mentioning includes the effect of regulatory government or the state. The consequences of said regulations tend to involve the creation of oligopolies and monopolies. They remove areas of quality or safety from competition and thus produce standardized “markets” without dynamism. Roy Childs Jr. made use of the New Leftist historian, Gabriel Kolko’s work to drive home this point:
As Gabriel Kolko demonstrates in his masterly The Triumph of Conservatism and in Railroads and Regulation, the dominant trend in the last three decades of the nineteenth century and the first two of the twentieth was not towards increasing centralization, but rather, despite the growing number of mergers and the growth in the overall size of many corporations,
toward growing competition. Competition was unacceptable to many key business and financial leaders, and the merger movement was to a large extent a reflection of voluntary, unsuccessful business efforts to bring irresistible trends under control. … As new competitors sprang up, and as economic power was diffused throughout an expanding nation, it became apparent to many important businessmen that only the national government could [control and stabilize] the economy. … Ironically, contrary to the consensus of historians, it was not the existence of monopoly which caused the federal government to intervene in the economy, but the lack of it.1
Other types of economic interventionism that benefit corporate actors include direct taxpayer funded subsidies or corporate welfare. A report mentioned on Alternet discuses how the Fortune 100 companies have recently received 1.2 trillion dollars in corporate welfare. Economic interventionism also takes the form of the U.S. military forcibly opening up markets for U.S. businesses. This is mistakenly considered a part of “free trade”. It’s also worth mentioning the use of the police or military to break strikes as a form of pro-business interventionism. This was particularly true of the allegedly free market gilded age.
What does all the above say about the primary role of the state or government as an actor within the economy? It supports the idea that the state or the government is the executive committee of an economic ruling class to borrow a phrase from Karl Marx. It may also engage in secondary activities like the provision of social welfare for the poor and unemployed, but the level of support is far below that given to dominant corporate actors which often have a multinational reach. These actions don’t mean the state or government generally genuinely cares about the well-being of the least well off. The primary actions of the state or government serve to concentrate money in gthe hands of a ruling class. The secondary ones attempt to clean up the mess created by the drastic inequality created. That ends our analysis. Until next time!