Having been called a techno-utopian for previously celebrating The Pirate Bay, Wikileaks, encrypted currencies and darknets, and given my recent gushing over Bitcoin, I feel I should say something about the Bitcoin crash.

Mt. Gox, the largest currency exchange on which Bitcoin can be exchanged for U.S. dollars (and vice versa), was hacked June 20 by someone who dumped a lot of Bitcoins for extremely low prices and caused the market to crash.  The price of Bitcoins—which had been $1 in May—briefly plunged from $30 to a penny, before rising quickly to $14 and then regaining most of their previous value.

The period immediately after the crash saw considerable speculation as to whether Bitcoin was done for, or at least whether the Bitcoin bubble had popped.  For now it seems to be more or less back to normal and regained most of its lost ground, and speculations on its demise have moderated.  But questions of its long-term viability won’t go away so easily.

Analyst Doug Casey (Casey Research, June 22)  commented that while Bitcoin itself probably wasn’t the ultimate answer, “Bitcoin is a beta version of what’s coming in the post-dollar world….”

Of course Bitcoin itself is probably not yet finished.  In the short run, Mt. Gox is rapidly losing its 90% market share in Bitcoin trading and people are spreading the risk more evenly in a number of different exchanges.  And Bitcoin, to repeat, seems to have recovered from the crash.  But it still has vulnerabilities and shortcomings.

Center for a Stateless Society Media Director Thomas Knapp commented that the real problem is not Bitcoin itself—which is rather secure—but its interfaces with markets like currency exchanges and  the actual vendors of goods and services.  He speculated that “others are even now working on something that’s more ‘end-to-end’ secure, and that will probably eclipse Bitcoin at some point.”

In the long run, though, I question whether Bitcoin serves all the functions needed from an encrypted digital currency.  Long-distance exchange between members of different trust networks will no doubt need a currency which serves as a secure store of past value, like Bitcoin or e-gold.

But the primary need is not for a store of value, but a medium of exchange between providers of present and future goods and services—especially in circumstances where such providers have only their goods and services to exchange, with no money on hand, and need a source of liquidity.  In short, we need something like an encrypted digital version of Thomas Greco’s mutual credit clearing system.

If you’re an unemployed or underemployed person in the West, or a farmer or small producer in the informal economy of a developing country, I can’t stress the value of Greco’s ideas enough.   In his system, currency isn’t a store of past value.  Its “backing” comes from the value of the goods and services exchanged.  Sellers create value by the act of exchange.  The currency’s just a unit of measure for denominating the exchange and tracking the participants’ account balances.

Market anarchist Karl Hess once commented on how nonsensical it was to complain that local economies were stagnant because “there’s no money,” when some people had productive skills and services to provide, and others needed them.  It was like complaining there were “no inches.”

In Greco’s system, everyone runs a balance like a checking account.  When you sell a good or service to someone, your balance rises by the value of that good or service.  And when you buy something, your balance goes down.  The system allows people to run negative balances up to some value—perhaps a month’s average turnover for a participant—so long as the account keeps turning over.  So people with skills and tools are able to create value and exchange their services for the things they need—even if there is “no money.”  They create their own money by the acts of production and exchange.

The implications are revolutionary.  Throughout history, privileged classes have extracted rents—with  help from the state—by monopolizing the media of exchange and credit.  When people can create their own money and credit in encrypted darknet economies, bypassing the state and the banksters, they can cut off the flow of tribute to the rentier classes.

LulzSec hackers have released a government report entitled “Anarchist Movement.” This “strategic report” was marked for official use only and was issued by the Missouri Information Analysis Center, a government organ that has previously drawn criticism for warning cops to be suspicious of things like Ron Paul bumper stickers. MIAC is one of several fusion centers, organizations intended to facilitate the sharing of information gathered about people in America between federal, state, and local government agencies.

I was curious to see what law enforcers would have to say about anarchists. While some of the information in the report is factually correct, the quality of the research is not impressive.

The report puzzled me with the first sub-category of anarchism it listed. While I’ve heard of many obscure isms, never have I read about “Anarcha-Masculinism.” Obviously, the wording is framed as a counterpart to anarcha-feminism, a term which is widely used, but how many people indentify as Anarcha-Masculinist? A Google search of the term brings few results besides a small page of the website Anarchopedia, a Wikipedia-type website with a particular anarchist bent. As it turns out, the MIAC report’s description of Anarcha-Masculinist is almost identical to the text found on Anarchopedia. The descriptions of other anarchist sub-categories are also directly lifted from text at various Anarchopedia pages.

The report concludes that “we believe the groups discussed pose a significant domestic terrorist threat at this time.” This means that people are being paid with tax money to plagiarize websites and label people domestic terrorist threats. Lifting text from websites and putting it into a report with little evidence of analysis and no citations does not count as research. Perhaps we should be frightened that this is the haphazard process by which people are officially designated terrorist threats.

The MIAC report also shows its lack of scope by its neglect of market anarchism, not saying anything whatsoever about how to categorize market anarchists. Radicals who have held that monetary exchange and individual possession could be non-exploitative go back to New Harmony participant Josiah Warren and abolitionist Lysander Spooner, and the self-identified anarchists they inspired. While those who fall under the label “market anarchist” are hardly a homogenous group, they generally challenge the authority of states and other elites mainly by creating alternative social relations and advocating for the expansion of non-coercive relations. Presumably, if they can be placed under the banner of Anarchist Movement, they’re all terrorists.

Ironically, the MIAC report also does not mention anarchist hackers or other techno-anarchist tendencies. Few projects have pulled back the veil of the state’s apparatus of terror more effectively than computer activists, whether they are affiliated with LulzSec or WikiLeaks.

The MIAC report is aimed solely for the consumption of the law enforcers who explicitly operate by terrorizing their opponents – whether by aggressive behavior, swat teams, mobile electrocution torture devices, overwhelming force, threats of jail, or simply shooting them. It is terrorism that people have a right to resist, though of course mindful of potential consequences. Exposing the bankruptcy of the authorities is a valuable step in creating a world where they are much less able to harm other people. Lulz are best had at the expense of oppressors.

President Obama, CNN reports, is on the road touting his administration’s “critical investments in the country’s long-term development,” trumpeting a desire to see the products of the future “bear the proud stamp that says ‘Made in America.’” Meanwhile, the President’s agenda for the week also includes meetings with congressional leaders to discuss the possibility of raising the debt ceiling.

While the connection between ballooning government debt and attempts at invigorating American Big Business may not be immediately obvious, the two are very intimately joined. Quite contrary to a free market untouched and unaltered by state intervention, the American economy has been appreciably permuted by government involvement in every area.

Given how heavily the state is invested in business (with our stolen dollars), it would be misleading to say that the government is not itself actively engaged in commercial activities. In 2010 alone, for example, the federal government spent more than $150 billion on research and development, only to turn around and grant monopoly patent privileges to the rich companies whose new inventions we taxpayers footed the bill for.

So when the President starts talking about “investing in development,” that’s thinly veiled code for privatizing the profits of the common man’s funding of some of the biggest companies in the world. The political class can call that whatever they’d like, but it’s not the sort of free market that market anarchists advocate for.

The unmistakable truth about the state is that it can’t stop spending money it doesn’t have. In order to survive in spite of the structural instability of its economic system it must continue to spend. Taken as a whole, the state capitalist model operates in a constant state of loss. Because it is incapable, in the aggregate, of producing things that consumers want, it must seize and deplete ever more resources in order to carry on the illusion of balance.

As Kevin Carson notes, the state’s economic system, with its subsidies to elephantine corporations and its pattern of waste, “equates consumption of inputs to creation of value.” Absent state intervention to make many of those “inputs” — which account for the present day corporation’s major costs — available at a discount, it would be impossible to remain “in the black.”

The state is primarily a class instrument designed to interfere with the process of voluntary exchange in order to allow elite commercial interests profits that a free market would not. This means, however, that state expenditures must go on bankrolling, through a medley of corporate welfare categories, the expenses of Big Business.

Could we remove both government sponsorship (direct and indirect) and government barriers that empower corporate cartels, the towering structures of the global economy would collapse under their own weight. They are therefore very similar in their functioning and in their economics to the state-owned and -operated pure monopolies that libertarians so steadfastly denounce.

Just as state agencies have no incentive to stay under budget and indeed have every incentive to exceed it, so too do state-protected firms have every reason to dissipate resources. The free market actually does engender all of the discipline and productive efficiency that libertarians say it does, but the statist, corporatist American system is not a free market.

A free market is a system of voluntary exchange where everyone carries her own costs. With the state interrupting that process and stealing from the poor to give to the rich, we get what we have today. If that’s what investing in the American economy looks like, count me out.

This week at The Christian Science Monitor, Dr. Jeff Cornwall, a Belmont University business professor, discussed a new American Express poll, which found “that 81 percent of Americans say that small businesses place a greater emphasis on service than large companies do.” The “Customer Service Barometer” that AmEx conducted found that generally small businesses are outcompeting their mountainous, multinational counterparts, and for all of the reasons we might expect.

Big Business has a tin ear for customer feedback, a result of lifeless, bureaucratic hierarchies that make effective communication impossible — or nearly so. But if Big Business is so completely obtuse next to its smarter and more dexterous competitors, why are the big guys continuing to grow at the expense of the “mom and pop” store of our Norman Rockwell dreams?

That’s easy enough: The state shelters Big Business from competition at every opportunity, lavishing it with special advantages that the little guy can’t reach.

It is striking that so many Americans readily assume that the institutional culture of government is anti-Big Business, especially in light of how often the revolving door between the “public” and “private” sectors is noted. The prevailing account would have us forget that Washington, DC’s grandees are frequently the same people who sit on the boards of some of the country’s most powerful corporations.

Apparently ruthless, avaricious capitalists in the latter posts, we’re taught that they transform quite promptly, upon assuming public office, into altruistic custodians of the commonweal. Notwithstanding the ahistorical image of the state as a check on commercial power, though, members of the ruling class do not recognize the public/private breach as they cross it.

When shifting back and forth among their capacities as “public servants” and corporate directors, elites retain their worldviews and assumptions about what works and the way society ought to look. It stands to reason, then, that the state should act obligingly toward Big Business, and that accordingly Big Business should be amenable when the time comes to, say, spy on citizens.

None of this should be taken to suggest that some shadowy group is actively and deliberately conspiring to enslave us to the corporate state. Although that has indeed been the result, no purposive scheming has been necessary to effect it — to allow elites to tamper with the economic order for their benefit.

It shouldn’t surprise us that people who proceeded through the same educational and workplace hierarchies, absorbing the same dogmas, would share the same managerialist ethic. Neither should we be astonished that so many of the liberal reforms putatively aimed at constraining business have in fact empowered business and cultivated monopolies.

“False consciousness of the nature of American liberalism,” wrote James Weinstein, “has been one of the most powerful ideological weapons that American capitalism has had in maintaining its hegemony.” Americans who unwarily give credence to the version of history that casts the progressive state as working at cross purposes to Big Business interests play into the hands of both.

Today’s monopolists are perfectly situated to take advantage of the fiction that the omnipotent state is the last bulwark against corporate domination. Each time a new law or implementing regulation is instituted — in a process in which business lobbyists are most intimately involved — the corporate media waxes lyrical about “the common good.” The established cartels walk away with even more market power, and we all thank goodness that Congress and the federal government’s alphabet soup agencies are there to protect us.

Market anarchism would turn economic life over to the voluntary exchanges of individuals left free from coercion. Without special favors and unfair head starts, commerce would be the nimble mechanism it ought to be. Rather than increasing their power and influence, true free markets liberate us from slow, stupid corporations.

“New York,” reports BBC News, “has become the sixth and most populous US state to allow same-sex marriage.” After the bill passed the New York legislature, the state’s Governor Andrew Cuomo made the bill law with his signature, prompting local Catholic bishops to describe the law as an attempt to “redefine [the] cornerstones of civilization.”

New York’s new law reignites the contentious issue of same-sex marriage, providing an occasion to reconsider some of the arguments of both sides. Since the application of the market anarchist prohibition against the use of force may seem to be difficult on this issue, it’s necessary to heed practical nuances of what “gay marriage” actually means.

Though there’s significant overlap between them, the two spheres and denotations of “marriage” have always remained discrete as within society. Even before gay marriage was “legalized,” warranting recognition from the state, individual churches, for example, went ahead and settled upon their own practices regarding who could be joined in holy matrimony.

In many ways, then, the controversy over gay marriage in the United States has never been about marriage in and of itself, about whether or not extra-governmental social groups like churches would be allowed to marry same-sex couples. To the extent that the critiques of same-sex marriage fall short of urging for the illegality of strictly religious or social practices, their worries about the “undermining marriage and the family” are red herrings.

No one anywhere close to the mainstream of the debate suggests that something like a commitment ceremony, existing outside the purview of the state, ought to be outlawed. The controversy therefore isn’t so much about marriage — at least not in any holistic sense — as it is about a certain very specific set of legal rights granted by the state.

When considering the issue, we must take great care to preserve in our arguments the distinction between spiritual or religious senses of marriage and “civil marriage,” the important legal benefits that emanate from a marriage license. As a matter of principle, market anarchists would like to free marriage altogether from the coercive clutches of the state, to erase the entire arbitrary, state-created legal framework around wedlock.

Autonomous adults ought to be able to marry or not marry whomever they choose and to enter into whatever kinds of consensual relationships they’re inclined toward without the state acting as referee. A question thus arises as to why a market anarchist would advocate for gay marriage instead of against state involvement.

But the two positions aren’t mutually exclusive, and, given the special benefits allowed to married couples, notions of legal fairness — i.e., fairness under the law — require the extension of civil marriage to gays.

Ideally, of course, society wouldn’t exist inside of a scaffolding of special privilege that completely weaves marriage into every layer of rules about things like taxes, property and health care rights. Insofar as society does occupy such a scheme, however, philosophical anarchism does not demand that homosexuals be relegated to second-class citizens. While I have no use for the Constitution or its Equal Protection Clause, a stateless society built on voluntary exchange and cooperation would be, by definition, a society founded on the moral principle of equality.

As long as the state is issuing legal instruments that entitle their holders to a host of very valuable legal protections and perks, it’s untenable to suggest that gays ought to be denied those rights on the basis of the claim that no one should be accorded them. Market anarchists don’t ignore the subtlety of the question before us by insisting that any lengthening of the state’s reach falls on the wrong side of a bright line rule.

Even assuming that we did insist on such a rule, it isn’t at all clear that denying gays the right to a civil marriage isn’t more statist in that it unfairly encumbers gays with what are actually legal handicaps. The State of New York deserves no applause or adulation for what has done. Though the state treats it as such, basic human dignity is something we’re born with, not something that rulers give us.

Dear C4SS supporters,

This week, I’ve submitted 9,278 Center op-eds to 2,819 publications, and have five “pickups” to report so far:

• Darian Worden’s “Putting the Nation Before the Human” appeared in the Deming, New Mexico Headlight on June 17.
• David D’Amato’s “The Fleecing of Greece” ran in the Tehran, Iran Times on June 20 and in the Dhaka, Bangladesh New Age on June 23.
• Kevin Carson’s “Our Corporate Military” appeared in Counterpunch today, June 24.
• Carson’s “The State is Insane” appears in the Dhaka, Bangladesh New Nation tomorrow, June 25.

Random reciprocal blogospheric link love: Cop Block, The Postmodern Tribune, and MarkGanzersInsanityBlog.

I try not to bring up fundraising every week in this report, but now seems as good a time as any, what with several Center personnel “in the field” at Porcfest in New Hampshire, etc. I just got paid for the first half of February, and have made my usual donation of $100 per month ($50 in this case, pro rata) back to the Center. If you’re the matching type, feel free to match. Or if it inspires you to contribute 1/10th as much, or ten times as much, that’s great too.

Have a great weekend!

Yours in liberty,
Tom Knapp
Media Coordinator
Center for a Stateless Society

Fox News Latino reports that “Mexican President Felipe Calderon and a prominent poet … [have] agreed to create a tracking commission to work on the proposals presented Thursday by victims of violence.” Meanwhile, as drug violence continues to rage in Mexico, authorities in Rio de Janeiro, Brazil are claiming a small victory over drug-dealers in that city, boasting that they’ve killed eight suspected traffickers.

The American daily news cycle is saturated with stories about the War on Drugs, a ceaseless campaign apparently carried out to end the drug trade. While most people probably consider this to be, if nothing else, a worthy goal, they may also harbor a vague, sneaking suspicion that something is amiss.

If they do have such a hunch, then they’re right. The state’s interaction with the global drug trade is a perfectly representative example of the interwoven systems of violent power that culminate in mass death and injustice for ordinary people. By criminalizing drugs — deciding what an adult can put into her own body — the state has immersed the country and the world in a cycle of violence that has very little, if anything at all, to do with actually preventing people from using drugs.

Rather than regarding the regular bloodshed around drugs strictly as an unintended consequence, market anarchists would explain it in terms of the economic motivations of the ruling class. Where market anarchism is based on mutually-consensual trade and nonaggression, the public policy framework around illegal drugs reflects all of the problems with allowing a small group to make decisions for everyone.

The War on Drugs is, like the War on Terror, so utterly void of any clear or accessible definition that it can be cited to allow fathomless expansions of the corporatist police state. It isn’t that the War on Drugs can’t accurately be designated a war, but that it is a war on human beings with a modus operandi that only enhances the noxious power of drugs in society.

Just as the War on Terror, with its prying military imperialism, functions to galvanize potential terrorists, the War on Drugs makes cocaine and marijuana, for example, far more expensive than they would otherwise be. The result is to hand a quasi-monopoly to networks of murderous thugs who want nothing more than an ironclad legal framework for prohibition, stringent drug laws to consolidate profits in a few cartels.

Like everything else that comes into contact with the state’s coercive power, if you follow the money, you soon find a symbiotic interplay of commanding interests using that power to make a killing at our expense. When we begin to consider the political economies of the Drug War, the reasons that it survives in spite of its apparent failures become rather more clear.

All of the supposedly respectable actors we’re taught to regard as “legitimate” — big corporations and banks, law enforcement, etc. — are in fact an integral part of the whole drug racket. As former undercover federal agent Michael Levine has noted, “CIA banking operations were used to launder drug money,” with the Agency and the State Department “protecting more and more politically powerful drug traffickers” — and all so that American intelligence could engage in a worldwide game of Stratego with taxpayer money.

Coincident with domestic crackdowns from reinforced, militarized police departments in cities all over the U.S., the CIA oversaw a system of patronage whereby they would look the other way while drugs flooded the same cities. So long as the political factions that the U.S. supported were ready and willing to undertake what William Avilés has called “integration … into a larger transnational order,” the federal government was just as willing to keep things quiet.

All of that tough talk about prosecuting money launderers and drug-dealers is thus reserved for the very marginal figure of the neighborhood dope man; and that fact, in turn, makes America’s gargantuan prison companies quite happy indeed, their cages overfull with new captives who made the mistake of doing something the ruling class does with impunity — on a much smaller scale.

Market anarchists would leave adults free to do as they wish as long as they leave everyone else free to do the same. Drug use will always be a problem for society to confront, but without the state’s meddlesome prohibition we would be spared so much of the fascism and imperialism at home and abroad, respectively, that we’ve come to expect.

“President Barack Obama,” reports CNN, “is expected to announce this week that 30,000 U.S. ‘surge’ forces will be fully withdrawn from Afghanistan by the end of 2012.” As the latest installment of the Afghanistan “timetable” chronicles, the President’s speech can be expected to include all of the standard doublespeak bromides about “shifting responsibility” and “achieving our mission.”

Despite all of the White House’s solemn talk of drawdowns and “sustainability here at home,” the changes we’re supposed to regard as big news take place on the narrowest margins of United States foreign policy. Way out on the periphery of the neocolonialist agenda, a negligible tweak here or there is quite acceptable to the state capitalist elite, for whom there is never a real danger.

Policy shifts — even personnel changes — occur within a framework where the underlying assumptions of empire are taken for granted, and where an entire economy has been built upon what Dwight Eisenhower famously dubbed the “military-industrial complex.” For the power elites who formulate foreign affairs, whether Democrat or Republican, “liberal” or “conservative,” the war industry itself — the economic engine driving our endless wars — is as American as apple pie.

Indeed, most of the supposedly “progressive” members of Congress wouldn’t dare question the massive government contracts for the latest killing machines, or the subsidies to research and development necessary for refining those death-dealing gadgets. “Even the radicals,” observed Anthony Gregory, “sometimes mistake neo-mercantilist wars as being in the interest of average American taxpayers … leading to an incomplete critique and a flawed class analysis.”

The war industry, contrary to American mythology, is a systemic fraud offloaded onto working people by and for privileged industries so thoroughly entwined with the state as to be practically inseparable from it. Nothing is a more unblushing affront against anything even approaching a real free market than the defense industry.

As contrasted with a genuine, non-statist free market, one where no one was entitled to thrust his costs onto others, the corporate economy is completely suffused with coercive favoritism. And that favoritism costs ordinary, taxpaying Americans in the billions while, for example, the banksters who finance the war apparatus and the contractors who build it profit.

Further, since the profiteers’ immeasurable infrastructure costs are largely born by the federal government (i.e., our purloined dollars), everything they make is a gain. Through all of U.S. history, the story of war has been a seedy, nepotistic web of alliances between Washington powerbrokers and influential businessmen hoping to make a buck off of “making the world safe for democracy.”

That’s not to say that the ruling class doesn’t buy into its own justificatory canticles to “the American Way,” but nowhere is the state’s ultimate role clearer than in war. Throttling the free market — the unrestricted, voluntary exchange economy — to benefit grasping monopolists has always been the institutional aim of the state.

Market anarchists see war for what it is, an inevitable result of a corrupt and cartelized economic paradigm instituted by the state for Big Business interests. As long as the state continues to dominate and enslave society, its system will always incentivize war as a shortcut to fortune.

By assuming for itself the unilateral power to use force in society, the state’s natural and distinguishing method is the war method. Allowing peaceful, cooperative means of organization to order society through trade and synergy would disrupt the presently existing inducements of war.

The political class will continue to give us these insignificant adjustments around the outer edges of “acceptable” policy. Only statelessness and the nonaggressive choices of self-governing individuals can bring about a true “drawdown” — a final end to needless empire.

Against the backdrop of anti-government protests and his regime’s brutal response, Syrian President Bashar al-Assad addressed the country on June 20. Downplaying both the demonstrations and the dissatisfaction that they represent, Assad called on “the people and the state [to] come together.”

With the death toll climbing, Assad’s assurances about “getting the military back to their barracks” hardly ring believable, but there was a faint truth to his words. Although the insight is no doubt lost on Assad himself, by appealing for the unification of the people and the state he implicitly acknowledges that the two are quite distinct.

Summarily taking to the streets following Assad’s speech, unconvinced protesters met his talk of “reform” with chants of “liar.” For market anarchists, their chants were loaded with subtext regarding the relationship between society and state. Nietzsche perhaps said it best: “The state is called the coldest of all cold monsters. And coldly it lieth; and this lie creepeth out of its mouth: ‘I, the state, am the people.’”

Far from personifying some collective will, the state is merely the unwieldy implement of a power elite, plotters who conspire not behind a curtain, but right out in the open. The political class, the parasitic few who contrive the system of state capitalism, feel no need whatsoever to hide; they cheat and extort the public from behind protestations of the “popular will.”

We will find, though, that historically the “popular will” has been no more than an assiduously attuned cover for the will of rulers, rhetorical chicanery to hold the ruled in line. Other meanings, any formulae that advance the phrase as something beyond just the sum of individual wills, proves elusive or altogether illusional.

To market anarchists, abstract notions like the “free market,” “the popular will,” and “democracy” are, by definition, not things that can be orchestrated according to design or imposed by some governing body. To have any real significance, such expressions must be properly understood as verbal proxies for complex webs of voluntary interactions.

Popular concerns about what is now considered “the free market,” warranted as they are, are in fact worries about an economic reality in which the state has intervened for powerful business interests at every level of analysis. Distinguished by its Himalayan peaks of concentrated wealth separated by vast expanses of poverty, today’s system is a product of the state rather than of a pure free market.

Consider, by analogy, the tendencies of liquid or gas molecules, their natural drift from areas of higher density into areas of lower density. As related in a popular science text, “Unequal pressures will always equalize themselves if given a chance.” The functioning of a genuine free market — one composed of the unobstructed trades of self-ruling people — would achieve the same kind of balance.

It is the concentration of power in society, with the state falsely holding itself out as “the people,” that gathers wealth into the hands of a small coterie. The social phenomenon of the state, then, is thoroughly tied to the economic conditions we observe today. As is very apparent in countries like Syria, for the yawning breach between the “haves” and the “have-nots” to exist, the introduction of coercion is necessary.

The public outcry in Syria demonstrates that there’s distinction between political and economic problems — or between political and economic freedoms. Market anarchism is the idea that all relationships, whether of a social or commercial kind, ought to be grounded in consent and mutual respect. This is the simple idea that can unchain a true social will from the state’s ruling classes.

Nicholas Kristoff, in a New York Times op-ed (“Our Lefty Military,” June 16), lauds the “astonishingly liberal ethos” that governs the military internally — single-payer health insurance, job security, educational opportunities, free daycare — in support of Gen. Wesley Clark’s description of it as “the purest application of socialism there is.”

For me — an avowed libertarian socialist as well as a market anarchist — at least two howlers stand out here.  First, when I think of “socialism,” I think of all the liberatory things originally associated with that term back in the days of the early working class and classical socialist movement in the nineteenth century: Empowerment of the working class, worker control of production, and all the rest. Last I heard, the U.S. military isn’t set up as a worker cooperative, with enlisted men electing officers, managing their own work, or voting on whether or not to go to war. Taking orders from a boss “because I said so” isn’t my idea of socialism.

Second, the primary external mission of the U.S. military is to keep the world — or rather the corporate pigs who claim to own it — safe from anything remotely resembling worker empowerment. To me, that’s pretty unsocialistic. For the past sixty-odd years since WWII (a lot longer, actually), the primary focus of American national security policy has been to protect feudal landed oligarchs from land reform, protect Western-owned corporations from nationalization, act as collector of last resort for the company store known as the World Bank, and enforce the draconian “intellectual property” protectionism which is the central bulwark of global corporate power today.  Kristoff’s “socialist” military’s primary mission is keeping the world firmly in the hands of its corporate rulers.

Aside from that, I think Kristoff has it exactly backward: The military is almost a parody of American corporate culture. It’s riddled with hierarchy, with Taylorist/Weberian bureaucratic work rules and standard operating procedures, and all the irrationality that goes with them. The only difference is, the pointy-haired bosses wear a different kind of uniform. If you’ve ever seen the movie “Brazil,” or read Dilbert on a regular basis, you get the idea.

Kristoff has one point on his side: The differentials between production workers and senior management are a lot lower in the military than in present-day Corporate America. But that just means the military is structured more along the lines of old-style bureaucratic “Organization Man” capitalism of the sixties (as described by J.K. Galbraith), in which CEO salaries were typically only fifty times that of a production worker, rather than the current pathological model of cowboy capitalism where it’s more like five hundred.

The military, like the large corporation, is plagued by enormously high overhead costs (the cost of training a soldier), and enormously wasteful capital outlays. The military, like an oligopoly corporation, can afford to be so wasteful because it doesn’t bear the full cost of its own activities.

Corporate America’s prevailing management accounting system, invented almost a century ago by Donaldson Brown of DuPont and GM, equates consumption of inputs to creation of value. You know, like the Soviet centrally planned economy. Administrative costs like management salaries, along with wasteful capital expenditures, are incorporated — through the practice known as “overhead absorption” — into the transfer price of goods “sold” to inventory. And in an oligopoly market, the corporation is able to pass those costs — plus a profit markup — on to the customer through administered pricing. The military shares that pricing system, with its incentives to maximize costs (Paul Goodman called “the great kingdom of cost-plus”). Ever hear of those $600 toilet seats? But in the case of the military, the administered pricing is called “taxation.”

In short the military, like the large corporation, is a giant, bureaucratic, irrational, and authoritarian institution which can only survive through parasitism — enabled by the state — on the working class.

Translations for this article:

• Portuguese, Nossa Instituição Militar Corporativa.

Media are abuzz lately with plaudits for the Huffington Post, noting the site’s parity with august news sources like the New York Times. Arianna’s site lacks not for critics, though, and many have begun to ask the question — as Mother Jones’s Kevin Drum did last week — is HuffPo unfair to labor?

That question proceeds from HuffPo’s long-running practice of not paying bloggers, instead capitalizing on their desire for exposure to the site’s formidable — and growing — audience to solicit “free” content. As the news economy hemorrhages jobs, the Newspaper Guild and the National Writers Union are calling for an “electronic picket line” to contest the site’s “unfair business advantage.”

Beyond the discrete question of whether or not these bloggers are exploited, the HuffPo dust-up presents a unique opportunity to test some common speculations about labor economics. It’s frequently argued by libertarians, for example, that unions and their strikes achieve results for workers only through the use or threat of force (i.e., that unions are inherently coercive bodies).

Given the prevalence of anti-union sentiment within libertarianism, it behooves market anarchists to demonstrate that one can be both pro-free market and pro-labor — indeed, that to be one is to be the other.

It isn’t merely that cartelization and labor laws stack the deck for capital at the bargaining table, but that the totality of the circumstances created by the state propels everyone toward that table. Most of us are familiar with the phrase “nanny state,” the notion of state creepery into every facet of human life, but many don’t realize just how fully the state preempts any attempt at genuine independence and self-sufficiency.

It’s seldom noted that the power elite’s monopolization of wealth, natural resources and technology have changed the very patterns of daily life. With alternatives to the state-corporate economy effectively closed off, rendered both legally and economically infeasible, there’s little to do but “choose” the life of the average nine to fiver.

The expression “wage slavery” is, unlike “nanny state,” not often heard from free market libertarian types, but the two are married both in theory and in practice. The hierarchical, chain-of-command structure of the maladroit American corporation situates naturally within the cradle-to-grave state.

Both are designed to render us unthinking, biddable instruments, fully dependent on higher-ups who must know better than we how we ought to spend our time and energy. To measure the state against the present-day corporate, to present them as opposites, is to ignore the reality that the existing corporation is a mere protuberance of the state. Its current form is defined by and exists only through the constant prolongation of privilege, of government support including massive handouts and protection from competition.

Bearing such a warped context in mind, it is impossible to consider — as so many libertarians do — present employment agreements “purely voluntary.” While they may not be as palpably coercive as other interventions, they are nonetheless molded by coercion, and nonetheless harmful. As Friedrich Hayek explained, “Coercion implies … that I still choose but that my mind is made someone else’s tool, because the alternatives before me have been so manipulated that the conduct that the coercer wants me to choose becomes for me the least painful one.”

Again and again, we libertarians seem to understand the dangers of the all-embracing “nanny state” so well indeed that we figure it’s used to give the worker more than what she’d earn in a free market. Even if Huffington Post bloggers don’t evoke the same mental imagery as downtrodden factory workers, we should hardly fault them for their desire to drive a better deal for themelves.

Some libertarians who so execrate unions ought to note well the fact that no one is acting coercively against those crossing the “virtual picket line.” Admittedly that would (in this case) be rather difficult, but it’s worth pointing out, as even Rothbard did, that for many of the Huffington Post’s writers not crossing that line was given a “commandingly high place on their value scales.”

That is to say, coercion hasn’t been what’s kept many writers from “strikebreaking;” they’ve made the decision not to cross the line quite independently of the prospect of any violent consequence. So although many have continued to write, enough have abstained to induce Huffington to sit down with the unions.

The Internet Age, by allowing easy, non-confrontational routes around picket lines, may finally put to rest some of the anti-union prejudices that have populated libertarian thought. Because even with those routes available, workers are going to see that not crossing isn’t just right in some abstract sense, but is in their interest.

“Greek workers of all ages and professions, pensioners, students, the old and young,” Reuters reports, “marched on parliament in Athens Wednesday to vent their anger at the country’s politicians and their austerity plans.”

The demonstrations, notable for their non-violent and non-political character, come in response to tax hikes, budget cuts and foreign creditors’ demands that Greece sell off public assets. In the streets, though, “the ordinary people” see themselves as making all the sacrifices while the political class sits pretty.

The inescapable truth is that austerity measures in Greece punish laborers for the structural imbalances of the corporate state, an economic system that has proved fruitful for the very elites now talking budget cuts. And although free market types are perceived by many — and very often rightfully so — as harboring a reflexive antipathy to public workers, libertarians ought to carefully consider what epithets like “tax-eater” mean within the current context.

The assumption of libertarians who castigate public workers on principle seems to be that, by working for public monopolies that steal from taxpayers, these workers are not “playing by the rules” of the free market. It may not have occurred to libertarians who see public workers’ unions as the devil incarnate, but their corporate darlings are, in many cases, no more creatures of the free market than those government agencies.

The rules of a purely hypothetical, completely free market are selectively applied to ordinary, working folk who had this very unfree market thrust upon them. Greek workers didn’t choose state capitalism’s framework of anti-competitive privilege, nor are they its true beneficiaries, but they find themselves demonized for wanting decent pay.

Within the current economic system, the distinction between a state-owned and -operated “public” economic actor (like a school or transit system) and a state-protected and -favored “private” economic actor is frequently difficult to make out.

Some “private” firms — for example, U.S. titans like Raytheon, Lockheed Martin and Boeing — make most of their money through direct relationships with government. But insofar as they “bid” for government contracts, we libertarians are asked to treat them as morally superior to government-owned enterprises. Even private companies that never contract with the state benefit from the government largess — courtesy of the taxpayers of course — in the form of direct and indirect subsidies.

So why do we so seldom hear apostles of the free market labeling their employees (let alone themselves) “tax-eaters?” The state has so critically adulterated and altered the marketplace, so distanced it from anything like a free market, that it’s far more useful to ask the age-old question: Cui bono? At the risk of giving away the ending, the answer is plainly not the average worker.

If you want to be a fireman, a schoolteacher, or even a train conductor in most countries, Greece among them, you’ll find scarce few options for doing so outside of “public employee parasitism.” The state forcefully removes these areas of employment from the market, compelling the fireman to either change careers or take a paycheck from the hated state.

Surely monopolization of a particular service by the state puts the organization in a position of power relative to the consumer, but no less so to the hired worker, who has no other outlet for her talents. The windfall immanent in the monopoly price we pay for such services has, rather than accruing to the worker’s benefit, been hoarded to the top of both the “private” and “public” sector pyramids.

The state capitalist system, with its inbuilt limitations on labor bargaining power, is a racket of, by and for the bosses. As the market anarchist Francis D. Tandy sardonically quipped of the argument that state ownership would improve conditions for workers: “Oh, yes, State ownership will certainly prevent strikes! The workers then won’t have even that chance, poor as it is, of bettering their condition.”

For now, we’re stuck with the state and its plutocracy. We would do well as anarchists, then, to actively vilify that plutocracy in Greece and everywhere else, showing that a genuine free market would end victimization of the working class.

Dear C4SS Supporters,

Another week under the bridge here at the Center, and I’ve got a lot to report, including something I forgot last week:

Last week, I submitted 10,274 C4SS op-eds to 2,819 publications worldwide.

This week, it’s been 11,095 submissions to 2,818 publications.

The line between “mainstream media pickups” and “blogosphere action” is definitely beginning to blur in a big way. So is the line between “pickup” and “citation.” These are getting to be somewhat subjective calls, and I’m the guy who has to make them … but I’ll explain myself.

I’m calling it eight “pickups” this week, and I’m going to start with the two that really hit that blurred line:

Last week, I mentioned that Forbes blogger E.D. Kaine had name-checked/quoted our own Kevin Carson.

This week, Kain linked directly to, and quoted long sections of, two of Kevin’s articles.

At Forbes, Kain quotes/links Carson’s “If This is the Free Market, Why do I Feel so Unfree?” in an article on “The Problem with Patents.”

And at The League of Ordinary Gentlemen, Kain quotes/links Carson’s “‘Public Service?’ I’m Taking My Business Elsewhere” in “On So-Called ‘Public Service.'”

What makes these “mainstream media?” I don’t think I have to argue that Forbes is reasonably “mainstream.” The dividing line that The League of Ordinary Gentleman falls on the “mainstream” side of is that the site, and the cite, show up in Google News.

What makes them “pickups,” rather than mere “mentions?” The fact that Kain quotes the pieces extensively — multiple paragraphs, not just a sentence or two — and prominently links them. We’re getting real mindshare for the actual text, not just a tip of hat to concept.

So, judgment call, and that’s how I made it.

Six other “pickups” to report for the week:

• The Carroll County, Maryland Standard ran Kevin Carson’s “It’s Not Big Government if it Helps the Rich” on June 11.
• The University of Iowa Daily Iowan published David D’Amato’s “Libya and G8 Hypocrisy: The State Must Go” on June 14.
• The Deming, New Mexico Headlight ran my own “The State: Put a fork in it” on June 15, and David D’Amato’s “Big Business Getting Something for Nothing” on June 16.
• Kevin Carson’s “Intellectual Property: Some Countries are More Equal than Others” appeared in Quebecois Libre on June 15.
• The Dhaka, Bangladesh New Nation ran Carson’s “Bitcoin: More Important than You Realize” today (June 18 on that side of the International Date Line).

This week’s random blogosphere link love reciprocity: Libertarian News, Zero Gov and Independent Individualist.

Have a great weekend!

Yours in liberty,
Tom Knapp
Media Coordinator
Center for a Stateless Society

At The Huffington Post, Dylan Ratigan bemoans the “ownership and operation of public services, such as airports, toll roads and shipping ports,” by private companies with “monopolistic positions.” Ratigan notes the “conflicts of interest” created by the venal, revolving-door business of political privatization, asking “if truly want to see America for Sale.”

Ratigan’s column implicates a number of issues of importance for anyone who calls himself a “libertarian.” What many Americans may not realize, though, is that the free market left shares many, if not all, of Ratigan’s concerns about the game of monopoly being played with the country’s infrastructure.

In virtually every country, there is some version of the same folklore that casts the state as the trust-busting crusader for the powerless, bullied consumer. The familiar fallacy, which places business and government in adversarial struggle, is summed up in twin, art deco statues at the Federal Trade Commission (FTC) headquarters in Washington.

The statues, collectively called “Man Controlling Trade,” depict a burly man locked in contest with raging horse, trade, that, if left unchecked, would rampage out of control. A question thus arises as to the origin of monopolies or trusts, as to what society can do to prevent the undesirable condition of one or a handful of commercial powerhouses cornering a given market.

When discussions of antitrust or competition law arise, mainstream economists and FTC lawyers alike are quickly to invoke the nebulous idea of “perfect competition,” a state they imagine can be brought about under their careful nurturing. Without the state’s many regulations, they claim, companies would naturally gravitate together and collude, amassing the market power to set prices wherever they wished.

And since the state’s does, from time to time, prosecute firms for monopolizing or attempting to do so, there is an assumption that what I’ll call the “Man Controlling Trade” thesis is, for the most part, true. But are the economic incentives of a genuine free market really such that firms will abandon competition freely? Were anyone allowed to enter any market, would we really witness an utter lack of enterprising entrants ready to undercut a price-gouging monopolist?

Distinguishing real free markets from capitalism as it exists today, market anarchists contend that the accepted conjectures about “perfect competition” and market power are mistaken. Rather than curbing the market power of firms dreaming of combination, the state — without any mastermind’s conspiracy — installs the preconditions of cartelization in society. Market anarchists suggest a different solution for staving off commercial domination.

The anarchist Pierre-Joseph Proudhon envisioned a society without the state in which “the notion of commutative justice, first brought forward by the primitive fact of exchange, … is substituted for distributive justice.” For Proudhon, commutative justice, synonymous with “the reign of contract, [and] the industrial or economic system,” was itself the best means to a fair distribution of wealth in society, to the full reward of labor.

The free market, then, the sum of all voluntary exchanges, was to be the practical answer to the “social question” or “social problem” defined by the disjunction between work and wealth in society. This was the puzzle that the anarchist movement of the nineteenth century set out to unravel, both challenging and absorbing the foregoing liberal tradition. Following from Proudhon, American anarchists like Benjamin Tucker saw the competition of true free markets as constantly undercutting attempts at monopolization, preventing the over-accumulation of wealth in a few hands.

Far from thriving due to unhampered competition, powerful businesses were (and are) properly to be regarded as the principle beneficiaries of state protection and privilege. Their market power is sheltered from the strains of competition by the very legal framework that the state has sold as serving the consumer.

Market anarchists have long been dedicated to showing that markets freed from the strictures of the state are best not just to, for instance, promote innovation, but also to fairly distribute wealth. Indeed, the only way the bosses can get the better of the blue collars is through the use of state coercion to corrupt what would be the effects of consensual exchange.

True competition law is simply the law of nonaggression. Once the state is extracted from the economic system, monopoly and exploitation will go with it.

Through a referendum in January the southern region of Sudan resolved to separate and form its own, independent political entity. Already largely autonomous, nearly 99 percent of the region’s population favored secession, and the Republic of South Sudan is to ascend to full and distinct statehood in a matter of weeks.

With Sudan’s President Omar Hassan al-Bashir accepting the results of the referendum and the birth of the new state, the country seemed to be prepared for a smooth and peaceful transition. But, alas, when the nebulous border territory between the country’s stands on a plentiful oil well, a seamless transition is probably too much to ask for.

For decades, the areas now disputed by the north and south, in particular the small region of Abyei, have been seedbeds for violent conflict, putting them at the center of various peace deals devised to put an end to long-running wars. Now, BBC News reports, “The UN has accused the Sudanese government of carrying out an ‘intensive bombing campaign’ near the north-south border.”

In the unified Sudan, wealth and political power were concentrated almost exclusively in the Arab, Muslim north, and Bashir has insisted that Abyei “is northern and will remain northern,” adding that northern recognition of the new southern republic turns on Abyei’s status. For market anarchists, who urge an end to systematized violence within society, Sudan’s present state is a foreseeable repercussion of the state’s introduction of capricious, aggressive authority.

“[T]he present-day boundaries of nations,” wrote Murray Rothbard “are purely historical and arbitrary, and there is no more need for a monopoly government over the citizens of one country than there is for one between the citizens of two different nations.” The political system, one of borders and coercive rather than consensual bonds, is necessarily divisive, rooted in the idea that we need the rules of masters to delineate our relationships.

But all the time, every single day, we deal with our neighbors without oversight, in nonviolent, mutually beneficial relationships governed by nothing but our agreements. If you’ve ever so much as sold something at a yard sale, you’ve seen what market anarchists mean by “anarchy.”

To counsel a society without masters and their borders, then, is not to invite mayhem or injustice, but is simply to turn both the geographic and social cartography over to the aggregate of individual judgments. Over the centuries, political leaders have refined the oratorical wiles used to persuade us to fight their battles, to regard the perimeters they have drawn amongst themselves as a source of unity and pride in society.

So instead of looking on the “nationality” of the state as it really is — as something opposite true community — we have been trained to identify with our captors. Where language and culture have evolved freely and spontaneously without central, hierarchical direction, the state is an inorganic power structure manufactured by the ruling class out of a desire to loot and exploit.

The flags of governments should not motivate us toward the battlefield, but instead should fill us with a deep, moral indignation. Quite contrary to the prattle of the corporate media, the starting point of the conflict between Sudan and Southern Sudan is not ethnicity in and of itself.

Instead, the very existence of the state, as a mechanism for aggressively gaining control over valuable resources, inescapably pits neighbors against one other. Even if most are naturally inclined to trade peacefully, for some the opportunity to brandish the power to despoil society of its natural wealth proves alluring.

A small, warlike few has, under the aegis of the sacred state, been able to condemn the vast, productive majority to an unbroken civil war; that war is made conspicuous by inter-state armed conflicts and situations like that in Sudan, but it rages everywhere, even intra-state.

It is the war that the state wages on its own citizens, and it won’t — and can’t — draw to a close until the natural harmony of the marketplace succeeds the alienating aggression of government. No new borderlines can solve the underlying problem in Sudan because political solutions are the problem.

Only work and free, equal exchange, a stateless system of market anarchy, can decide who owns scarce resources. When the world realizes that fact and loses faith in the state, it won’t matter what we call it — we’ll have anarchy.

Steven Cohen, writing at Huffington Post (“We Need to Respond to the Attack on Public Service,” June 13), writes that “the profound and intensifying attack on government and public service” is cause to be “frightened.”

Let me start by saying I’ve fallen afoul of many libertarians by defending public sector employees like those in Wisconsin against reflexive charges of parasitism.  If they’re engaged in a legitimate function like teaching kids or delivering mail that would still exist on a voluntary basis even in a stateless society, and the state currently crowds out voluntary alternatives, they’re no more blameworthy than the workers in Soviet state-owned factories.

And I’ve argued that public sector unions frequently empower such workers against those at the top rungs of the state, and might be a useful tool for genuine privatization — i.e., Proudhon’s vision of devolving state functions into voluntary social relationships.  That means, instead of the right-wing “privatization” agenda of auctioning off government functions to crony capitalist corporations, mutualizing them as consumer cooperatives owned by the recipients of services. Anyway, I’ll proudly back a teachers’ union local against a superintendent of schools, any day of the week.

Nevertheless, the term “public service” really activates my gag reflex.  Like “statesmanship” and “reaching across the aisle,” it belongs in the kind of drinking game you play when you see managerial centrist hacks like David Gergen, Chris Matthews and David Brooks gathering to feed on a cable news talking head show.

On any given day, if you follow Radley Balko’s blog, you can see stories of “public servants” planting evidence on suspects, launching no-knock home invasions in which they shoot pets and wave guns at children (all over the peaceful ingestion of substances the state decided to “forbid”), and sending people to prison on testimony from jailhouse snitches coerced into perjuring themselves.  The “public servants” in the prison guard and police unions lobby the state for ever more draconian and invasive extensions of the Drug War.  The “public servants” in airports subject their public “clientele” to degradation and humiliation on a daily basis.

Every “public servant” in the Oval Office in my lifetime has launched wars of aggression that murdered innocent civilians by the thousands or hundreds of thousands, and the “public servants” in the military-industrial complex spend hundreds of billions maintaining garrisons in an empire of thousands of bases around the world, all to “defend” us against countries on the other side of the world that couldn’t possibly project military force more than a few hundred miles beyond their own borders.  And all these wars are case studies in the kind of “public-private partnership” Cohen lionizes, fought in the interest of the esteemed Generals Motors, Electric and Mills.

Cohen does admit that the federal government is “too far removed” from much of what it deals with, and recommends federalism — decentralizing a large part of policy to local governments — as a remedy.  Most of us on the Left have seen the sausage-making process in action in local government, especially as regards Cohen’s much-vaunted “infrastructure,” and it ain’t pretty.  The average local government may be “responsive” to the Rotary Club yahoos who run things (they’re real fond of phrases like “public service” there, as well), but certainly not to us.  The typical local government is a showcase property of local real estate developers, and its primary function is to provide below cost roads and utilities to the new cul-de-sacs and big box stores that spring up at every cloverleaf of the new government-subsidized freeway.

Cohen’s red herring about the big ideological war between “capitalism” and “communism” is beside the point.  It presupposes some sort of rivalry between government and business, when in fact big government liberals have been — in the words of Roy Childs — “the running dogs of big businessmen.”

As far as I’m concerned, most of the rivalry between the so-called “public” and “private” sectors in American political discourse is about as genuine as that between the “good cop” and “bad cop” in a police interrogation room.  What’s referred to as the “private sector,” by the sort of right-wing corporate apologists who typically pass themselves off as “libertarian,” is so state-cartelized and state-subsidized that the boundary between the giant corporation in the monopoly capital sector and the giant government agency is, at best, quite blurry.

The big business interests to whom self-proclaimed “free market advocates” like Dick Armey want to hand over the country are virtual creations of the state.

So Cohen’s aside that he “taught management to future public managers for about thirty years” sets off alarm bells for me.  I’ve worked in both the “public” and “private” sectors, and seen deskbound parasites in both places downsize service staff while sending themselves to cushy management retreats.   One pointy-haired boss is pretty much the same as another.

In fact Cohen is an advocate for just the kind of government-corporate collusion that has defined actually existing capitalism for the past 150 years or more.  He argues that “[T]he economic powers of the 21st century will be those that figure out how to develop a productive and sophisticated relationship between government and the private sector.”

That’s certainly true, all right.  The “economic powers” we have right now — several hundred transnational corporations that dominate the global economy — owe their size, if not their very existence, to a “partnership” with government.  It’s the kind of partnership where government subsidizes their basic operating expenses and allows them to externalize the inefficiency costs of large size on taxpayers, severely limits price and quality competition through regulatory cartels, and enforces so-called “intellectual property” laws as entry barriers from behind which privileged corporate pigs can extract rents on artificial scarcity.

Just look at Cohen’s examples.  There’s the USDA-agribusiness complex, which (parroting Cargill propaganda) he says made America “the world’s breadbasket.”  And of course, beloved of all true liberals, the Interstate Highway System — built under the direction of DOD Secretary Charles “What’s good for General Motors” Wilson, and which is now the basis for the big box “warehouses on wheels” business model that has destroyed Main Street.

In short, government at all levels provides the kind of “public service” you have a hard time escaping if you don’t want it.  It’s understandably popular with the “public” of corporate fat cats and coupon-clipping rentiers.  But whoever the customer is for such “public service,” it’s not you and me.

Translations for this article:

• Portuguese, “Serviço Público”? Estou Tirando Meu Time de Campo.

On Monday, June 13, PBS’s Nightly Business Report observed that while “American workers may be struggling, … the nation’s biggest companies are set to report record second-quarter profits.” With the United States economy in “a soft patch,” ordinary people are tightening their belts, but, according to J.P. Morgan’s Joseph Tanious, “corporate balance sheets are as healthy as they’ve ever been.”

Although it may appear an anomaly that America’s top companies would be getting along so well while the great majority remains in economic distress, market anarchism offers a thoroughgoing explanation. The inequalities on display in the PBS story are, contrary to a common misunderstanding, not a symptom of free markets, but of statist, crony capitalism.

Most Americans are familiar with the arguments against monopoly, regarding it as a wraithlike threat inherent in some equally indistinct notion of “cutthroat competition.” The general idea is that we need the state to act as a counterbalance to the greedy capitalists who would price gouge us into destitution but for vigilant watch of government.

As it is of service to the ruling class, this myth has been reiterated and reinforced by the court intellectuals whose livelihood is intertwined with the state’s hierarchies of power. Powerful though it is, the myth is also fragile, susceptible to the explosive potential of the truth. And the truth is that the state’s role in the economy is not to protect us from the corporate kingpins, but to protect them from a market freed from coercive constraints.

“The struggle for existence now,” wrote Henry Addis, “is due to monopoly: to the legal restriction of natural opportunities.” The state, by engendering an economic situation of scarcity in areas where there would otherwise be none, enables its favorites to profit at rates a true free market would not allow.

Thus is the monopolistic system imposed by the state, giving us an economy in which opportunities for the laboring majority are methodically disrupted for the power elite. Basic principles of economics — the uncontroversial, elementary sort apropos of supply and demand — teach us that constricting the supply of a good or service will drive up its price.

Obstacles and barricades erected by the state, its arbitrary rules and regulations, limit entry into markets, binding our economic “choices” to powerful cartels. And since state-protected monopolists are able to charge far more for goods and services than their actual worth, we are all obliged to work harder and for longer than we would in a society without privilege, one with genuine market competition.

The state’s regulatory environment precludes such open competition by way of rendering legally acceptable forms of participation far more expensive, not better in any measureable way — just more costly; it’s a pay-to-play schema, gatekeepers taking their tributes at every level and, at least for the bosses, it’s working to perfection.

For the rest of us, though, the state’s intervention means that everything we buy is marked up to reflect the difference between the price as it would be in a free market and the monopoly price. Every cent of that difference is exploitation, is a criminal profit achieved only as a result of the introduction of force into the economy.

Taking into account all of the societal wealth that is lost to this kind of exploitation — to feathering the nests of ruling class loafers — we might wonder too how much time is lost. Could we open all of the economic avenues closed off by the state, the “natural opportunities” Addis referred to, maybe we could get off of the corporate hamster wheel long enough to honestly address social problems.

The market anarchist alternative contends that peaceful society does not need the state, that trade and common cause can provide all of the regulation we need. In light of the current state of things, we have absolutely nothing to lose by casting off the state. Then again, maybe we should just continue to base our opinions about the country’s economic health on whether the Dow closed up or down.

In a column for the Huffington Post on Monday, June 13, 2011, Columbia University’s Steven Cohen asserts that “every American should be frightened by the profound and intensifying attack on government and public service.” Cohen submits a vision of the United States very close to an antithesis of the one that actually exists, his alternative universe being a place where the state has been trivialized in favor of “the free market.”

Cohen’s utopia would apparently be a place where the government and giant corporations work hand in glove, their alliance driven by a vaguely parental “passion for public service.” His major assumptions, then, are twofold: That public services cannot be provided but through hierarchy and violent monopolization, and that violent monopolists have every interest in serving the public. Well, on both counts, Cohen couldn’t be more wrong.

He writes that “[c]apitalists are starting to understand that mass poverty and unemployment is politically destabilizing,” but they have always understood this. Because the economic system of Big Business and Big Government has been so deftly efficient at bleeding working people dry, the ruling class has found it expedient to assemble a welfare framework.

Their bureaucracy for “public assistance,” though, whatever its appearance, is grounded not in the humanity or benevolence of the elite, but in their shrewd calculations. As in Tolstoy’s famous parable, the farmers are eventually “afraid that the cows may cease to yield milk,” and so “they invent various means of improving the condition of these cows.”

For the total state’s “helping professions,” public service consists in condescendingly rounding up and corralling those that need to be “helped,” so that their lives can be strictly regimented and overseen. The absolute best thing that the state could do for the poor — the one thing that would truly change their posture on a fundamental level — is the one that is never broached in “respectable,” mainstream debate. Under no circumstances is it considered that we might, returning to Tolstoy’s allegorical farm, “take down the fence and grant the cows their natural freedom.”

As a practical matter, the “proper balance” between commercial interests on the one hand and the state on the other has been no balance at all. Whereas “balance” implies a trade-off between two poles or sides of a scale, the interests of state and corporate power are one and the same. Indeed, to suggest even that they can be differentiated in the prevailing economic system is absurd, ignoring the pervasive coercion that runs through it at every level.

Cohen’s version of “public service” is no more than a mantra invoked to glorify the sweeping, anti-competitive affronts against a true free market that the state institutes to profit the rich. The state-corporate projects Cohen fawningly praises are the sorts of things that require eminent domain land-grabs for new Pfizer complexes; his darling infrastructure investments are the ruin of the spontaneous order of a market freed from state intervention — the kind of market that could open doors for America’s least fortunate.

Quite contrary to the fretful contentions of the Earth Institute’s Executive Director, neither an “attack on public service” nor even a faint disapproval of its underlying values is prevailing in Washington. The public-private collusion Cohen is so enamored of, rather than retrenching, has left room for “the free market” of his nightmares only at the narrowest margins of economic life. Market anarchism would restore peaceful trade and association to its proper place within society, turning social services over to the forces inherent in genuine community.

Having confused American state capitalism with the free market, Cohen accepts (completely uncritically) the asinine folk tale that, in our current economy, there is some kind of bright line dividing “the private and the public sectors.” He doesn’t seem to notice that, far from advocating anything remotely close to a true free market, the “capitalists” he refers to have persistently been at the forefront of calls for “the mix of public and private roles.”

Cohen’s program of faux “public service” has won the day — has allowed huge, bureaucratic corporations and government agencies to crowd out or completely preclude competitors and to dominate our lives. Instead of cheerleading for more of the same, genuine public service would mean unshackling voluntary cooperation and exchange, allowing communities themselves to decide how to help themselves.

Market anarchists contend that absent state monopolization — and its real-world effect of creating scarcities to enrich the well-connected — everything from utilities to aid for the poor would witness vast improvements. While Cohen would aggrandize the authoritarian institutions that have decimated the economy, market anarchists would empower individuals to work together to solve, rather than create, society’s problems.

Today’s column, oddly enough, was inspired by a quote from Konrad Lorenz used as an epigraph for Stephen King’s novel Cell:  “Humans have not evolved any ritualized aggression-inhibiting mechanisms to ensure the survival of the species.”

In fact, this is not true. Aggression-inhibiting mechanisms are quite prevalent among hunter-gather societies like those in the Amazon, and simple fishing and farming societies like the Indians of the Pacific Northwest. Almost all such societies have had ritualized forms of warfare, relying on such practices as coup-counting to minimize the damage from conflict between villages or tribes. The peasant village communes predominant from the agricultural revolution to the emergence of the first states were mostly peaceful and cooperative. Even among highly organized and aggressive non-state societies, like the tribal confederations of nomadic Indians on the Great Plains, where genuine warfare took place it was still highly ritualized by all sorts of customary taboos that limited the damage done.

Relations between individuals and small groups tend to stabilize themselves on the sort of peaceful pattern game theory would predict, when they have ongoing, rather than one-off dealings, with one another and expect that “what goes around will come around.”

All this happens because human beings are rational utility-maximizers. But these damage-limiting mechanisms disappear in total war between states because states are functionally insane.

Institutions governed by authority relations behave in a manner analogous to that of a human being whose perception of the world is distorted by some cognitive dysfunction, and cannot logically evaluate the consequences of her behavior. This is because authority relations pervert and distort the institutional mechanisms analogous to an individual’s perceptions and evaluations of the world around her.

As Robert Anton Wilson pointed out, dealing with reality in a sane manner requires accurate environmental feedback about the consequences of one’s actions, which in turn requires two-way communications between equals. This is impossible under authority relations, because authority results in one-way lines of communication. 

Those in authority give orders without accurate feedback on the results of those orders, because the upward flow of communication is distorted by power. Information is filtered by power relations as people tell those in authority what they want to hear. No one tells the real, unfiltered truth to someone with a gun, or even to someone with the power to fire her. When the genius MBAs in the C-suite decide to lay off half the production workforce in order to goose their own stock options, there’s not much danger of a factory manager, or even the head of a production division, saying “you know, that’s a really stupid idea.”

Those in authority are also insulated from the real consequences of their actions, because power is a machine for appropriating the positive externalities of others’ actions and imposing the negative externalities of one’s own behavior on those with less power. The net consequences of a decision for everyone in the organization may be negative, but what counts is that they’re a positive for the leadership. “It’s good to be king.”

The state is the ultimate in power relations. Its leaders are functionally insane; their own power distorts their perception of reality and the consequences of their actions. Total war, in which a major portion of a country’s population and wealth is sacrificed for the leadership’s purposes, seems worthwhile because they’re not the ones whose their families are slaughtered, homes bombed and crops burned. A state leader will send an army to devastate Georgia or to firebomb Dresden because he knows any retaliatory consequences will fall on other other heads. “Let’s you and him fight.”

There’s been no strategic nuclear war since 1945 because the leadership of the nuclear powers had enough residual perception of reality to understand that — for the first time in history — a nuke could be dropped at will right on the Kremlin or the White House, with virtual certainty of death for themselves. The bomb for the first time raised the possibility that, if war went total, the king would be the equal of his subjects before the Grim Reaper. That’s why, despite all the cries of alarm about “foreign threats” in the buildups to war, the U.S. government since WWII has only attacked those it thought couldn’t fight back.

Rational behavior is possible only when people voluntarily associate with one another, communicate as equals, and experience the full consequences of their own actions.

C4SS Advisory Panel member Gary Chartier, author of The Conscience of an Anarchist, joins hosts black bloke, darian, bosco and bile. 8:30pm Eastern at ThinkingLiberty.net. [live stream]