“Austerity” in Practice

“The Italian senate,” reports BBC News, “has adopted a package of austerity measures designed to avoid a bailout of the eurozone’s third largest economy.” The story observes that a “technocrat government,” now the subject of debate, may be necessary to “bring the country’s finances under control,” implying that all any economy needs to function properly is a few twists and tweaks from powerful experts.

Just as the institutional frameworks of the state demand that the laboring classes subsidize the corporate economy, so do the sacrifices of “austerity” fall unevenly on the poor. Rather than representing prudent and forbearing policies of real frugality, Europe’s austerity measures merely mean that those who benefited from the excesses of the state-distorted economy can now make us pay for their crises.

It’s important to bear in mind, though, that none of the economic situation enfolding Europe today has anything at all to do with the free market that left-libertarians advocate. Though they have been conflated by the beneficiaries of privilege, true free markets and actually existing capitalism are not at all based upon the same operating principles.

In a free society, one without a state to coercively offload the power elite’s costs onto workers, each individual would be charged with internalizing her own costs. American individualist Josiah Warren called this kind of a system (that is, a genuine free market) “Equitable Commerce,” adding that “[i]t leaves every one in undisturbed possession of his or her natural and proper sovereignty over its own person, time, property and responsibilities.”

Pervasive, systematic bargaining power inequalities can, in the long run, only be maintained through force, confining exchange relationships to the advantage of a tiny minority. When individuals have few or no options outside of those officially approved and authorized by the reigning economic power blocs — when competition is made illegal — corporate and government elites are able to charge fees on all productive activity.

In due course, the debarment of real, substantive economic freedom corresponds with a disproportionate accrual of resources in wasteful, inefficient processes. And why wouldn’t it? With neither the calibration imparted by the free shifting of resources, nor the discipline of a theft- and subsidy-free economy, the powerful players can swell to “Too Big to Fail.”

Its nerve endings dulled by the distorting final results of state intervention, the corporate capitalist model is constantly carrying itself over a cliff. Such a mode can never “work,” can never function in anything like a logical, cost-effective way, because it necessarily disconnects reward from labor.

Rather than drawing still more out of those who were forced to underwrite the wastes of the status quo economy, Italy — and the world — ought to, in Kevin Carson’s phrasing, pull away “the statist props of capitalist privilege.”

Doing so would mean a true free market, simply economies made up of consensual relationships instead of sustained invasions against the individual. Free from the exploitation of institutions beyond their control, society and community would at last become sources of vitality and creativity in the world.

“Austerity” is a lie: There will be none of it for the ruling classes of Europe. Rejecting caricatures of increasingly vital ideas, Italians and Europeans generally should consider market anarchism as a comprehensive manifestation of fundamental ideas about fairness and economic justice.

Citations to this article:

Free Markets & Capitalism?
Markets Not Capitalism
Organization Theory
Conscience of an Anarchist