Free Market Socialism: An Introduction
The following article was written by Nathan Goodman and published on his blog Dissenting LeftistJune 2, 2010.

My good friend Ciaran, who introduced me to the insights of free market libertarianism (Particularly the works of Frederic Bastiat and Ludwig von Mises), expressed his confusion at the notion of free market socialism. As the concepts are typically considered polar opposites, I figured I would offer some glimpses at various strains of free market socialist thought. To avoid the obvious contradiction, let me make clear to all readers that socialism does not here refer to the nationalization of industry, or other forms of government takeover. This is typically what such great free market economists as F.A. Hayek, Ludwig von Mises, and even Frederic Bastiat meant when they said socialism. However, throughout history, socialism has had a broader meaning, which basically boils down to the abolition of the existing capitalist order in favor of a more equitable system without such hallmarks of capitalism as strong class distinctions, boss/employee hierarchies in the workplace, and oligarchic control of the means of production. Throughout the rest of this post, I will give examples of how radical left wing free marketeers have sought to abolish these facets of capitalism while still maintaining libertarian notions of private property rights. Specifically, I will be drawing on the works of the modern individualist anarchists and self proclaimed free market anti-capitalists such as Kevin Carson, Charles Johnson (Often known on the internet as Radgeek), Roderick Long, Sheldon Richman, and Brad Spangler.

First, we’ll discuss a favorite in socialist thought: unions. Unions are typically seen as opponents of the free market by libertarians, and many progressives and supporters of labor see statism as a friend of workers’ rights. There are many objections to these ideas raised by free market anti-capitalists.

The first is that a variety of government restrictions on free association and contract (i.e. free market activity) explicitly restrict the power of labor unions. In his post Free the Unions (and all political prisoners), Radgeek explains:

Too many of my comrades on the Left fall into the trap of taking the Labor Day version of history for granted: modern unions are trumpeted as the main channel for the voice of workers; the institutionalization of the system through the Wagner Act and the National Labor Relations Board in 1935, and the ensuing spike in union membership during the New Deal period, are regarded as one of the great triumphs for workers of the past century.

You may not be surprised to find out that I don’t find this picture of history entirely persuasive. The Wagner Act was the capstone of years of government promotion of conservative, AFL-line unions in order to subvert the organizing efforts of decentralized, uncompromising, radical unions such as the IWW and to avoid the previous year’s tumultuous general strikes in San Francisco, Toledo, and Minneapolis. The labor movement as we know it today was created by government bureaucrats who effectively created a massive subsidy program for conservative unions which followed the AFL and CIO models of organizing—which emphatically did not include general strikes or demands for worker ownership of firms. Once the NRLB-recognized unions had swept over the workforce and co-opted most of the movement for organized labor, the second blow of the one-two punch fell: government benefits always mean government strings attached, and in this case it was the Taft-Hartley Act of 1947, which pulled the activities of the recognized unions firmly into the regulatory grip of the federal government. Both the internal culture of post-Wagner mainstream unions, and the external controls of the federal labor regulatory apparatus, have dramatically hamstrung the labor movement for the past half-century. Union methods are legally restricted to collective bargaining and limited strikes (which cannot legally be expanded to secondary strikes, and which can be, and have been, broken by arbitrary fiat of the President). Union hiring halls are banned. Union resources have been systematically sapped by banning closed shop contracts, and encouraging states to ban union shop contracts—thus forcing unions to represent free-riding employees who do not join them and do not contribute dues. Union demands are effectively constrained to modest (and easily revoked) improvements in wages and conditions. And, since modern unions can do so little to achieve their professed goals, and since their professed goals have been substantially lowered anyway, unionization of the workforce continues its decades-long slide.

Explicit regulation and statist neutering of unions is one thing, but it is also notable that government restricts business competition. This produces what Roderick Long terms an “oligopsonistic labour market,” meaning a market in which there are few employers compared to laborers, and thus bosses have more bargaining power than workers. Sheldon Richman expanded on this point in his article Workers of the World Unite for a Free Market.

In general, any government intervention that makes it harder to start businesses pushes people into the labor market with less bargaining power than they would have in a free market. Less bargaining power for workers means more bargaining power for bosses. So it stands to reason that some percentage of the workforce must put up with lousy job conditions they would reject in a minute if there were a wider array of better opportunities, including self-employment. But there isn’t because the State, with the backing of established businesses, has kept those opportunities from coming into existence—sometimes by outright prohibition, sometimes by “progressive” measures to “protect” consumers and workers. Technology now makes it more feasible for people to work independently, but statutes and ordinances still stand in the way.

It all comes down to the same thing: squelching competition and creating dependence on thusly protected big hierarchical and often authoritarian firms. (Yes, small business gets some State benefits too, but see Roderick Long’s response here. Also see C. L. Dickenson’s “Free Men for Better Job Performance” here and here.)

Concerns about working conditions sound “left wing” but that’s only because libertarians have neglected the issue, without good reason in my view. (It was not always so. Nineteenth-century liberals explicitly appealed to working people and condemned the State-derived power of “capital.”) Too many contemporary libertarians mistakenly think that since sound economic theory tells us that poor working conditions can’t endure in an advanced competitive market, workers have nothing to worry about in a “capitalist” country like the United States. The problem with the argument is that “capitalism” doesn’t equal “free market,” and we haven’t had a free market—not even close. In fact, the economy we live in is far more the product of government-business collusion—going back to the beginning—than economic freedom.

Where the progressives and state socialists go wrong is in thinking that weak worker bargaining power is inherent in the market itself. It is not. It is the result of State privilege. Therefore the solution is not further government intervention, as the progressives want, but repeal of privileges, subsidies, licenses and the rest of the sources of political advantage that protect the well-connected at the expense of the rest of us.

While these state interventions demonstrate that labor interests and genuinely free markets are not enemies, they still leave open the question of whether a free marketeer can in good conscience support labor unions. Some certainly do. For instance, Brad Spangler, after making a point similar to the one above on how the state reduces labor’s bargaining power, wrote on his blog “I urge, and challenge, free-market libertarians to show their solidarity with labor by supporting radical unions such as the Industrial Workers of the World (IWW).” So what’s so great about these radical unions? And can free market libertarians reasonably support unions at all? In his essay The Ethics of Labor Struggle: A Free Market Perspective, Kevin Carson discusses how well various labor tactics fit into libertarian ethics. He begins by responding the common libertarian objection that union effectiveness is based upon forcing worker compliance with strikes.

Vulgar libertarian critiques of organized labor commonly assert that unions depend entirely on force (or the implicit threat of force), backed by the state, against non-union laborers; they assume, in so arguing, that the strike as it is known today has always been the primary method of labor struggle. Any of Thomas DiLorenzo’s articles on the subject at Mises. Org can be taken as a proxy for this ideological tendency. I quote the following as an example:

Historically, the main “weapon” that unions have employed to try to push wages above the levels that employees could get by bargaining for themselves on the free market without a union has been the strike. But in order for the strike to work, and for unions to have any significance at all, some form of coercion or violence must be used to keep competing workers out of the labor market.

This betrays a profound ignorance of the history of the labor movement outside the sterile bubble of the Wagner Act.

First of all, when the strike was chosen as a weapon, it relied more on the threat of imposing costs on the employer than on the forcible exclusion of scabs. You wouldn’t think it so hard for the Misoids to understand that the replacement of a major portion of the workforce, especially when the supply of replacement workers is limited by moral sympathy with the strike, might entail considerable transaction costs and disruption of production. The idiosyncratic knowledge of the existing workforce, the time and cost of bringing replacement workers to an equivalent level of productivity, and the damage short-term disruption of production may do to customer relations, together constitute a rent that invests the threat of walking out with a considerable deterrent value. And the cost and disruption is greatly intensified when the strike is backed by sympathy strikes at other stages of production. Wagner and Taft-Hartley greatly reduced the effectiveness of strikes at individual plants by transforming them into declared wars fought by Queensbury rules, and likewise reduced their effectiveness by prohibiting the coordination of actions across multiple plants or industries. Taft-Hartley’s cooling off periods, in addition, gave employers time to prepare ahead of time for such disruptions and greatly reduced the informational rents embodied in the training of the existing workforce. Were not such restrictions in place, today’s “just-in-time” economy would likely be far more vulnerable to such disruption than that of the 1930s.

Carson continues, discussing the previously noted restrictions on organized labor, and noting free market labor organizing tactics which have been banned.

More importantly, though, unionism was historically less about strikes or excluding non-union workers from the workplace than about what workers did inside the workplace to strengthen their bargaining power against the boss.

The Wagner Act, along with the rest of the corporate liberal legal regime, had as its central goal the redirection of labor resistance away from the successful asymmetric warfare model, toward a formalized, bureaucratic system centered on labor contracts enforced by the state and the union hierarchies. As Karl Hess suggested in a 1976 Playboy interview,

one crucial similarity between those two fascists [Hitler and FDR] is that both successfully destroyed the trade unions. Roosevelt did it by passing exactly the reforms that would ensure the creation of a trade-union bureaucracy. Since F.D.R., the unions have become the protectors of contracts rather than the spearhead of worker demands. And the Roosevelt era brought the “no strike” clause, the notion that your rights are limited by the needs of the state.

The federal labor law regime criminalizes many forms of resistance, like sympathy and boycott strikes up and down the production chain from raw materials to retail, that made the mass and general strikes of the early 1930s so formidable. The Railway Labor Relations Act, which has since been applied to airlines, was specifically designed to prevent transport workers from turning local strikes into general strikes. Taft-Hartley’s cooling off period can be used for similar purposes in other strategic sectors, as demonstrated by Bush’s invocation of it against the longshoremen’s union.

The extent to which state labor policy serves the interests of employers is suggested by the old (pre-Milsted) Libertarian Party Platform, a considerable deviation from the stereotypical libertarian position on organized labor. It expressly called for a repeal, not only of Wagner, but of Taft-Hartley’s prohibitions on sympathy and boycott strikes and of state right-to-work prohibitions on union shop contracts. It also condemned any federal right to impose “cooling off” periods or issue back-to-work orders.

Wagner was originally passed, as Alexis Buss suggests below, because the bosses were begging for a regime of enforceable contract, with the unions as enforcers. To quote Adam Smith, when the state regulates relations between workmen and masters, it usually has the masters for its counselors.

Far from being a labor charter that empowered unions for the first time, FDR’s labor regime had the same practical effect as telling the irregulars of Lexington and Concord “Look, you guys come out from behind those rocks, put on these bright red uniforms, and march in parade ground formation like the Brits, and in return we’ll set up a system of arbitration to guarantee you don’t lose all the time.” Unfortunately, the Wagner regime left organized labor massively vulnerable to liquidation in the event that ruling elites decided they wanted labor to lose all the time, after all. Since the late ’60s, corporate America has moved to exploit the full union-busting potential of Taft-Hartley. And guess what? Labor is prevented by law, for the most part, from abandoning the limits of Wagner and Taft-Hartley and returning to the successful unilateral techniques of the early ’30s.

Carson later notes some tactics which, if these regulations were not in place, could permit organized labor to have immense bargaining power over business, while never using force to stop “scabs” from continuing work.

[I]t certainly was easier to win a strike before Taft-Hartley outlawed secondary and boycott strikes up and down the production chain. The classic CIO strikes of the early ’30s involved multiple steps in the chain–not only production plants, but their suppliers of raw materials, their retail outlets, and the teamsters who moved finished and unfinished goods. They were planned strategically, as a general staff might plan a campaign. Some strikes turned into what amounted to regional general strikes. Even a minority of workers striking, at each step in the chain, can be far more effective than a conventional strike limited to one plant. Even the AFL-CIO’s Sweeney, at one point, half-heartedly suggested that things would be easier if Congress repealed all the labor legislation after Norris-LaGuardia (which took the feds out of the business of issuing injunctions and sending in troops), and let labor and management go at it “mano a mano.”(18)

If nothing else, all of this should demonstrate the sheer nonsensicality of the Misoid idea that strikes are ineffectual unless they involve 100% of the workforce and are backed up by the threat of violence against scabs. Even a sizeable minority of workers walking off the job, if they’re backed up by similar minorities at other stages of the production and distribution process on early CIO lines, could utterly paralyze a company.

Outside of the strike concept, radical unions such as the IWW have supported on the job direct action. Carson writes:

An alternative model of labor struggle, and one much closer to the overall spirit of organized labor before Wagner, would include the kinds of activity mentioned in the old Wobbly pamphlet “How to Fire Your Boss,” and discussed by the I.W.W.’s Alexis Buss in her articles on “minority unionism” for Industrial Worker.

If labor is to return to a pre-Wagner way of doing things, what Buss calls “minority unionism” will be the new organizing principle.

If unionism is to become a movement again, we need to break out of the current model, one that has come to rely on a recipe increasingly difficult to prepare: a majority of workers vote a union in, a contract is bargained. We need to return to the sort of rank-and-file on-the-job agitating that won the 8-hour day and built unions as a vital force….

Minority unionism happens on our own terms, regardless of legal recognition….

U.S. & Canadian labor relations regimes are set up on the premise that you need a majority of workers to have a union, generally government-certified in a worldwide context[;] this is a relatively rare set-up. And even in North America, the notion that a union needs official recognition or majority status to have the right to represent its members is of relatively recent origin, thanks mostly to the choice of business unions to trade rank-and-file strength for legal maintenance of membership guarantees.

The labor movement was not built through majority unionism-it couldn’t have been.

How are we going to get off of this road? We must stop making gaining legal recognition and a contract the point of our organizing….

We have to bring about a situation where the bosses, not the union, want the contract. We need to create situations where bosses will offer us concessions to get our cooperation. Make them beg for it.

As the Wobbly pamphlet “How to Fire Your Boss” argues, the strike in its current business union form, according to NLRB rules, is about the least effective form of action available to organized labor.

The bosses, with their large financial reserves, are better able to withstand a long drawn-out strike than the workers. In many cases, court injunctions will freeze or confiscate the union’s strike funds. And worst of all, a long walk-out only gives the boss a chance to replace striking workers with a scab (replacement) workforce.

Workers are far more effective when they take direct action while still on the job. By deliberately reducing the boss’ profits while continuing to collect wages, you can cripple the boss without giving some scab the opportunity to take your job. Direct action, by definition, means those tactics workers can undertake themselves, without the help of government agencies, union bureaucrats, or high-priced lawyers. Running to the National Labor Relations Board (N.L.R.B.) for help may be appropriate in some cases, but it is NOT a form of direct action.

Thomas DiLorenzo, ironically, said almost the same thing in the article quoted earlier:

It took decades of dwindling union membership (currently 8.2% of the private-sector labor force in the U.S. according to the U.S. Dept. of Labor) to convince union leaders to scale back the strike as their major “weapon” and resort to other tactics. Despite all the efforts at violence and intimidation, the fact remains that striking union members are harmed by lower incomes during strikes, and in many cases have lost their jobs to replacement workers. To these workers, strikes have created heavy financial burdens for little or no gain. Consequently, some unions have now resorted to what they call “in-plant actions,” a euphemism for sabotage.

Damaging the equipment in an oil refinery or slashing the tires of the trucks belonging to a trucking company, for example, is a way for unions to “send a message” to employers that they should give in to union demands, or else. Meanwhile, no unionized employees, including the ones engaged in the acts of sabotage, lose a day’s work.

DiLorenzo is wrong, of course, in limiting on-the-job action solely to physical sabotage of the employer’s property. As we shall see below, an on-the-job struggle over the pace and intensity of work is inherent in the incomplete nature of the employment contract, the impossibility of defining such particulars ahead of time, and the agency costs involved in monitoring performance after the fact. But what is truly comical is DiLorenzo’s ignorance of the role employers and the employers’ state played in establishment unions making the strike a “major ‘weapon'” in the first place.

Instead of conventional strikes, “How to Fire Your Boss” recommends such forms of direct action as the slowdown, the “work to rule” strike, the “good work” strike, selective strikes (brief, unannounced strikes at random intervals), whisteblowing, and sick-ins. These are all ways of raising costs on the job, without giving the boss a chance to hire scabs.

Sabotage and other forms of direct action pose interesting property rights questions for libertarians. Carson’s answer to these questions is as follows:

As I already mentioned, sitdowns and monkey-wrenching would appear at first glance to be obvious transgressions of libertarian principle. Regarding these, I can only say that the morality of trespassing and vandalism against someone else’s property hinges on the just character of their property rights.

Murray Rothbard raised the question, at the height of his attempted alliance with the New Left, of what ought to be done with state property. His answer was quite different from that of today’s vulgar libertarians (“Why, sell it to a giant corporation, of course, on terms most advantageous to the corporation!”). According to Rothbard, since state ownership of property is in principle illegitimate, all property currently “owned” by the government is really unowned. And since the rightful owner of any piece of unowned property is, in keeping with radical Lockean principles, the first person to occupy it and mix his or her labor with it, it follows that government property is rightfully the property of whoever is currently occupying and using it. That means, for example, that state universities are the rightful property of either the students or faculties, and should either be turned into student consumer co-ops, or placed under the control of scholars’ guilds. More provocative still, Rothbard tentatively applied the same principle to the (theatrical gasp) private sector! First he raised the question of nominally “private” universities that got most of their funding from the state, like Columbia. Surely it was only a “private” college “in the most ironic sense.” And therefore, it deserved “a similar fate of virtuous homesteading confiscation.”

But if Columbia University, what of General Dynamics? What of the myriad of corporations which are integral parts of the military-industrial complex, which not only get over half or sometimes virtually all their revenue from the government but also participate in mass murder? What are their credentials to “private” property? Surely less than zero. As eager lobbyists for these contracts and subsidies, as co-founders of the garrison stare, they deserve confiscation and reversion of their property to the genuine private sector as rapidly as possible. To say that their “private” property must be respected is to say that the property stolen by the horsethief and the murderer must be “respected.”

But how then do we go about destatizing the entire mass of government property, as well as the “private property” of General Dynamics? All this needs detailed thought and inquiry on the part of libertarians. One method would be to turn over ownership to the homesteading workers in the particular plants; another to turn over pro-rata ownership to the individual taxpayers. But we must face the fact that it might prove the most practical route to first nationalize the property as a prelude to redistribution. Thus, how could the ownership of General Dynamics be transferred to the deserving taxpayers without first being nationalized enroute? And, further more, even if the government should decide to nationalize General Dynamics–without compensation, of course– per se and not as a prelude to redistribution to the taxpayers, this is not immoral or something to be combated. For it would only mean that one gang of thieves–the government–would be confiscating property from another previously cooperating gang, the corporation that has lived off the government. I do not often agree with John Kenneth Galbraith, but his recent suggestion to nationalize businesses which get more than 75% of their revenue from government, or from the military, has considerable merit. Certainly it does not mean aggression against private property, and, furthermore, we could expect a considerable diminution of zeal from the military-industrial complex if much of the profits were taken out of war and plunder. And besides, it would make the American military machine less efficient, being governmental, and that is surely all to the good. But why stop at 75%? Fifty per cent seems to be a reasonable cutoff point on whether an organization is largely public or largely private.

If corporations that get the bulk of their profits from state intervention are essentially parts of the state, rightfully subject to being treated as the property of the workers actually occupying them, then sitdowns and sabotage should certainly be legitimate means for bringing this about.

As for the other, less extreme tactics, those who object morally to such on-the-job direct action fail to consider the logical implications of a free contract in labor. As Samuel Bowles and Herbert Gintis describe it,

The classical theory of contract implicit in most of neo-classical economics holds that the enforcement of claims is performed by the judicial system at negligible cost to the exchanging parties. We refer to this classical third-party enforcement assumption as exogenous enforcement. Where, by contrast, enforcement of claims arising from an exchange by third parties is infeasible or excessively costly, the exchanging agents must themselves seek to enforce their claims. Endogenous enforcement in labour markets was analysed by Marx–he termed it the extraction of labour from labour power–and has recently become the more or less standard model among microeconomic theorists.

Exogenous enforcement is absent under a variety of quite common conditions: when there is no relevant third party…, when the contested attribute can be measured only imperfectly or at considerable cost (work effort, for example, or the degre of risk assumed by a firm’s management), when the relevant evidence is not admissible in a court of law…[,] when there is no possible means of redress…, or when the nature of the contingencies concerning future states of the world relevant to the exchange precludes writing a fully specified contract.

In such cases the ex post terms of exchange are determined by the structure of the interaction between A and B, and in particular on the strategies A is able to adopt to induce B to provide the desired level of the contested attribute, and the counter strategies available to B….

Consider agent A who purchases a good or service from agent B. We call the exchange contested when B’s good or service possesses an attribute which is valuable to A, is costly for B to provide, yet is not fully specified in an enforceable contract….

An employment relationship is established when, in return for a wage, the worker B agrees to submit to the authority of the employer A for a specified period of time in return for a wage w. While the employer’s promise to pay the wage is legally enforceable, the worker’s promise to bestow an adequate level of effort and care upon the tasks assigned, even if offered, is not. Work is subjectively costly for the worker to provide, valuable to the employer, and costly to measure. The manager-worker relationship is thus a contested exchange.

The very term “adequate effort” is meaningless, aside from whatever way its definition is worked out in practice based on the comparative bargaining power of worker and employer. It’s virtually impossible to design a contract that specifies ahead of time the exact levels of effort and standards of performance for a wage-laborer, and likewise impossible for employers to reliably monitor performance after the fact. Therefore, the workplace is contested terrain, and workers are justified entirely as much as employers in attempting to maximize their own interests within the leeway left by an incomplete contract. How much effort is “normal” to expend is determined by the informal outcome of the social contest within the workplace, given the de facto balance of power at any given time. And that includes slowdowns, “going canny,” and the like. The “normal” effort that an employer is entitled to, when he buys labor-power, is entirely a matter of convention. It’s directly analogous the local cultural standards that would determine the nature of “reasonable expectations,” in a libertarian common law of implied contract. If libertarians like to think of “a fair day’s wage” as an open-ended concept, subject to the employer’s discretion and limited by what he can get away with, they should remember that “a fair day’s work” is equally open-ended.

This may strike some libertarians as a convoluted rationalization of transgressions against property and contract, but it still presents a well thought out and thoroughly libertarian case for direct action by labor.

Interestingly, the previous Kevin Carson passage provides a perfect segue into another area of free market socialist thought. When he discusses how to deal with state property, which to a pure market anarchist is not legitimately owned by the government, he hits on a key element of free market socialism. The market anarchist, such as Murray Rothbard, believes that because governments obtain property either by force or fiat, it is not legitimately owned by them. Thus, privatization should occur. Unfortunately, the typical meaning of privatization in America involves a conservative practice. When the American government “privatizes” something this either means paying a corporation with tax dollars (Which a pure free marketeer considers ill gotten gain) to do something ordinarily done by government, giving government property to a corporation, or selling said property to a corporation. The first is irrelevant to our discussion of government property, and the second two are clearly illegitimate and distort the market, as they effectively amount to giving away or selling stolen goods. So how does one privatize government property? In his essay How and How Not to Desocialize, Rothbard writes:

It would be far better to enshrine the venerable homesteading principle at the base of the new desocialized property system. Or, to revive the old Marxist slogan: “all land to the peasants, all factories to the workers!” This would establish the basic Lockean principle that ownership of owned property is to be acquired by “mixing one’s labor with the soil” or with other unowned resources.

Desocialization is a process of depriving the government of its existing “ownership” or control, and devolving it upon private individuals. In a sense, abolishing government ownership of assets puts them immediately and implicitly into an unowned status, out of which previous homesteading can quickly convert them into private ownership. The homestead principle asserts that these assets are to devolve, not upon the general abstract public as in the handout principle, but upon those who have actually worked upon these resources: that is, their respective workers, peasants, and managers. Of course, these rights are to be genuinely private; that is, land to individual peasants, while capital goods or factories go to workers in the form of private, negotiable shares. Ownership is not to be granted to collectives or cooperatives or workers or peasants holistically, which would only bring back the ills of socialism in a decentralized and chaotic syndicalist form.

There is a reasonable libertarian case to be made for not giving the property to a co-op or collective initially as the form of privatization. However, who is to say that if given control over a factory, the workers would not want to implement a cooperative themselves with their individual shares? As they homesteaded it, this would be their right within a genuinely free market. Radgeek advocates for this and related market socialist forms of privatization (Which he argues could be reasonably be termed “socialization”) here and here.

Another issue which tends to separate advocates of pure free markets from socialists is the matter of public property. One common market anarchist view is that in a free market, all property would be privately rather than publicly owned, and thus tightly controlled by the owner. While this would deal with the tragedy of the commons quite nicely, it would also likely decrease options available to the poor, and freedom of movement for everyone. However, public does not imply government owned, and thus there is room in a free market society for public ownership. In 1996 Roderick Long wrote a piece titled In Defense of Public Property, which deals with the issue well. On the matter of whether public property fits libertarian theories of property rights, Long argues

On the libertarian view, we have a right to the fruit of our labor, and we also have a right to what people freely give us. Public property can arise in both these ways.

Consider a village near a lake. It is common for the villagers to walk down to the lake to go fishing. In the early days of the community it’s hard to get to the lake because of all the bushes and fallen branches in the way. But over time, the way is cleared and a path forms — not through any centrally coordinated effort, but simply as a result of all the individuals walking that way day after day.

The cleared path is the product of labor — not any individual’s labor, but all of them together. If one villager decided to take advantage of the now-created path by setting up a gate and charging tolls, he would be violating the collective property right that the villagers together have earned.

Public property can also be the product of gift. In 19th-century England, it was common for roads to be built privately and then donated to the public for free use. This was done not out of altruism but because the roadbuilders owned land and businesses alongside the site of the new road, and they knew that having a road there would increase the value of their land and attract more customers to their businesses. Thus, the unorganized public can legitimately come to own land, both through original acquisition (the mixing of labor) and through voluntary transfer.

This provides a fairly clear route for a socialistic manner for eliminating government ownership of places like parks, which have been homesteaded by the public at large.

Ultimately, it’s important to remember that even if you don’t think that roughly socialist economic relations are beneficial, in a libertarian society they may coexist with capitalist relations. Wendy McElroy, no anti-capitalist, explained this quite eloquently in her blog post Capitalism v. The Free Market.

At the risk of being misunderstood, I am not a capitalist. Instead, I advocate the free market. Capitalism is a specific economic arrangement with reference to the ownership of property and capital. It happens to be the arrangement I prefer because I believe it is more just, a far better reflection of reality and produces more prosperity than the alternatives. But I wouldn’t crusade for capitalism the way I would crusade for freedom of speech. What I would crusade for is a free market in which individuals exchange or co-operate with each other according to their own choices.

What’s the difference? Consider: I live near an old-fashioned Mennonite community that organizes its economic life along socialist ideals rather than capitalist ones. The community is absolutely voluntary – that is, it results from the free choices of individuals. In a free market, my neighbors can peacefully disagree with my assessment of capitalism and set up whatever voluntary alternative appeals to them…for whatever reason it appeals to them (e.g. religion). My approval of their non-capitalist lifestyle is not necessary until or unless they attempt to make me adopt their preference. That’s the free market: everyone peacefully pursues whichever economic goals they wish by whatever means is voluntary. If your chosen means is not capitalism and you don’t want my advice…then I wish you well… even though I doubt you will succeed in the way I define ‘success.’ Nevertheless I feel no urge to knock on your door as an evangelist for capitalism who is determined to demonstrate the error of your ways.

I think it would be fitting to close with a video series of Gary Chartier explaining why “advocates of freed markets should oppose capitalism.” A written version of the same general arguments is available here.

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory