Laurance Labadie’s “Critical Comment on Social Credit” & “Extracts from Labadie”

Critical Comment on Social Credit

I studied your article in “New Democracy” carefully and liked some things you said in it. Some things annoyed me tho. You speak of certain demands on the government. This surprises me. In my estimation, no one who understands liberty demands from government. For example, suppose we demand justice from it. How can government confer justice when by its very nature, being based on injustice, it has no justice to give? Can government confer a “Just Price” or do all the wonderful things demanded of it in these depressing days? You do not demand free speech from government, you exercise your rights to it whether the government wants you to or not. Those who, like the “Herald of Cooperation”, which by the way has some fine articles in it, talk of liberty and government as nearly synonymous simply do not know what they are talking about. I am not talking as an academition of the anarchist school but as a pure matter of fact. While an anarchist does not necessarily expect to abolish government overnight, he purely must be interested in what direction things are going. And to expect anything from conniving nitwits in Washington or even imply that they have the ability to ameliorate the very thing they have caused seems to be the essence of credulity. Government is, by the nature of the arbitrary decrees it is permitted to enact, impotent. It is an institution that the ignorance of people protects from its folly, inefficiency, and fraud. It does not have to pay like a freely competitive institution, directly or immediately for these because it can command patronage. Therefore it is a curse upon the people under its control. “There is nothing that a government does for the people that they could not do for themselves if there were no government.” Viewed in this light any cooperation with it that does not consist in diminishing its power is pernicious. . . .

Some men seem to think that the expression “eternal vigilance is the price of liberty” means to watch the government. It is like saying: Put a tiger in the nursery but watch the tiger. If one-tenth of the effort necessary to do this was put to kicking the tiger out of the nursery it would be inestimably more effective and intelligent. Government, the tiger, is impotent for good.

Extracts from Labadie

One of my objections to any form of governmental banking is that the process of putting it over politically is expensive and slow while mutual bank of issue can be put into existence immediately by those who subscribe to its idea and I predict that if several are inaugurated their advantages will be so manifest that subscribers will come to them and in this way we will put the interest-taking variety out of existence by the simple process of beating them in a competitive field. But this cannot be done as long as many people still have faith in the king thing as being a means for their salvation… Now as to your subscribing to Social Credit. I have been cataloging my father’s correspondence of the last 40 to 50 years. If you could see the many unfulfilled hopes contended . . free silver, single tax, municipal ownership, socialism, and whatnot, many of them subscribed to by libertarians and near-anarchists, AND NEARLY ALL ADHERED TO WITH THE VERY SAME REASON YOU GIVE FOR SUBSCRIBING TO SOCIAL CREDIT (that it is something better anyway), you might conclude that we cannot expect much anyway and that if they had not been sidetracked by false ideas of expediency and had stuck to the real thing all along we might have been a lot farther on than we are today… Jo’s statement that she is not particularly interested in economic material in a clear and understandable manner, to make it interesting and to show ITS IMMEDIATE AND IMPORTANT EFFECTS ON THE BEARING OF NEARLY EVERY DETAIL OF OUR LIVES. One would not ordinarily think of any connection between a money system and love, for example, but you know John that a woman’s “right” to love freely, that is to love the object of her heart’s desire, isn’t worth much unless she is economically independent of men. Even to be economically dependent on the one one loves isn’t quite congenial to a love undefiled by mercenary feelings… There is a grim and sardonic humor in the fact that in the long run people get just [what] they deserve. Marxians say that people think the way they do because of economic conditions. Idealists say that people have these conditions because of the way they think. And this futile and useless argument goes on and on. I am inclined to think that thought is the thing that makes progress. But conditions do not necessarily make people think [1] . It may make some think, but not many. Masses don’t think. If they did we would not be where we are today. This is why I do not believe in mass movements.

  1. “Thing” seemingly mistakenly written as “think.”

Commentary – Eric Fleischmann

Published as two separate but related pieces in 1934 by John G. Scott and Jo Ann Wheeler (the Jo and John mentioned in the above piece) in the second anarchist periodical with the name Mother Earth and preserved in the Joseph A. Labadie Collection of the University of Michigan Library, the identity of the contributor to New Democracy that Labadie is writing to in this newest part of the Laurance Labadie Archival Project is not completely clear—though it appears to be Scott. However, the strategy of Social Credit that said author apparently wrote of is identifiable, with Kevin Carson describing it as “a proposal to remedy corporate capitalism’s chronic tendency toward overinvestment and overproduction by periodically depositing a sum of interest-free new money, equivalent in aggregate to the demand shortfall, in the citizenry’s bank accounts.” And so Labadie uses this space to–among other things such as his usual focus on money—broach the topic of how to approach utilizing government for anarchistic purposes. Of course, Labadie, as an anarchist, believes in ending all government, but he brings up the point that “an anarchist does not necessarily expect to abolish government overnight and that there can be “cooperation with it” as long as it consists of “diminishing its power.” But at the same time he points out that if earlier anarchists and libertarian socialists “had not been sidetracked by false ideas of expediency and had stuck to the real thing all along we might have been a lot farther on than we are today.”

For Labadie’s intellectual ancestor Pierre-Joseph Proudhon, a (failed) run for the French Constituent Assembly in 1848, a subsequent (successful) run in the complementary elections, and an attempt to establish an interest-free Bank of the People through taxes levied on the rich made perfect sense to reduce the power of both the state and capitalists and increase the power of workers. And while Labadie—still an opponent of interest—is opposed to “any form of governmental banking” and very pessimistic toward any appeals to state power, this mutualist reformism has been inherited by some of Labadie’s intellectual descendents like Carson, who argues that anarchist “involvement in politics should take the form of pressure groups and lobbying, to subject the state to as much pressure as possible from the outside” and speaks highly of decentralist and democratic but still governmental strategies like open-source governance and participatory budgeting and advocates  a land value tax (“single tax”) “as a transitional measure.” These resemble the “free silver, single tax, municipal ownership, socialism, and whatnot” written of by the elder Labadie and his contemporaries in their content as well that they are “something better anyway” and moving in an anti-statist “direction.”

What arises from thinking such as this is a question of what model of state power reduction is one operating under. Murray Rothbard, for example, argues that the state “abolitionist is a ‘button pusher’ who would blister his thumb pushing a button that would abolish the State immediately, if such a button existed.” Therefore, “[t]he radical — whether he be anarchist or laissez-faire — cannot think in such terms as, e.g., ‘Well, the first year, we’ll cut the income tax by 2 percent, abolish the ICC, and cut the minimum wage; the second year we’ll abolish the minimum wage, cut the income tax by another 2 percent, and reduce welfare payments by 3 percent, etc.’ The radical cannot think in such terms, because the radical regards the State as our mortal enemy, which must be hacked away at wherever and whenever we can.” In contrast, many libertarians on the left utilize Chris Matthew Sciabarra’s theory of dialectical libertarianism, which holds that one should “grasp the nature of a part by viewing it systemically–that is, as an extension of the system within which it is embedded.” For Carson, this analysis means “that [because] the corporate economy is so closely bound up with the power of the state, . . . it makes more sense to think of the corporate ruling class as a component of the state.” And as such, “it doesn’t make much sense to consider particular proposals for deregulating or cutting taxes, without regard to the role the taxes and regulations play in the overall structure of state capitalism” and the strategy employed by libertarians should be to “first . . . dismantle the fundamental, structural forms of state intervention whose primary effect is to enable exploitation; and only then to dismantle the secondary, ameliorative forms of intervention which serve to make life bearable for the average person living under a system of state-enabled exploitation.” From what I can tell, Labadie seems to be somewhere between these two views.

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