Although she may not realize it, Amanda Knox, the American citizen recently convicted of murder by the Italian government, has provided a teachable moment to illustrate what privilege is.

In 2009, Knox was charged with murdering Meredith Kercher, a British student she roomed with while studying abroad. After being acquitted following an appeal in 2011, the Italian supreme court ordered a retrial. Knox was subsequently found guilty again.

The investigation and trial has been a media-fueled frenzy from the beginning. There are generally two polarized camps on the issue: Those who think the investigation and trial are an injustice fueled by anti-Americanism and misogyny, and those that think the outrage itself is a form of reverse-sexism that ignores evidence.

Is she being victimized and slut-shamed by the Italian government? Is she being pedestal-ed and given special treatment by the American public for being hot? Or both?

There’s another story waiting to be told here: The story of how privilege affects the administering of justice not only – also – in America, but especially.

In an interview with The Guardian, on the day of the verdict, Knox explained how her life has changed since the trial began and how it’s affected things she used to take for granted.

“I’m a marked person. And no one who’s unmarked can understand that. Like I don’t even know what my place is anymore. What’s my role in society?”

The second sentence is especially important. What does it mean to be “unmarked?” This is the condition of being privileged.

Privilege manifests in various ways, but the experience of being privileged is always the same – it’s unnoticed. It’s kind of like not noticing not having a headache or not noticing not having a hand. Really, though, it’s not noticing not being discriminated against on a regular basis for something you have no control over.

Another aspect to privilege is the propensity to not believe it exists. For those not routinely discriminated against, it’s hard to believe it happens to other people. This leads many to question the honesty or mental health of those claiming to be singled out based on things like skin color, biological sex, sexual orientation, gender expression and so on. They must either be lying or it’s in their heads.

A Guardian article written in 2011 illustrates the phenomenon of distrusting minorities and how misogyny affected the way the Italian police investigated the case. Talking about the way her gestures and actions, like kissing her boyfriend or looking happy, were being used to determine her culpability, he said:

“An inclination to oversimplify the minds and motivations of others lies at the root of sexism and racism.”

Guessing what someone is really thinking or feeling by studying them through the lens of predetermined beliefs is the definition of prejudice. Using prejudice in criminal justice is obviously an issue and one that is seen too often.

What Knox is going through is an everyday reality for many in the United States, the country with the highest incarceration rate in the world. Reports of sexual violence against women are regularly mishandled by police; in one Human Rights Watch study, it was found that 40 percent of rape reports were not adequately documented or investigated. People of color are put behind bars at a higher proportion relative to whites, making up only 30 percent of arrests but 60 percent of the prison population.

One of the harshest critics of the overwhelming support of Amanda Knox is American lawyer Alan Dershowitz.

“We treat poor people and minority people much worse in the United States by our criminal justice system than they do in Italy, so we really have no standing to tell other countries that their system is unfair. And based on [the evidence against Knox], in America, if she were not an attractive young woman — if she were an ordinary person — charged on the basis of this evidence, she would be convicted and would be serving life imprisonment, or even worse, the death penalty in the United States.”

It should be noted that while Dershowitz hits the nail on the head in the first sentence, he contradicts himself with the second. In another interview, he stated, “On balance, it’s more likely than not that she did, but there’s not enough evidence to prove it beyond a reasonable doubt.” He also felt the need to add that he would not let her date his son. It’s unclear who was asking.

Knox’s damnation came at the hands of the Italian government. In the United States, while racism is a problem rooted in cultural beliefs and attitudes, its most systematically-onerous manifestation comes through the justice system.

Those outraged by Amanda Knox’s treatment must also look at what privilege is and how it affects and controls the prison-industrial complex in America. There’s a lot of work to do.

Translations for this article:

• Italian, La Lezione di Amanda Knox su Privilegi e Giustizia.

One of the books I’ve been reading is titled The KGB Plays Chess: The Soviet Secret Police and the Fight for the World Chess Crown. It’s a fascinating read that provides copious detail on the inner workings of the KGB with respect to not only chessplayers but Soviet athletes in general. I’ve just finished the first part of the book. It’s a lengthy historical essay by Vladimir Popov and Yuri Felshtinsky. The former is an ex-KGB agent while the latter is a well known author. Let me quote some choice bits:

Spassky’s departure and Kortschnoi’s defection were not the KGB’s only defeat in the sports arena in 1976. The Summer Olympics in Montreal also caused the KGB a great deal of trouble. It was an established rule that Soviet sports delegations and tourist groups for sports experts and journalists should include undcover state security officers. These state security officers would constitute an “operational group” from the KGB. Major General Abramov, the then-deputy head of the Fifth Directorate, was placed in charge of such a delegation during the Summer Olympics.The operational group headed by Abramov consisted of thirteen people. It was assisted by agents from the KGB’s local rezidentura, operating undercover in the USSR’s consulate in Montreal.

And another choice bit:

Karpov’s main opponent in his fight for the world championship would be Kortschnoi, who had four times been a champion of the USSR. In order to put psychological pressure on the “contender” — as Soviet propaganda referred to Kortschnoi in those years, without mentioning his first or last name — his son Igor was immediately drafted into the army. The term of service in the army was two to three years. But after serving his term, a member of the armed forces was automatically classifed as having had access to state secrets and, by Soviet law, forbidden to leave the USSR for at least another five years. In this way, by drafting Igor Kortschnoi, the Soviet government was making it impossible for him to join his father for the next seven years, if not more. The level of a person’s exposure to state secrets, and its term of expiration, was determined by the KGB. It was perfectly obvious that for the soon of Kortschnoi, “the enemy of the people,” that term would not be brief.

The book has much more, such as a plot to have Kortschnoi killed should he win the world championship match against Karpov. The interested reader is encouraged to pick up a copy. This book sheds light on what happens when sports are taken over by the state. Left-libertarians have a useful history to point to as evidence for this contention.

I have argued before that scarcity is manufactured in many industries by the deliberate cultivation of economic demand through structures of artificial need. Given the importance of technology in these industries it should not be surprising that the manipulation of technological development plays an enormous role in the manufacture of these structures.

The idea that the malaise of the world has a strong technological aspect is, of course, by no means unprecedented in the literature of anarchism and adjacent ideological regions. The works of Jacques Ellul spring to mind, The Technological Society being a definitive example. Likewise Ivan Illich (e.g. Tools for Conviviality), Lewis Mumford (e.g. Technics and Civilization, The Myth of the Machine), E.F. Schumacher (e.g. Small is Beautiful), Leopold Kohr (e.g. The Overdeveloped Nations: The Diseconomies of Scale), and the “neo-Luddite” Kirkpatrick Sale (e.g. Human Scale). All of these resonate with the position I take here, though I differ in certain respects from each. For anarcho-primitivism I have, in this instance at least, no use.

Notably, Ellul and Illich quite rightly characterize technology as a cultural system rather than a quantity of artefacts, and as rightly emphasize the pervasive nature of that cultural system and thus warn against such spurious ideas as “responsible use”; but in so doing loses sight of the possibility of quite viably lifting, as it were, the artefact out of what might at this moment be its native context. Hence we might have technology qua cultural system, i.e. Ellul’s La Technique, as well as technology qua my or your capacity to create this or that. The boundary between them is exactly the point where Illich’s idea of “radical monopoly” kicks in. I mean to show that the active cultivation of radical monopoly is the predominant factor which currently determines the sort of technological development that happens, and that it is therefore a function of the modern government-corporate state. From this two things may be deduced: First, that many technologies may be “cleansed” of the character of radical monopoly simply by removing the state – here properly understood to encompass the large industrial corporations as well as government; and second, that perhaps as many technologies, however freely available they might become to you and me, would be quite pointless without radical monopoly, as they arose and exist mainly for the sake of cultivating radical monopoly. …

Download: Need Structures And Technological Development [PDF]

What if the best thing we could do for our children is just to leave them alone? Jay Griffiths on why modern parenting is making our children miserable

I felt as if I were an unwilling accomplice to torture. Echoes of the victim’s screams rang off the varnished walls. The door, tight shut though it was, could not block the cries of panic. A baby, alone and imprisoned in a cot.

The baby’s mother was visibly disturbed, too, pale and tearful. She was a victim herself, preyed on by exponents of controlled crying, or Ferberisation – that pitiless system, cruel to them both.

Controlled. Crying. The words speak of the odious aim: a bullying system controlling the feelings of a baby. The mother had been told the situation was the reverse, that the baby was trying to force her will on the mother, but all I could see was a one-year-old demented by abandonment. One American mother wrote poignantly on the internet: “Is Ferberisation worth my heartache or am I truly torturing my child? It seems like cruel and unusual punishment.”

The idea is that babies can be “taught” to stop crying by being left to cry alone. A parent will occasionally check on them, but will neither pick up nor stay with the infant. In time, the baby will learn that crying doesn’t bring consolation and will cease the attempt. Parents are encouraged to schedule and limit the time they spend checking on the baby. Does the system work? Of course it does. That is hardly the question. The real issue is why would such a thing be promoted? Why would it ever be accepted? What does it reveal about modernity’s priorities? And how does it suggest answers to the riddle of unhappy children?

Cuddled, snuggled and tended, most infants, throughout most of history, have known the world unlonely. Among the Tojolabal-speaking Maya people of Chiapas in Mexico, children in the first two years of life are always close to their mothers, instantly appeased with toys or milk, to prevent them ever feeling unhappy. For infants under one year of age among the Aché people – forest nomads in Paraguay – most daylight time is spent in tactile contact with their mother or father, and they are never set down on the ground or left alone for more than a few seconds. In India and many other parts of the world, children may share a bed with their mother until they are five.

Many parents’ reasons for using controlled crying can be summed up in one word: work. Parents who want “routines” are keen on controlled crying, says Gina Ford, a famous British advocate of the system, and she comments that babies who have been forced into a routine will later adapt easily to a school routine and, one presumes, be more malleable to a workforce system.

Yet whenever I have spent time in indigenous communities, I have never heard anything like the shrieks of fear and rage of the controlled-crying child. If an infant is satiated with closeness, commented the writer Jean Liedloff, then as an older child he or she will need to return to that maternal contact only in emergencies. Such an infant will grow up to be more self-reliant, not because of the scarcity of early contact (as the controlled-crying advocates argue) but precisely the opposite: from its abundance. By the age of about eight, the Aché children, who as infants were never alone, have learned how to negotiate the trails in the forests and can be fairly independent of their parents. In West Papua, I have seen how infants are held close and grow into children who are fiercely, proudly independent.

When children are older, the desire for freedom seems unquenchable. I recently gave a writing workshop in Kolkata for street children who had been temporarily corralled into a school where they were clearly well looked after and, in the main, happy. They thirsted for the one thing that the school would not allow them: freedom. “They want the freedom they knew on the streets,” a teacher said, “to go anywhere, any time.” In spite of the troubles on the street – poverty, abuse, hunger and violence – the children “keep running away”.

Once out of infancy, Native American children were traditionally free to wander wherever they wanted, through woods or water. “By the time he is five, he is grown up, beaming with health… delirious with liberty,” writes Roger P Buliard in Inuk, describing an Inuit boyhood. By about the age of seven, the boy handles knives and wants a rifle and a trap line, and from then on he “travels with the men, as hardy a traveller as any of them”.

When I spent some days reindeer herding with Sami people, I saw how the children were free not only out on the land, but indoors in the summer huts. They rummaged around for food, finding a strip of cooked reindeer meat or a freshly caught fish or a tub of biscuits, deciding what and when they would eat: a situation that averted that major source of family conflict – meal times.

Autonomy over food from a very young age seems a feature of childhood in many traditional societies. The Alacaluf children of Patagonia fend for themselves early, using a shellfish spear and cooking their own food from the age of about four. Very young Inuit children may use a whip to hunt ptarmigans, lopping off their heads with a flick of the wrist. Travelling through the highlands of West Papua among the Yali people, I often saw village boys going off together, bristling with bows and arrows, to hunt birds, catch frogs and roast them in fires they would build themselves.

Meanwhile, in England, an environmental play project called Wild About Play asked children what they most wanted to do outdoors, and the answer was to collect and eat wild foods, to make fires and cook on them. This is the sign of independence demonstrated by children everywhere, controlling their own food and their own bodies. It seems that modern Euro-American children have two unusual food-related experiences: first, they don’t have early autonomy with respect to food; and second, they do experience eating problems.

As for physical freedom, a few years ago I spent a day with children of the sea Gypsies, the Bajau people who live off Sulawesi in stilt houses set far into the water. The children were swimmers and divers, boaters and paddlers, rinsed with seawater night and day until they seemed half-human, half-otter. I asked what their childhood was like. The answer was immediate: “Children have a happy childhood because there is a lot of freedom.” If happiness is a result of freedom, then surely the unhappiness of modern western children is caused in part by the fact that they are less free than any children in history.

I was struck by the obvious happiness of the Bajau children: spending the whole long afternoon with about 100 of them, not one was crying, cross, unhappy or frustrated. I can’t imagine spending an afternoon with 100 European or American children and not once hearing a child cry.

In Europe, one country seems to have honoured the relationship between freedom and childhood happiness in a way that the sea Gypsy children would have understood: Norway. A land of lakes and fjords, a country that has enshrined in law an ancient right to canoe, row, sail and swim, to walk across all land (except private gardens and tilled fields) in a freedom known as Allemannsretten, “every man’s right”, the right to roam.

In 1960, the American psychiatrist Herbert Hendin was studying suicide statistics in Scandinavia. Denmark (with Japan) had the world’s highest suicide rate. Sweden’s rate was almost as high, but what of Norway? Right at the bottom. Hendin was intrigued, particularly since the received wisdom was that Denmark, Sweden and Norway shared a similar culture. What could possibly account for such a dramatic difference? After years of research, he concluded that reasons were established in childhood. In Denmark and Sweden, children were brought up with regimentation, while in Norway they were free to roam. In Denmark and Sweden, children were pressured to achieve career goals until many felt they were failures, while in Norway they were left alone more, not so much instructed but rather simply allowed to watch and participate in their own time. Instead of a sense of failure, Norwegian children grew up with a sense of self-reliance.

Danish children, the study showed, were over-protected, kept dependent on their mothers and not free to roam. For Swedish children, a common experience was that, in infancy, just when they needed closeness, what they got was separation and a sense of abandonment while, in later childhood, just when they needed freedom, what they got was far too much control. Norwegian children played outdoors for hours unsupervised by adults, and a child’s freedom was “not likely to be restricted”. They had more closeness than Swedish children at an early age, but then more freedom than both Danish and Swedish children at a later age, suggesting that closeness followed by freedom is likely to produce the happiest children.

Unfortunately, in the decades since Hendin’s work, as Norway became more centralised and urbanised, childhood altered. Norwegian children now spend more time indoors in sedentary activities, such as watching television or DVDs and playing computer games, than they do outdoors. The suicide rate is now far higher.

In Europe and America alike, many kids today are effectively under house arrest, with 80% of them in the UK complaining that they have “nowhere to go”. It’s about four o’clock in the afternoon, you’ve got a couple of quid in your pocket but not a lot more. You’ve knocked off for the day and you’d like to be with your mates. The cheap cafes will be closed in an hour, you can’t afford restaurants and you are not allowed in “public” houses. You tell everyone who will listen that you don’t want to cause trouble – you’d just like somewhere that is dry, well lit and safe, where you can hang out and chat. So you go to bus shelters and car parks and the brightly lit areas outside corner shops. And then you are driven off as if you were vermin. The UK seems to be leading the way in how not to treat children.

A plan to erect a netball hoop on a village green in Oxfordshire was blocked “because residents didn’t want to attract children”. In west Somerset, an eight-year-old girl was stopped from cycling down her street because a neighbour complained that the wheels squeaked. In one survey, two-thirds of children said they liked playing outside every day, mainly to be with friends, but 80% of them have been told off for playing outdoors, 50% have been shouted at for playing outside and 25% of 11- to 16-year-olds have been threatened with violence by adults for… for what? For playing outdoors, making a noise, being a nuisance.

Saddest of all, it works. One in three of the children said that being told off for playing outside does stop them doing it. If there is one word that sums up the treatment of children today, it is enclosure. Today’s children are enclosed in school and home, enclosed in cars to shuttle between them, enclosed by fear, by surveillance and poverty and rigid schedules.

In 2011, Unicef asked children what they needed to be happy, and the top three things were time (particularly with families), friendships and, tellingly, “outdoors”. Studies show that when children are allowed unstructured play in nature, their sense of freedom, independence and inner strength all thrive, and children surrounded by nature are not only less stressed but also bounce back from stressful events more readily.

But there has been a steady reduction in open spaces for children to play. In Britain, children have one-ninth of the roaming room they had in earlier generations. There has also been a reduction in available time, with less than 10% of children spending time playing in woodlands, countryside or heaths, compared with 40% a generation ago. Younger children may be enclosed on the grounds that adults are frightened for them, and older children because adults are frightened of them.

In the Amazon, I’ve seen five-year-olds wielding machetes with deftness and precision. In Igloolik, in the Arctic, I’ve seen an eight-year-old take a knife and carve up a frozen caribou without accident. In West Papua, I’ve known youngsters of 12 or 13 with such physical capability and confidence that, when asked to be messengers, they completed a mountain run in six hours – a journey that had taken me and the guides a day and a half.

This is not only a matter of physical competence: the freedom that Inuit children traditionally experienced made them into “self-reliant, caring and self-controlled individuals”, in the words of one Inuit person I met in Nunavut in Canada. It gave them courage and patience.

Children need wild, unlimited hours, but this time is in short supply for many, who are diarised into wall-to-wall activities, scheduled from the moment they wake until the minute they sleep, every hour accounted for by parents whose actions are prompted by the fear their child may fall behind in the rat race that begins in the nursery. Loving their child, not wanting them to be lifelong losers, parents push them to achieve through effective time-use. Society instils a fear of the future that can be appeased only by sacrificing present play and idleness, and children feel the effects in stress and depression.

In many traditional cultures, however, children are held to be the best judges of their own needs, including how they spend their time. In West Papua, one man told me that as children, “We would go hunting and fishing and just come home when we heard the crickets.” In the children’s tipi where part-Cherokee man James Hightower spent so many hours of his childhood, games might be played until four in the morning. “The Indian is not like civilised children,” he recalls, “having a certain time to eat and sleep.” (In his mouth, the term “civilised” is not a compliment.)

“When we’re working, we just don’t have time to be bothering the kids,” Margrethe Vars, a Sami reindeer herder, told me. She broke off to drag on her cigarette, so her words, imitating European parents, literally came out smoking: “Have you washed your hands? Now you must eat.” She pulled a face: to her, children’s freedom was not only a right but a relief all round. As the summer stretched out in one long day, the Sami children would be up all “night”, and no one minded because every parent shared the view that children were in charge of their own time. So the early hours – bright with midsummer sun – would see the children revving up quad bikes, watching the reindeer, tickling each other or falling asleep.

“Here we sleep when we are tired, eat when we are hungry,” Vars said. “But for other societies, children are very organised. Timing is everything: when to eat and sleep, making appointments to visit friends…” She winced at the thought of the micromanagement. The Sami way produced powerfully positive results, not only in the reduction of petty conflict, but also in something intangible and vital. Their children would grow up more self-reliant, less obedient to outside pressure.

For the Wintu people of California, so deep is their traditional respect for the autonomy of the will that it suffuses the language itself. In English, if you “take a baby” somewhere, there is a sense of implicit coercion. The Wintu language cannot say that: it must phrase it as, “I went with the baby.” “I watched the child” would be, “I watched with the child”. The Wintu couldn’t coerce someone even if they wanted to: language won’t let them. When a Wintu child asks, “Can I…?” they are not asking for permission from an individual parent, but for clarification about whether wider laws allow it, so a child does not feel at the mercy of the will of a single adult with rules that can seem capricious and arbitrary.

Take a step back for a moment. Letting children have their own way? Doing just what they like? Wouldn’t that be a total disaster? Yes, if parents perform only the first half of the trick. In the cultural lexicon of modernity, self-will is often banally understood as brattish, selfish behaviour. Will does not mean selfishness, however, and autonomy over oneself is not a synonym for nastiness towards others – quite the reverse. Ngarinyin children in Australia traditionally grew up uncommanded and uncoerced, but from a young age they learned socialisation. That is the second half of the trick. Children are socialised into awareness and respect for the will and autonomy of others, so that, when necessary as they grow, they will learn to hold their own will in check in order to maintain good relations. For a community to function well, an individual may on occasion need to rein in his or her own will but, crucially, not be compelled to do so by someone else.

Among Inuit and Sami people, there is an explicit need for children to learn self-regulation. Adults keep a reticent and tactful distance. A child “is learning on his own” is a common Sami expression. Sami children are trained to control anger, sensitivity, aggression and shame. Inuit people stress that children must learn self-control – with careful emphasis. The child should not be controlled by another, with their will overruled, but needs to learn to steer herself or himself.

Will is a child’s motive force: it impels a child from within, whereas obedience compels a child from without. Those who would overrule a child’s will take “obedience” as their watchword, as they fear disobedience and disorder and believe that if a child is not controlled, there will be chaos. But these are false opposites. The true opposite of obedience is not disobedience but independence. The true opposite of order is not disorder but freedom. The true opposite of control is not chaos but self-control.

Translations for this article:

• Portuguese, Por que os pais deveriam deixar seus filhos em paz.
• Italian, Perché i Genitori Dovrebbero Lasciare in Pace i Figli.

Every few months, the US government closes in on its self-imposed “debt ceiling.” Every few months the American public gets treated to theatrics on whether or not that ceiling should be “raised,” complete with hysterical projections of doom if the politicians aren’t allowed to spend as much money as they want, on anything they might happen to covet. And every few months the ruling parties agree to let themselves borrow more money instead of living within their means.

Why don’t America’s politicians balance their collective checkbook? Because they don’t believe they have to.

It’s not that it would be difficult. In fact, it would be quite easy.

The Congressional Budget Office estimates that for fiscal year 2014 the US government will spend $514 billion more than it steals in tax revenue. But that government could cut its military spending by $514 billion and still be the third largest “defense” spender in the world (behind only Russia and China).

In reality, as nation-states go, the US shouldn’t even be in the top 10. It has no current (or likely near-future) enemies on its borders. It’s separated from its most likely and dangerous enemies by thousands of miles of ocean, tundra or other nation-states. And cutting its military spending to a not quite so insanely unreasonable level would make it less, not more, likely to embark on the kinds of global misadventures its spendthrift politicians pursue as an obsessive hobby.

So let’s dispense with the fiction that the US government faces a dilemma or conundrum of some sort to which increased indebtedness is the only plausible response. It’s just plainly untrue. It could balance its budget today and be better off for it, not just fiscally but in nearly every other respect as well.

So again: Why don’t they?

And again: Because they don’t believe they have to.

After all, they’ve been getting away with overtly stealing double-digit percentages of your work and wealth, and borrowing similar amounts from lenders  (who expect them to keep stealing that much and more to make payments) for decades, without apparent penalty.

And just like all freeloaders and junkies, they’ve convinced themselves that the party never has to end, that they can just keep on keeping on and wheedle or beat ever more money out of us as needed.

Heck, they’ve even written a “no crushing our buzz” clause into the US Constitution: “The validity of the public debt of the United States, authorized by law … shall not be questioned.”

Horse-hockey. They’ve amassed such a mountain of debt at this point that no reasonable person ever expects it to be paid off, and the notion that that debt is “public” is pure nonsense. We’re not the ones kiting checks. They are. We’re not responsible for the fortunes of their criminal enterprises; it’s all on them.

At some point, both the debt and the politicians who incurred it will be not just “questioned,” but repudiated — by the rest of us. And the sooner the better.

Translations for this article:

• Portuguese, Por que os políticos nunca equilibram suas contas?
• Dutch, Waarom houden Amerika’s politici hun financiën niet bij?

MR. EDITOR: [by “B”]

The discussion which occurred between Mr. Burleigh and Rev. Mr. Kimball, at the recent meeting at Framingham, though brief, was quite interesting and suggestive, and I had hoped to see the subject more particularly alluded to in THELIBERATOR. A doubt as to the correctness of Mr. Burleigh’s position occurred to me, which perhaps will need only to be presented to be removed. With your permission, I will present it.

Mr. Kimball gave it as his opinion, that the exercise of the elective franchise was one proper channel for anti-slavery action. Mr. Burleigh dissented, for the reason that in voting, the man acts not merely as an individual, giving expression to his opinions in political affairs, but as a sovereign, participating in and sustaining the government; and if the government is guilty of any crime or wickedness, he is guilty to the extent of his participancy. Therefore, voting under the American government, which upholds the great crime of slavery, is wrong.

Granting the argument to be sound, does it not hold good as to any government which tolerates any evil, small or great? And as no immaculate government is likely to arise at present, how can a conscientious man act as a citizen under any circumstances? Human government, for some purpose, is admitted to be necessary; shall we leave it to be conducted wholly by men not troubled with a conscience? Is the no-government theory a cardinal doctrine with Garrisonians?

Again, Mr. Burleigh is reported as saying, that ‘by the act of suffrage, a virtual promise is given that obedience shall be rendered to all the acts which the representative shall help to enact.’ Perhaps not, if we recognise that ‘higher law which is above the Constitution.’ So far as the enactments are right and proper, we agree to obey; but if they are morally wrong, we are bound by a higher covenant to disobey.

I would like to suggest another thing, quite distinct from the above. In arguing the question of anti-slavery, I am sometimes met with this reply: ‘Yes, slavery is wrong; I agree with all you say against it; but there are greater evils than slavery; war is a greater evil;’ – and a vivid imagination may picture the horrors of war so that one is almost persuaded that it is so. I would like to see the question considered in your columns, whether slavery or war is the greater evil; and if war is the greater, and a dissolution of the Union, or an attempt to abolish slavery, is likely or certain, so far as human foresight can determine, to result in war – in which course lies the path of duty?

REMARKS. [by Garrison]

1. We think Mr. Burleigh was unquestionably correct in his statement, that the voter at the polls ‘acts not merely as an individual giving expression to his opinions in political affairs, but as a sovereign, participating in and sustaining the government,’ according to its organic character; and to this extent he is to be held responsible for whatever of criminality or sin is involved in any of its requirements. The interrogation of the apostle (Rom. vi. 16) is exactly to the point: ‘Know ye not, that to whom ye yield yourselves servants to obey, his servants ye are to whom ye obey; whether of sin unto death, or of obedience unto righteousness?’ Every voter virtually inscribes on his ballot the Constitution of the United States – he votes for a candidate whom he empowers and expects to take the oath of allegiance to that Constitution, in all fidelity, and without any mental reservation whatever – and, consequently, he is to be held answerable for all that is embodied in that instrument, even though he may not only dislike some of its provisions, but may be endeavoring to effect a modification of it, so as to make it conform to his ideas of moral rectitude; for he agrees to sustain it as it is, in spite of his objections, until it be amended by a constitutional process, and so consents to wrong-doing for the time-being, rather than to lose his vote.

2. It does not follow, nor did Mr. Burleigh mean to affirm, that ‘if the government is guilty of any crime or wickedness,’ the voter is to be held responsible for it; because it may be an act of sheer ‘border ruffian’ usurpation, as in the case of Pres. Pierce, in his nefarious treatment of Kansas. But if there be any ‘crime or wickedness’ in the organic nature of the government – in its principles or measures – in any of its stipulations or exactions – then to vote to uphold it, or to elect another to take an oath to see all its provisions faithfully executed, is to be a participator in the guilt thereof – all metaphysical shuffling to the contrary notwithstanding.

3. It follows logically, and as a matter of sound morality, that if ‘the American government [constitutionally] upholds the great crime of slavery,’ voting under it is wrong; and it is wrong for this among other reasons – knowing the pro-slavery compromises contained in the Constitution – we refuse to touch the ballot, stained as it is with the blood of four millions of slaves.

4. But our correspondent inquires, ‘Granting the argument to be sound, does it not hold good as to any government which tolerates any evil, small or great?’ As we are talking about crime and sin, we understand him to mean any moral evil, and therefore answer his question in the affirmative.

5. But, says our correspondent, ‘as no immaculate government [i. e., none that is not organically unjust] is likely to arise at present, how can a conscientious man act as a citizen under any circumstances?’ We, too, ask the same question, and should like to be shown how he can so act, and keep his conscience clean. We think he cannot.

6. What, then, is to be done? ‘Human government, for some purposes,” says ‘B.,’ ‘is admitted to be necessary.” But, surely, a wicked government is not necessary; and when any one is inherently so, it forfeits its right to exist even for an hour. Indeed, properly speaking, there is but one government, – and that is not human, but divine; there is but one law, – and that is ‘the higher law’; there is but one ruler, and he is God, ‘in whom we live, and move, and have our being.’[Online editor’s note: Acts 17:28; derived in turn from Epimenides’ Hymn to Zeus (6th c. BCE). – RTL] What is called human government is usurpation, imposture, demagogueism, peculation, swindling and tyranny, more or less, according to circumstances, and to the intellectual and moral condition of the people. Unquestionably, every existing government on earth is to be overthrown by the growth of mind and a moral regeneration of the masses. Absolutism – limited monarchy – democracy – all are sustained by the sword – all are based upon the doctrine that ‘might makes right’ – all are intrinsically inhuman, selfish, clannish, and opposed to a recognition of the brotherhood of man. They are to liberty what whiskey, brandy, and gin are to temperance. They belong to ‘the kingdoms of this world,’ [Online editor’s note: John 18:36; Revelation 11:15. – RTL] and are in due time to be utterly destroyed by the brightness of the coming of Him ‘whose right it is to reign,’ [Online editor’s note: Ezekiel 21:27. – RTL] and by the erection of a kingdom which cannot be shaken. [Online editor’s note: Hebrews 12:27. – RTL] They are not for the people, but make the people their prey; they are hostile to all progress; they resist to the utmost all radical changes. All history shows that Liberty, Humanity, Justice and Right have ever been in conflict with existing governments, no matter what their theory or form.

7. But, ‘shall we leave government to be conducted wholly by men not troubled with a conscience?’ This is only to ask, ‘shall we leave the dead to bury their dead?’ [Online editor’s note: Matthew 8:22, Luke 9:60. – RTL] Or, in another form, – ‘may we not do evil that good may come?’ [Online editor’s note: Romans 3:8. – RTL] – ‘will not the end sanctify the means?’ Is it not still true, that ‘wheresoever the carcass is, there will the eagles be gathered together’? [Online editor’s note: Matthew 24:28, Luke 17:37. – RTL] Is it not paradoxical to talk of a man who is ‘troubled with a conscience,’ swearing to be loyal to a government which he sees and admits to be essentially unrighteous? What else can he do but to ‘come out, and be separate, and not touch the unclean thing’? [Online editor’s note: Isaiah 52:11, 2 Corinthians 6:17, Revelation 18:4. – RTL] His kingdom is within. [Online editor’s note: Luke 17:21; cf. Thomas 3, 113. – RTL]

8. ‘Is the no-government theory a cardinal doctrine with Garrisonians?’ – Answer – the term ‘Garrisonians’ is applied to those who agree with us in our views of slavery and the pro-slavery character of the Constitution. These are not agreed on the question of government, per se, but entertain different views in regard to it. They are generally united in the sentiment of ‘no union with slaveholders,’ and therefore advocate a dissolution of the existing Union, as uncompromising and consistent abolitionists. Again we reply – the term ‘no-government’ is a nickname, a misnomer, a misrepresentation, a blunder, a caricature, resorted to by the enemies of peace. We neither use it, nor advocate it, nor believe in it; but exactly the reverse. Our ‘theory’ is, that what is popularly called government is either a chain of iron or a rope of sand, – either despotic or licentious, or both, – and hence, must ultimately perish; and that men are to be guided, not by brute force or penal law, but by the spirit of love, justice, mercy, and good will to the whole human race, ‘without partiality and without hypocrisy.’ [Online editor’s note: James 3:17. – RTL] We believe in the sacredness of human life, human happiness, human liberty, and in ‘ceasing from man, whose breath is in his nostrils,’ [Online editor’s note: Isaiah 2:22. – RTL] and relying for safety and protection on an infinite arm. At the same time, we are far from discarding those arrangements and regulations of society which involve no violation of the principles we have laid down, and which, in the nature of things, are necessary to the welfare and comfort of every community.

9. Politically speaking, whoever swears to maintain the U. S. Constitution is precluded from making any appeal to the ‘higher law,’ to the subversion or nullification of any portion of that instrument. His oath presupposes that he has scrupulously analyzed the Constitution, and, finding nothing in it which he regards as in violation of right and justice, he consequently, with a clean conscience, agrees to uphold it. If, however, at any time, he believes it to be, in whole or in part, contrary to the moral law, his duty is plain – to refuse to take the oath of allegiance, and, appealing to the ‘higher law,’ decline to hold office in the government. But while he consents to it, and occupies any station in virtue of it, the Constitution is to be ‘the paramount law’ of his conscience, as well as of the land which adopts it.

10. It is not the question whether War or Slavery be the greater evil. They are both the scourges of the human race, and for ever to be repudiated. Slavery is a state of war continually, and the nursery of civil and servile revolts. Its abolition is essential to the peace and repose of the land. So long as the North gives to it religious fellowship and governmental coöperation, so long will the war spirit continue to abound and increase. Her duty is peaceably to withdraw from the Union, leaving the South to assume all the responsibilities of her bloody slave system, and never doubting that a glorious result will follow.

[Disclaimer. This is a paid review. I was assured by Jeff Graubart that negative reviews were fine – he expected only honesty. And I received 40% of the payment up front, with the rest to come after writing the review.]

Graubart’s vision of a future society, like the whole of Gaul, is divided into three parts:

We need free markets on steroids and we need universal entitlement on steroids. If you can’t see past what appears to be an absurd contradiction, then you haven’t put that together with the third thing that is essential for the survival of the planet: reproductive control: parents must pay for their child’s entitlements before they are allowed to give birth or adopt. These are outlined in the fundamental relations.

For Graubart, these three basic features of his proposed society are a three-legged stool. Without all three of them, it won’t stand. Remove any one, he warns, and the result will be barbarism.

The first feature, the free market itself—the maximum possible degree of economic freedom—is a goal for Graubart in it’s own right. But without a universal entitlement, a totally free and unregulated market will lead to barbarism through the concentration of capital, technological unemployment and mass impoverishment, and eventually class war and revolution. And without reproductive control, the universal entitlement will lead to an underclass breeding out of control for the sake of the additional entitlement money their kids will bring into the household, and eventually to mass impoverishment and social bankruptcy from overpopulation.

I don’t see either of these outcomes as necessary or inevitable absent his proposed remedy, and therefore for me the chain of logic by which the three parts of his agenda cohere into a whole is weak (as I will explain later in this review).

Graubart explains the basic principles in more detail with the acronym AFFEERCE, with AF standing for Alternative Family, FE for Free Enterprise, E for (Universal) Entitlement, RC for Reproductive Control and E for Enlightenment.

Alternative Family does not mean you have to run off and join a commune or have a 5-way sexual relationship. You have every right to structure your family on 1 man + 1 woman + children. Or you can choose to live alone….

Free Enterprise means laissez-faire. It means government keeps its hands off business. It means no minimum wage and no inflation. It means no corporate income tax of any kind. It means the marketplace will determine if monopolies should form and the effectiveness of collusion. It also means no civil rights protection and no right to a job….

Universal Entitlement – …Entitlement is not based on need. A billionaire receives the same entitlement for food and housing as a pauper. Each person in a family of 50 receives the same dollar
amount for food and housing as a person who lives alone.

Personal entitlements include nutritious food, safe shelter, unlimited free education, and quality medical….

Reproductive Control – Families must pay the present value for a lifetime of entitlements before they are allowed to adopt or raise a child. This is approximately $600,000 but it is tax free. However, this goal might not be met for a century or more. In the beginning, families might pay only half the cost of entitlement or $300,000 before being allowed to adopt or raise a child. Even this amount might be phased in over 100 or more years…. Regardless of cost, if the parents cannot pay, the child will be placed with a family that can afford the child….

Enlightenment – In a free society, all religions, spiritualties, beliefs or lack thereof, are welcome. The AFFEERCE enlightenment is a reliance of the truths in nature following the deconstruction of postmodernism….

The postmodern age will lead to the synthesis between objectivism and subjectivism; an age of the union of science with spirituality, of mind and body, of freedom and entitlement, of Eros and Agape.

About the last item, Enlightenment, I have little to say, because metaphysics and epistemology are pretty far outside the subject matter I feel competent to discuss. Before I finish up with a detailed critique of the logical connections between the three major parts of Graubart’s agenda, though, I will take some time to comment on the other individual components of AFFEERCE with my own positive and negative observations.

Graubart’s Alternative Families are quite similar to what I’ve written about elsewhere as “primary social units.” Rather than “Alternative Families,” I think “households” might be a more apt description, since many of them bear a closer resemblance to what we would think of as multi-family cohousing projects. They exist mainly as economic expedients for pooling incomes and risks, and reducing costs of living by minimizing the unused spare capacity of housing and household capital goods that normally exists when separate nuclear family households predominate. Of course large Alternative Families can also function as polyamorous sexual units or group child-rearing institutions, but they don’t have to. And people can still form families based on one couple with children, but the economic incentives in Graubart’s society would be strongly in favor of larger household units.

Graubart’s picture of how a Free Enterprise economy would work is, in my opinion, one of the weaker parts of his book.

The main way his Free Enterprise economy deviates from the real article is the VOS:

In AFFEERCE, a government agency, The Bureau of Standards, through volunteer standards groups, will coordinate industry standards, and require that industries either adopt the standards of the industry, or display in a consistent way across all industries, those standards that are violated, the VOS. Omission of violated standards from the VOS and failure to properly display or get customer sign-off on the VOS constitutes fraud. The VOS is a legal document that protects against liability, so businesses will pay inspection agencies to certify their VOS.

Once you have properly revealed how your entity deviates from acceptable standards, you no longer are liable for that deviation.

Each category of enterprise has an associated set of standards determined by volunteer consumer and business standard’s groups (VSG’s) whose members are members of these enterprises or engage in the marketplace with these enterprises. The Bureau of Standards coordinates these VSG’s, and makes suggestions for consistency across types of enterprises, but does not control the set of standards.

Secondly, any business that does pollute would have to indicate the extent of its pollution on its VOS. Should the pollution markedly exceed the amount disclosed, that would likely constitute fraud. The VOS is a public document that limits liability. There are no officials to bribe or arcane EPA regulations to hide behind.

This strikes me as a poor alternative to the use of a fully liberated tort law and a wide variety of self-organized reputational systems for punishing corporate malfeasors. But Graubart’s attitude toward such approaches is quite dismissive.

The point is that there are literally billions of cases where fraud is ambiguous. Certainly an industry can collude on a set of standards, and even display an “Underwriter’s laboratory” type of seal, but there is nothing to prevent another business, or even one of the companies from producing the product at less cost by violating those standards and selling to customers who have neither the time nor energy nor inclination to study labels.

The argument that bad practices will quickly destroy a business is false. Companies change names. People are mobile and do not spend their time researching companies. Even major news exposés can be lost amongst the information overload….

Graubart, in critiquing the standard libertarian vision of a free market regulatory state, frequently refers to the “objectivist” position on this or that, seemingly taking the Randians as a stand-in for libertarianism in general. I get the impression that he has little exposure to the free market tradition or libertarian literature outside the Objectivist milieu, and in particular I get no indication that he’s familiar with such writers on the mechanics of a free market regulatory regime as David Friedman or Morris and Linda Tannehill.

I think Graubart underestimates the extent to which a liberated tort law, in its full vigor and without liability caps and other forms of right-wing “tort reform” promoted by business lobbyists, would strike fear into the hearts of potential defrauders and malfeasants.

A genuinely libertarian common law of torts would restore the notions of liability that existed before state court judges changed the law to make it more business-friendly in the early-to-mid-19th century (as recounted by Morton Horwitz in The Transformation of American Law). Before these judge-made modifications to the classical law of torts, it wasn’t necessary to prove negligence. If you did something that resulted in an unforeseen harm to your neighbor, you were liable for it, regardless of intent. And “standard business practices” weren’t a defense—if a new business imposed negative externalities on neighbors who were already there, it was liable for them.

The 20th century regulatory state further weakened what civil damages were available to punish corporate wrongdoers. In many cases regulations like the EPA’s environmental standards were dumbed-down, least-common-denominator standards that preempted common law standards of liability and created safe harbors against civil liability. So a company that destroys the watershed of an entire region through mountaintop removal, or poisons the air and water of surrounding communities and creates a cancer cluster by fracking, can say “Hey, we meet the EPA regulatory standard” and use that as a shield against liability in court.

I also think—something about which I’ll have more to say below in my evaluation of his argument for the necessity of the Universal Entitlement—that Graubart underestimates how drastically a genuine free market economy would differ from our present one in structural terms. He seems to envision an economy still characterized by lots of corporate firms and an atomized society with lots and lots of anonymous transactions in the cash nexus.

But I believe that, absent state subsidies to long-distance transportation and economic centralization, and to large-scale enterprise and hierarchy, the pressure would be overwhelmingly toward decentralization and relocalization, and more demographically stable localities. The great bulk of manufactured items that are now imported from large factories across the United States or sweatshops in China would be produced in small garage factories with the surrounding neighborhood or community as their primary market. A great deal more—especially in the way of foodstuffs and clothing—would be produced in the informal economy of the large household itself, or informal barter and gift networks of multiple households. Rather than one-off transactions on the anonymous cash nexus, most economic exchange would overlap with the social ties of neighborhood and community, with people producing for customers they know by face and name.

In such a society, where most enterprises depended on repeat business from their neighbors, and selling dangerous or tainted goods that resulted in harm would get you assessed damages by a jury of your angry neighbors, both reputational and tort mechanisms would carry a lot more weight.

The Universal Entitlement is Graubart’s version of a proposal that’s been around for a long time (basic income, guaranteed minimum income, negative income tax, citizen’s dividend, social credit, etc.).

And I find it attractive, at least as a transitional measure. As Graubart points out himself, a guaranteed minimum income would do away with the entire welfare state bureaucracy at federal, state and local levels, with its enormous administrative costs. But I find it far more attractive when packaged, as it is in proposals by the Geolibertarians, with a funding system based on taxing economic rents (primarily the site value of land) and negative externalities (i.e. Pigovian taxes on pollution and resource extraction). A libertarian society in which the welfare state was replaced by a universal basic income funded by a tax on unearned wealth, the regulatory state was replaced with prohibitive taxes on emissions of CO2 and toxic chemicals, and the market was otherwise completely free, would at least be a huge step in the right direction.

So I’m somewhat surprised that Graubart reinvents the wheel with a funding mechanism based on a 70% flat tax on consumption, instead of these other, more attractive funding proposals.

Of course Graubart’s flat tax isn’t nearly as regressive in practice as it sounds. First of all, it’s a tax only on consumption spending over and above the Universal Entitlement, which is slightly over $1000 a month (and includes food, housing and healthcare among other necessities). So for those in the bottom three quintiles of the population, at least, a 70% tax on consumption over $1000 a month would probably be less than the total federal and state income tax, Social Security and Medicare payroll tax, and state and local sales and property taxes, that they’re paying now.

And the consumption tax is only a temporary expedient for paying the Universal Entitlement while Reproductive Control (enforced by a requirement to pay the entire capitalized lifetime value of a future child’s Universal Entitlement, $600,000, up front before having a child) is phased in. As Reproductive Control is implemented—Graubart proposes to gradually work up to the full $600,000 per child over many years—the consumption tax will be steadily lowered and replaced by revenue from the payment for having children.

The Universal Entitlement is deposited into an account that can be accessed for spending via a universal biometric identification system. An individual, say, buying food or clothing, or paying rent from this account simply swipes their hand, speaks or submits to a retinal scan to make a cashless payment. The Entitlement cannot be transferred from one person to another, with one big exception: between members of an Alternative Family. The Alternative Family, with its formal legal charter and bylaws, is the official building block of the AFFEERCE society, and all its members’ Entitlements are shared within the family unit as a condition of membership.

The Transition. One thing I like about this book is, it’s one of those visions of the future that falls within the category of (in the words of the Wobbly slogan) “building the structure of the new society within the shell of the old.

Graubart’s book, first and foremost, is an appeal for investors (see his website at http://www.affeerce.org/). He intends to build lots of miniature local AFFEERCE societies as business corporations with joint land trusts as a platform for member households and business enterprises. These nuclei he calls “…AFFEERCE nations,” or “AFFEERCE enclaves that develop under the current government of the United States.”

Of course, the third and fundamental problem of all movements is how do we bring such a society about? There is only one sure way: a business plan. Relying on both the profit motive and the AFFEERCE spirit, AFFEERCE will grow into a corporation so large and powerful, it will swallow Washington whole. I promise you, when the time for capitulation comes, the people of the United States will vote nearly unanimously to turn power over to the AFFEERCE Nations. And until that fateful day, the United States Government and the AFFEERCE Nations shall coexist in complete harmony.

Keep in mind that AFFEERCE nations will form within the United States of America and be subject to its laws: most importantly, the code of the Internal Revenue Service. While our tax lawyers will utilize every loophole, and our representatives will work to make the code as favorable as possible for the AFFEERCE nations to flourish, AFFEERCE is built on honesty. The VIP will issue 1099s for every AFFEERCE citizen, and maintain automatic withholding into a dollar-denominated tax account….

…In pre-capitulation AFFEERCE, the AFFEERCE nation is a privately held corporation….

These AFFERCIANADO pioneers will form an AFFEERCE land corporation by purchasing shares and electing a board. The land corporation can buy contiguous foreign land, register it as AFFEERCE territory, optionally develop the land, and sell AFFEERCE territory to citizens (encumbered by an AFFEERCE lien).

I find this very attractive. The classic example of this approach was Ebenezer Howard’s Garden Cities, to be built on cheap colonized land in the countryside, and developed with funds from a land value tax on the appreciating real estate values. Dmytri Kleiner’s “Venture Communism” takes a similar approach. So does the movement in Vinay Gupta’s short story “The Unplugged,” based on “buying in at the bottom” and building a comfortable subsistence lifestyle on the superior efficiency of small-scale high technology. The idea of an alternative economy movement forming as a voluntary association within the existing capitalist society, relying for its inputs primarily on the waste byproducts of inefficient corporate dinosaurs and doing a far better job efficiently extracting value from them, and growing within the belly of the beast until it ultimately takes over from within, is something that I find—to repeat—very attractive.

My main difference from Graubart on this score is I don’t think it’s necessary for such an alternative economy to ever take over the state or other institutional framework of the old society. No need for capitulation, or for the United States to formally amend the Constitution to make the new economic order the law of the land. The state and the large corporation exist for purposes that will be obsolete in a free society with cheap small-scale production technology, horizontal network communications and peer-to-peer organizations.

The Logical Necessity for the Universal Entitlement. The Universal Entitlement is necessary in a free market economy, Graubart says, because without it the natural trends of the free market will impoverish the great majority of the population and create an army of paupers ready to pull society down around their ears. “Universal entitlement allows for a free market economy, and it is the only thing that does.” The reason is simple technology:

there is no question that given enough innovation, a single skilled human being can operate a machine that will do the work currently done by tens of thousands of workers. Massive wealth will be created. Where should it go? To build prisons for the unemployed underclass whose clergy instructs them to reproduce?

Graubart’s technological unemployment argument, I believe, is based on a misunderstanding of technological history. Technological unemployment, like the wage system itself, presupposes a specific technological model: capital-intensive mass production, using expensive, product-specific machines—conventional factories, in other words, in just about every particular except the radically reduced need for people to work in them.  They seem to be talking about something like a GM factory, with microcontrollers and servomotors in place of workers, like the Ithaca works in Vonnegut’s Player Piano.   If such expensive, capital-intensive, mass-production methods constituted the entire world of manufacturing employment, as they were in 1960, then the Graubart’s technological unemployment scenario would indeed be terrifying.

But in fact the technological changes of recent years are destroying the material rationale not only for the wage system and factory system, but for technological unemployment. That rationale, originally, was a technological shift from individually affordable, general-purpose craft tools to extremely expensive, specialized machinery as the dominant means of production. Such machinery could only be afforded by rich people, who hired poor people to work it for them. The revolution in desktop information technology and cheap garage-scale digital machine tools is reversing this trend: We’re going back to (a much higher-tech version of) cheap, general-purpose craft tools.

When the predominant means of production are individually affordable, the very distinction between being “employed” and “unemployed” becomes meaningless. A larger share of work becomes ad hoc and project-based rather than employer-based, and indeed a great deal of work shifts back to its original understanding as something you do to feed yourself rather than something you’re given by an employer.

At the same time, the terminal crises of the corporate economy and the technological destruction of its material rationale are already to many of the kinds of changes that Graubart associates with his Alternative Families.

Large families allow some members to take on risk and provide a greater division of labor for startups…. Each additional family member allows a more efficient use for the total housing, food and sundry entitlements, thereby creating wealth.

Most importantly, that which will render all of Marx’s arguments on alienation and commodity fetishism moot is the freedom of the alternative family in an AFFEERCE society. Because of the entitlements, the division of labor and the economies of scale, every AFFEERCE family is free to form their own society. Each individual has a right to work at their own speed. Labors of love can be turned into small profits that large industrial giants would never even consider. Communes receive huge food and housing entitlements every month and they are free to combine pagan ritual with the harvest and still make money. What is important to each of us takes center stage in our lives. We are the means of production, and we shall not be alienated from ourselves.

According to the neo-Marxist James O’Connor, in Accumulation Crisis, the historic tendency of capitalism, during cyclical crises, has been for unemployed and underemployed workers to shift a portion of their needs satisfaction to self-provisioning in the informal and household sector. And given that we’re now in a crisis that’s not cyclical but structual, there is a long-term shift toward increased satisfaction of needs through self-provisioning in the household and informal economy. As Ralph Borsodi showed eighty years ago, even then it was more economical in terms of total unit costs to grow and can one’s own food than to buy it at the supermarket, or to make one’s own clothing with a sewing machine. Since then the revolution in desktop information technology and tools for the home workshop has increased the share of production that can be undertaken at home, or in a neighborhood cooperative workshop with shared tools.

At the same time, the large household of an extended family or multiple families has a long history as a unit for pooling risks, costs and income. And in the years since we hit Peak Employment in 2000, there has been a drastic increase in multi-generational households.

I expect this only to rise in coming years, as both the state- and employer-based social safety net become hollowed out and are forced to retreat from social life. I expect a rise in primary social units like extended family compounds, multi-family cohousing projects, urban communes, neighborhood barter and sharing systems, intentional communities, friendly societies and lodges, mutual insurance systems, networked employment platforms like guilds and cooperative temp agencies, and a wide variety of other expedients, to replace the risk-, cost- and income-pooling functions currently provided by the state, employers and capitalist insurance policies.

I expect to see a society coalesce, over the coming decades, much like a high-tech version of the medieval peasant commune (e.g. the English open-field system or Russian mir), in which one is born into a primary social unit that supports its children and gives adults who choose to stay an aliquot share in the common productive land and access to the workshop, and either undertakes production in such facilities for common consumption or contributes income from an outside wage job in return for a guaranteed right to food and subsistence. In such a primary social unit (say a multi-family compound of twenty people) only a few might work at outside wage employment to earn the “foreign exchange” to buy goods available only on the cash nexus, others might work feeding the family by working in intensive raised-bed gardens or caring for chickens and guinea pigs, or working in the workshop. Surplus specialty crops or craft goods the household specializes in might be exchanged for other household surpluses in the neighborhood barter network.

In other words, the natural economic trends of shifting to an informal economy will replicate the effects of the Universal Entitlement.

As I argued above, I think Graubart drastically underestimates just how radically a genuine free market economy—one without state-enforced privileges, artificial property rights or artificial scarcities of any kind—would differ from our current one.

And while it will never be the case, as it is today, where the lower 40% of the population has .2 percent of the wealth in a truly free society, there is a level of inequality that has been shown to favor optimal success in business, science and economics. It is based on the work of Joseph Juran and named after Italian economist Vilfredo Pareto. The Pareto Principle shows that a natural and optimal inequality will tend to occur, where 20% of the population has 80% of the wealth…

Currently, the top 20% of the population has 93% of the wealth, not the Pareto 80%.

I don’t think Pareto was situated to make any such pronouncement, based on the observation of actually existing capitalism—a system in which the actual distribution of wealth reflects mainly rents on state-enforced artificial property, and the predominant model of business enterprise reflects massive state subsidies and entry barriers.

The elimination of direct and indirect rents on “intellectual property” (including the waste and planned obsolescence from the effect of patents on criminalizing modular designs with open-source replacement parts and ease of repair), the elimination of the portion of land rent that results from absentee title to vacant and unimproved land, the elimination of the portion of interest that results from entry barriers to cooperative banks and alternative barter currencies, the elimination of licensing, zoning and safety code barriers to running home microenterprises (micro-bakeries, hair salons, restaurants, daycare, unlicensed cab services, etc.) using the spare capacity of ordinary household appliances, legal barriers to self-built vernacular housing, etc., would both drastically lower the income of the top tier of the economy and also drastically lower the threshold for comfortable subsistence.

Far from technological employment, I think technological changes will lead to a society where employers have trouble hiring workers for enough hours or at a low enough wage to make a profit, because they face the nightmare scenario where they’re competing with the possibility of self-employment and self-provisioning. This is the scenario that led to the Enclosures 250 years ago, when capitalist farmers in Britain complained that cottagers with independent access to a living on the common were unwilling to work as many hours, or for as low a wage, as the farmer desired.

There will still be differences in wealth from energy and effort, skill, and sheer entrepreneurial ability in anticipating and meeting needs. But there will no longer be the massive wealth resulting from compound returns on artificially scarce land and capital, or living off the rent of one-hit wonders by using patent and copyright to criminalize competition.

Instead of our present wealth differential of boulders and dust, the range will be more like good-sized rocks and pebbles.

Barbarism, in short, is not the only alternative to the Universal Entitlement.

The Logical Necessity for Reproductive Control. Graubart concedes that the idea of children as a source of wealth was originally one associated with pre-industrial societies with labor-intensive forms of production, extreme poverty, and high mortality rates. He concedes that this state of affairs ended when childhood mortality fell, children ceased to be an economic asset in the household, and income came mainly from adult employment outside the home. But “[y]ou might be surprised to find out that in a truly free society, many of the reasons to have children in pre-modern times will come back in a thoroughly modern context.”

Unfortunately, Graubart’s actual argument seems to consist almost entirely of a priori reasoning from his assumptions about human nature—assumptions that sound a lot like the anecdotes from a Ronald Reagan speech ca. 1970 about “welfare queens” driving Cadillacs and buying T-bones with food stamps. To show that this is not hyperbole or mischaracterization on my part, I produce an unusually long series of examples below:

Universal Entitlement creates a society where children add to the wealth of a household. If the household has little wealth to begin with, children would be treated as income. Without reproductive control to both fund entitlement and prevent unlimited births, resources would be depleted, taxpayers would rebel, and reactionary forces would lead us to barbarism.

Every additional child means at least $625 per month extra coming into the household. Families without a source of income could use bearing children as a path to wealth. This is not only an evolutionary catastrophe, but one that must inevitably lead to a collapse of society.

The result of the conflict between Children=Wealth vs. Children=Poverty is that educated, middle class families are having fewer children and the impoverished are having more, and that imbalance can only grow more acute.

It is a simple fact of human nature: If having a child increases your wealth, some people will have as many children as they can. It is argued that women do not want to return to the era where they were baby factories. Women today are far more interested in a career and their own personal development. But this attitude is in an age where Children = Poverty. In an AFFEERCE society, it is precisely the women who do not have careers who will be enticed to increase their wealth in the easiest way they can.

However, if we forego reproductive control, like the pigeons, the population will grow exponentially. And even if the economy is able to keep up, the limited resources of the earth will not.

Now the taxpayer is assured the privilege of paying for nutritious food for your child, and for the social worker who will make certain you are feeding your child properly. But the social worker only comes twice a month, and you can feed the kids well on those days. In the meantime, you can get 75% on your link card for crack. Now the kids are screaming because they’re hungry, but it doesn’t bother you. You don’t have a care in the world, feeling oh so nice on the taxpayer’s dime. You figure if you had enough kids, perhaps there would be enough to get high every day of the month, and still fool the social worker. What can citizens do to stop this theft? Absolutely nothing! Families can churn out babies, one after another. There is no recourse….

Graubart himself goes on—in quite head-scratching form—to apparently concede in passing that all this loaded ideological language is a mere “diatribe,” perhaps not to be taken as based on actual evidence or logical necessity. But then he continues:

But the diatribe is important because it is an archetype of the truth. It is a fear hidden not far below the surface in many of us. And in other countries, the truth is even more apparent. In India, there are children who will blind or dismember themselves to increase their chances of getting something to eat.

Um, so is it true, or isn’t it? Since his argument for the stark choice between Reproductive Control and barbarism seems to hinge on it being actually true and not just a useful myth, I will analyze it on the assumption he actually means what he spent so much time saying.

First of all, his very model of a society in which households are polarized between comfortable, educated people who exercise restraint and uneducated, impoverished breeders desperate for the six hundred bucks each child would bring, presumes—as I’ve already discussed at considerable length—a society much like our own in many respects. But I think it’s much more likely a free society would be characterized by a more nearly even distribution of wealth.

Second, I’m extremely skeptical that multi-generation families of welfare mothers having children simply for the measly amount of income support they bring from the state exist beyond the level of statistically insignificant anecdotes. I think Graubart seriously underestimates just how much personal effort and equity is entailed in carrying a child to term for nine months and then spending years with a baby and toddler in the house. And to the extent that there’s a grain of truth in it, it’s only true because 1) the state has manufactured an artificially large destitute underclass by forcibly shutting off access to opportunities for production and comfortable subsistence; and 2) there are people living with the almost unimaginable levels of destitution that would make six hundred-odd bucks a month seem worth the incredible personal investment of pregnancy and motherhood.

To the extent that this phenomenon really does exist, it results not from the incentives of the welfare state (as described in neoconservative lore by Marvin Olasky), but from the fact that northern cities were flooded by former black sharecroppers who’d been tractored off their land after WWII. They were essentially in the same predicament as the Okies who’d fled to California half a generation earlier, only without even the availability of migrant farm labor to make a living. In other words, it wasn’t the presence of the Great Society, but the absence of forty acres and a mule, that created welfare families.

Assuming a society in which Graubart’s Universal Entitlement is in place, and every person already alive is guaranteed shelter, groceries, clothing and healthcare far superior to what WISC or food stamps will afford today, the incentive to have children for welfare money (to the extent that it actually exists to a significant degree outside fevered Tea Party imaginations) would be far less than at present.

In short, the economic incentives that result in reduced birth rates in mature, prosperous societies would remain largely intact or even be strengthened. Reproductive Control is not the only alternative to barbarism.

Conclusion.For all my disagreements with this book, I do share one broad agreement with Graubart: the overall prosperity and happiness of a society in which subsistence no longer depends on one’s willingness to accept work on whatever degrading and exploitative terms it is offered, in which people are free to exercise their full creative faculties taking advantage of productive opportunities afforded through association with their family, friends, neighbors and equals, where the labor threshold for comfortable subsistence is low and leisure is plentiful, where everyone sits under their own fig tree and vine and none makes them afraid.

Did anyone really not expect this? Reporters Without Borders docks the United States 14 places versus last year — from 32nd to 46th worldwide — in its 2014 World Press Freedom Index.

Citing the Obama administration’s abuse of the Espionage Act to harass journalists and sources, the imprisonment of US Army whistleblower Chelsea Manning, threats of arrest and even assassination of NSA whistleblower Edward Snowden, harassment of journalists assisting him in informing the public and a threatened 105 years in prison for journalist Barrett Brown for posting a link on a web site, RWB designates the US one of two “New World giants setting a bad example” (the other is Brazil).

These criticisms are reasonable and just, but RWB is mistaken in asserting that the US “for a long time was the embodiment of an established democracy where civil liberties reign supreme.” In fact, the US government has a long and sordid record of persecuting journalists, dating back nearly to its founding.

From criminal prosecutions of writers for “libeling” the second and third presidents of the United States to wartime censorship (not solely of important military information, even were that a reasonable excuse, but explicitly to ensure adherence to the regime’s policy lines) to morals “Comstockery” to hounding and criminal prosecution of anyone revealing embarrassing truths at inopportune moments, the American state has always treated “civil liberties” as mere conveniences to be suppressed any time they become inconveniences.

The real question raised by the continuing US slide in RWB’s rankings is: Why, in recent years, has the US found press freedom less congenial to its goals than usual and increasingly acted to suppress it?

Or, to put it in context: Why, among the world’s emerging authoritarian managerial states in the first half of the 20th century, was the US willing to accommodate more press freedom as a matter of course than Mussolini, Hitler, Franco or Stalin … and what’s changed lately to reduce its willingness to tolerate journalists and their sources?

The answer is that while those other four rulers came to power via open political violence and considered themselves (for good reason) beset from the beginnings of their reigns, the US national security state evolved more slowly and with less dissent. Its institutions weren’t overthrown; they adapted. The illusions of consensus and consent, carefully tended for most of the state’s history, were preserved relatively intact, passed down from largely apocryphal “old republic” to “New Deal” to “Great Society” to “Morning in America” to post-9/11 banana republic.

Why not let the birds squawk? They’re caged, the door is secure and when, as happens now and again, the noise becomes irritating, the state can just drop a dark cloth over the cage for a few hours of peace and quiet.

But  Julian Assange pulled the cloth off the cage, Chelsea Manning pried the door open and Edward Snowden flew the coop. Barrett Brown’s wings are clipped and they’ve put a muzzle on his beak, but it’s too little, too late. Barack Obama, Keith Alexander and Mike Rogers can’t call a press conference lately without Glenn Greenwald swooping in to drop a load of something messy on their heads in public.

“Press freedom” is falling by the wayside because it now threatens the American state. Those illusions of consensus and consent served American politicians long and well, but now they’re dissolving and exposing American government as an instrument of naked force like all others.

We can have freedom — freedom of the press, freedom of speech, freedom of any and every kind — or we can have political government. We can’t have both.

Translations for this article:

• Portuguese, “Liberdade de imprensa” é apenas outro jeito de dizer que o estado não se sente ameaçado.
• Italian, Libertà di Stampa È un Altro Modo di Dire che lo Stato non si Sente Minacciato.
• Spanish, El Estado Respeta la Libertad de Prensa Siempre y Cuando No la Perciba como una Amenaza.

After reading last week’s column, you went out (or stayed in, depending on the weather) and bought/downloaded/rigged up your own podcast studio, and now you’re… stuck. You’re staring at your phone, the app you’re recording with is running, and no words are coming out. You might feel the urge to panic; I’ve spent more time recording and deleting things out of fear than I have recording and keeping pieces, but it’s okay. Take a breath. Let’s talk about technique.

Pick Your Niche

Unlike public radio, or anything produced professionally, by the book, in a studio, podcasting is limitless in terms of both creativity and coverage. This is a double-edged sword, and it is the primary reason you need to take some time to think about what you want to say with your show. Interested in news and politics? As a quick glance at iTunes shows, so do 500 other producers. Narrow things down to a specific topic, and run with it – especially if you believe that topic isn’t covered well in the rest of the media.

KISS – Keep It Short and Simple

The very best advice I ever got was from a podcaster I interviewed, Abby Wendle. She told me that the best idea for a show was one you could implement in a few minutes, as that’s generally what radio stations look for. While I’m not so worried about radio stations, this concept applies to your listener as well. (Note: I said listener, singular, for a reason.) Your casual listener has an attention span that will feel stretched if you go longer on a topic, story or episode than five to ten minutes. Obviously, if you go over that time frame, no one is going to, like, sue you, but your listener might not stick around for the whole thing — at least, not when you just start out.

Learn to write like you speak

This is actually a professional technique. I didn’t learn that until recently, when I was flipping through Sound Reporting: The NPR Guide To Audio Journalism And Production while bored the other day. Here’s what Jonathan Kern, the author of that book, has to say:

First, and foremost, say your sentences before you write them down; or at the very least, say them out loud after you’ve written them. […] As you write, ask yourself: Would I ever say this sentence in my regular life, when I am not writing a news story? If the answer is no, change it. […] Remember, expressing your thoughts in short declarative sentences doesn’t require you to eliminate any of your ideas — just to ration them out. You aren’t sacrificing anything by writing less convoluted prose.

I’ve tried podcast writing a number of ways, including: reading from the Associated Press wire; writing whole essays on a topic, the way I would if I were still in school; going scriptless. None of them have worked nearly half as well as when I’m writing the entire episode of a show like I’d speak the show naturally, without any pauses in thought. If you do this alone, the quality of your podcast will improve regardless of what equipment you’re rocking.

Next week: the significance of studioless podcasting.

Download: MOLOCH: Mass-Production Industry as a Statist Construct.

I. The Origins of Sloanist Mass Production

A Fork in the Road
A Wrong Turn
The Role of the State in Tipping the Balance

II. The Institutional Imperatives of Sloanism

Economies of Scale, Economies of Speed, and Push Distribution
Microeconomic Institutional Forms for Providing Stability
Mass Consumption to Absorb Surplus
Political Capitalism
State Action to Absorb Surplus: Imperialism
State Action to Absorb Surplus: Creation of New Industries

III. Conclusion

So the unique potential of electrical power, for many decades, was diverted into a mass-production cul de sac. Only with the decay of the Sloanist system, beginning with the economic stagnation and oil shocks of the 1970s, did electrical power begin to live up to its decentralizing potential. A new mode of industrial production emerged based on the unique potential of electrical power: first the large-scale lean production methods developed by Taichi Ohno, the basis for the Toyota Production System developed in the ’50s and ’60s, which began to cause American industry such grief in the 1980s; and second the model of networked manufacturing (most notably that of Emilia-Romagna) that became so prevalent in the stagnation of the ’70s and ’80s. As Piore and Sabel put it, industry rediscovered, after a century-long dead end, how to integrate electrical power into manufacturing.

The decay of Sloanism, and the industrial models that are supplanting it, will be the topic of the next C4SS paper.

Download: MOLOCH: Mass-Production Industry as a Statist Construct.

I. The Origins of Sloanist Mass Production

A Fork in the Road
A Wrong Turn
The Role of the State in Tipping the Balance

II. The Institutional Imperatives of Sloanism

Economies of Scale, Economies of Speed, and Push Distribution
Microeconomic Institutional Forms for Providing Stability
Mass Consumption to Absorb Surplus
Political Capitalism
State Action to Absorb Surplus: Imperialism
State Action to Absorb Surplus: Creation of New Industries

III. Conclusion

Government also directly intervened to alleviate the problem of overproduction, by its increasing practice of directly purchasing the corporate economy’s surplus output — through Keynesian fiscal policy, massive highway and civil aviation programs, the military-industrial complex, the prison-industrial complex, foreign aid, and so forth. Baran and Sweezy point to the government’s rising share of GDP as “an approximate index of the extent to which government’s role as a creator of effective demand and absorber of surplus has grown during the monopoly capitalist era.” [129]

If the depressive effects of growing monopoly had operated unchecked, the United States economy would have entered a period of stagnation long before the end of the nineteenth century, and it is unlikely that capitalism could have survived into the second half of the twentieth century. What, then, were the powerful external stimuli which offset these depressive effects and enabled the economy to grow fairly rapidly during the later decades of the nineteenth century and, with significant interruptions, during the first two thirds of the twentieth century? In our judgment, they are of two kinds which we classify as (1) epoch-making innovations, and (2) wars and their aftermaths.

By “epoch-making innovations,” Baran and Sweezy referred to “those innovations which shake up the entire pattern of the economy and hence create vast investment outlets in addition to the capital which they directly absorb.” [130] As for wars, Emmanuel Goldstein described their function quite well: “Even when weapons of war are not actually destroyed, their manufacture is still a convenient way of expending labor power without producing anything that can be consumed.” War is a way of “shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea,” the output of excess productive facilities. [131]

The highway-automobile complex and the civil aviation system are textbook examples of the phenomenon Paul Baran and Paul Sweezy described in Monopoly Capitalism: government’s creation of entire new industries to soak up the surplus generated by corporate capitalism’s chronic tendencies toward overinvestment and overproduction.

Of the automobile-highway complex, Baran and Sweezy wrote, “[t]his complex of private interests clustering around one product has no equal elsewhere in the economy — or in the world. And the whole complex, of course, is completely dependent on the public provision of roads and highways.” [132] Not to mention the role of U.S. foreign policy in guaranteeing access to “cheap and abundant” petroleum.

One of the major barriers to the fledgling automobile industry at the turn of the century was the poor state of the roads. One of the first highway lobbying groups was the League of American Wheelmen, which founded “good roads” associations around the country and, in 1891, began lobbying state legislatures….

The Federal Aid Roads Act of 1916 encouraged coast-to-coast construction of paved roads, usually financed by gasoline taxes (a symbiotic relationship if ever there was one). By 1930, the annual budget for federal road projects was $750 million. After 1939, with a push from President Franklin Roosevelt, limited-access interstates began to make rural areas accessible. [133]

It was this last, in the 1930s, that signified the most revolutionary change. From its beginning, the movement for a national superhighway network was identified, first of all, with the fascist industrial policy of Hitler, and second with the American automotive industry.

The “most powerful pressure group in Washington” began in June, 1932, when GM President, Alfred P. Sloan, created the National Highway Users Conference, inviting oil and rubber firms to help GM bankroll a propaganda and lobbying effort that continues to this day. [134]

One of the earliest depictions of the modern superhighway in America was the Futurama exhibit at the 1939 World’s Fair in New York, sponsored by (who else?) GM.

The exhibit… provided a nation emerging from its darkest decade since the Civil War a mesmerizing glimpse of the future–a future that involved lots and lots of roads. Big roads. Fourteen-lane superhighways on which cars would travel at 100 mph. Roads on which, a recorded narrator promised, Americans would eventually be able to cross the nation in a day. [135]

The Interstate’s association with General Motors didn’t end there, of course. Its actual construction took place under the supervision of DOD Secretary Charles Wilson, formerly the company’s CEO. During his 1953 confirmation hearings, when asked whether “he could make a decision in the country’s interest that was contrary to GM’s interest,”

Wilson shot back with his famous comment, “I cannot conceive of one because for years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big.” [136]

Wilson’s role in the Interstate program was hardly that of a mere disinterested technocrat. From the time of his appointment to DOD, he “pushed relentlessly” for it. And the chief administrator of the program was “Francis DuPont, whose family owned the largest share of GM stock….” [137]

Corporate propaganda, as so often in the twentieth century, played an active role in attempts to reshape the popular culture.

Helping to keep the driving spirit alive, Dow Chemical, producer of asphalt, entered the PR campaign with a film featuring a staged testimonial from a grade school teacher standing up to her anti-highway neighbors with quiet indignation. “Can’t you see this highway means a whole new way of life for the children?” [138]

Whatever the political motivation behind it, the economic effect of the Interstate system should hardly be controversial. Virtually 100% of the roadbed damage to highways is caused by heavy trucks. And despite repeated liberalization of maximum weight restrictions, far beyond the heaviest conceivable weight the Interstate roadbeds were originally designed to support,

fuel taxes fail miserably at capturing from big-rig operators the cost of exponential pavement damage caused by higher axle loads. Only weight-distance user charges are efficient, but truckers have been successful at scrapping them in all but a few western states where the push for repeal continues. [139]

As for the civil aviation system, from the beginning it was a creature of the state. The whole physical infrastructure was built, in its early decades, with tax money.

Since 1946, the federal government has poured billions of dollars into airport development. In 1992, Prof. Stephen Paul Dempsey of the University of Denver estimated that the current replacement value of the U.S. commercial airport system — virtually all of it developed with federal grants and tax-free municipal bonds — at $1 trillion.

Not until 1971 did the federal government begin collecting user fees from airline passengers and freight shippers to recoup this investment. In 1988 the Congressional Budget Office found that in spite of user fees paid into the Airport and Airways Trust Fund, the taxpayers still had to transfer $3 billion in subsidies per year to the FAA to maintain its network of more than 400 control towers, 22 air traffic control centers, 1,000 radar-navigation aids, 250 long-range and terminal radar systems and its staff of 55,000 traffic controllers, technicians and bureaucrats. [140]

(And even aside from the inadequacy of user fees, eminent domain remains central to the building of new airports and expansion of existing airports.)

Subsidies to the airport and air traffic control infrastructure of the civil aviation system are only part of the picture. Equally important was the direct role of the state in creating the heavy aircraft industry, whose heavy cargo and passenger jets revolutionized civil aviation after WWII. The civil aviation system is, many times over, a creature of the state.

In Harry Truman and the War Scare of 1948, Frank Kofsky described the aircraft industry as spiraling into red ink after the end of the war, and on the verge of bankruptcy when it was rescued by Truman’s new bout of Cold War spending on heavy bombers. [141] David Noble pointed out that civilian jumbo jets would never have existed without the government’s heavy bomber contracts. The production runs for the civilian market alone were too small to pay for the complex and expensive machinery. The 747 is essentially a spinoff of military production. [142]

The permanent war economy associated with the Cold War prevented the U.S. from relapsing into depression after demobilization. The Cold War restored the corporate economy’s heavy reliance on the state as a source of guaranteed sales. Charles Nathanson argued that “one conclusion is inescapable: major firms with huge aggregations of corporate capital owe their survival after World War II to the Cold War….” [143] According to David F. Noble, employment in the aircraft industry grew more than tenfold between 1939 and 1954. Whereas military aircraft amounted to only a third of industry output in 1939. By 1953, military airframe weight production was 93% of total output. [144] “The advances in aerodynamics, metallurgy, electronics, and aircraft engine design which made supersonic flight a reality by October 1947 were underwritten almost entirely by the military.” [145]

As Marx pointed out in Volume Three of Capital, the rise of major new forms of industry could absorb surplus capital and counteract the falling direct rate of profit.” Baran and Sweezy, likewise, considered “epoch-making inventions” as partial counterbalances to the ever-increasing surplus. Their chief example was the rise of the automobile industry in the 1920s, which (along with the highway program) was to define the American economy for most of the mid-20th century. [146] The high tech boom of the 1990s was a similarly revolutionary event. It is revealing to consider the extent to which both the automobile and computer industries, far more than most industries, were direct products of state capitalism.

Besides civilian jumbo jets, many other entirely new industries were also created almost entirely as a byproduct of military spending. Through the military-industrial complex, the state has socialized a major share — probably the majority — of the cost of “private” business’s research and development. If anything the role of the state as purchaser of surplus economic output is eclipsed by its role as subsidizer of research cost, as Charles Nathanson pointed out. Research and development was heavily militarized by the Cold War “military-R&D complex.” Military R&D often results in basic, general use technologies with broad civilian applications. Technologies originally developed for the Pentagon have often become the basis for entire categories of consumer goods. [147] The general effect has been to “substantially [eliminate] the major risk area of capitalism: the development of and experimentation with new processes of production and new products.” [148]

This is the case in electronics especially, where many products originally developed by military R&D “have become the new commercial growth areas of the economy.” [149]

Overall, Nathanson estimated, industry depended on military funding for around 60% of its research and development spending; but this figure is considerably understated by the fact that a significant part of nominally civilian R&D spending is aimed at developing civilian applications for military technology. [150] It is also understated by the fact that military R&D is often used for developing production technologies that become the basis for production methods throughout the civilian sector.

In particular, as described by Noble in Forces of Production, industrial automation, cybernetics and miniaturized electronics all emerged directly from the military-funded R&D of WWII and the early Cold War. The aircraft, electronics and machine tools industries were transformed beyond recognition by the military economy. [151]

“The modern electronics industry,” Noble writes, “was largely a military creation.” Before the war, the industry consisted largely of radio. [152] Miniaturized electronics and cybernetics were almost entirely the result of military R&D.

Miniaturization of electrical circuits, the precursor of modern microelectronics, was promoted by the military for proximity fuses for bombs…. Perhaps the most significant innovation was the electronic digital computer, created primarily for ballistics calculations but used as well for atomic bomb analysis. After the war, the electronics industry continued to grow, stimulated primarily by military demands for aircraft and missile guidance systems, communications and control instruments, industrial control devices, high-speed electronic computers for air defense command and control networks…, and transistors for all of these devices…. In 1964, two-thirds of the research and development costs in the electrical equipment industry (e.g., those of GE, Westinghouse, RCA, Raytheon, AT&T, Philco, IBM, Sperry Rand_ were still paid for by the government. [153]

The transistor, “the outgrowth of wartime work on semi-conductors,” came out of Bell Labs in 1947. Despite obstacles like high cost and reliability, and resistance resulting from path dependency in the tube-based electronic industry, the transistor won out

through the large-scale and sustained sponsorship of the military, which needed the device for aircraft and missile control, guidance, and communications systems, and for the digital command- and-control computers that formed the core of their defense networks. [154]

In cybernetics, likewise, the electronic digital computer was developed largely in response to military needs. ENIAC, developed for the Army at the University’s Moore School of Electrical Engineering, was used for ballistics calculations and for calculations in the atomic bomb project. [155] Despite the reduced cost and increased reliability of hardware, and advances in computer language software systems, “in the 1950s the main users remained government agencies and, in particular, the military. The Air Force SAGE air defense system alone, for example, employed the bulk of the country’s programmers…”

SAGE produced, among other things, “a digital computer that was fast enough to function as part of a continuous feedback control system of enormous complexity,” which could therefore “be used continuously to monitor and control a vast array of automatic equipment in ‘real time’….” These capabilities were key to later advances industrial automation. [156]

The same pattern prevailed in the machine tool industry, the primary focus of Forces of Production. The share of total machine tools in use that were under ten years old rose from 28% in 1940 to 62% in 1945. At the end of the war, three hundred thousand machine tools were declared surplus and dumped on the commercial market at fire-sale prices. Although this caused the industry to contract (and consolidate), the Cold War resulted in a revival of the machine tools industry. R&D expenditures in machine tools expanded eightfold from 1951 to 1957, thanks to military needs. In the process, the machine tool industry became dominated by the “cost plus” culture of military industry, with its guaranteed profit. [157]

The specific technologies used in automated control systems for machine tools all came out of the military economy:

…[T]he effort to develop radar-directed gunfire control systems, centered at MIT’s Servomechanisms Laboratory, resulted in a range of remote control devices for position measurement and precision control of motion; the drive to develop proximity fuses for mortar shells produced miniaturized transceivers, early integrated circuits, and reliable, rugged, and standardized components. Finally, by the end of the war, experimentation at the National Bureau of Standards, as well as in Germany, had produced magnetic tape, recording heads (tape readers), and tape recorders for sound movies and radio, as well as information storage and programmable machine control. [158]

In particular, World War II R&D for radar-directed gunfire control systems was the primary impetus behind the development of servomechanisms and automatic control,

pulse generators, to convey precisely electrical information; transducers, for converting information about distance, heat, speed, and the like into electrical signals; and a whole range of associated actuating, control and sensing devices. [159]

Industrial automation was introduced in private industry as an offshoot of the military economy. The first analog computer-controlled industrial operations were in the electrical power and petroleum refining industries in the 1950s. By 1959, Texaco’s Port Arthur refinery placed production under full digital computer control, and was followed in 1960 by Monsanto’s Louisiana ammonia plant and B. F. Goodrich’s vinyl plant in Calvert, Kentucky. From there the revolution quickly spread to steel rolling mills, blast furnaces, and chemical processing plants. By the 1960s, computerized control evolved from open-loop to closed-loop feedback systems, with computers making adjustments automatically based on sensor feedback. [160]

Numerically controlled machine tools, in particular, were first developed with Air Force money, and first introduced (both with Air Force funding and under Air Force pressure) in the aircraft and the aircraft engines and parts industries, and in USAF contractors in the machine tool industry. [161]

So the military economy and other state-created industries were an enormous sponge for surplus capital and surplus output. The heavy industrial and high tech sectors were given a virtually guaranteed outlet, not only by U.S. military procurement, but by grants and loan guarantees for foreign military sales under the Military Assistance Program.

Although apologists for the military-industrial complex have tried to stress the relatively small fraction of total production represented by military goods, it makes more sense to compare the volume of military procurement to the amount of idle capacity. Military production runs amounting to a minor percentage of total production might absorb a major part of total idle production capacity, and have a huge effect on reducing unit costs. Besides, the rate of profit on military contracts tends to be quite a bit higher, given the fact that military goods have no “standard” market price, and the fact that prices are set by political means (as periodic Pentagon budget scandals should tell us).162 So military contracts, small though they might be as a portion of a firm’s total output, might well make the difference between profit and loss.

Seymour Melman described the “permanent war economy” as a privately-owned, centrally-planned economy that included most heavy manufacturing and high tech industry. This “state-controlled economy” was based on the principles of “maximization of costs and of government subsidies.” [163]

It can draw on the federal budget for virtually unlimited capital. It operates in an insulated, monopoly market that makes the state-capitalist firms, singly and jointly, impervious to inflation, to poor productivity performance, to poor product design and poor production managing. The subsidy pattern has made the state-capitalist firms failure-proof. That is the state-capitalist replacement for the classic self-correcting mechanisms of the competitive, cost-minimizing, profit-maximizing firm. [164]

A great deal of what is called “progress” amounts, not to an increase in the volume of consumption per unit of labor, but to an increase in the inputs consumed per unit of consumption — namely, the increased cost and technical sophistication entailed in a given unit of output, with no real increase in efficiency.

The chief virtue of the military economy is its utter unproductivity. That is, it does not compete with private industry to supply any good for which there is consumer demand. But military production is not the only such area of unproductive government spending. Neo-Marxist Paul Mattick elaborated
on the theme in a 1956 article. The overbuilt corporate economy, he wrote, ran up against the problem that “[p]rivate capital formation… finds its limitation in diminishing market-demand.” The State had to absorb part of the surplus output; but it had to do so without competing with corporations in the private market. Instead, “[g]overnment-induced production is channeled into non-market fields–the production of non-competitive public-works, armaments, superfluities and waste. [165]

In order to increase the scale of production and to accummulate [sic] capital, government creates “demand” by ordering the production of non-marketable goods, financed by government borrowings. This means that the government avails itself of productive resources belonging to private capital which would otherwise be idle. [166]

Such consumption of output, while not always directly profitable to private industry, serves a function analogous to foreign “dumping” below cost, in enabling industry to operate at full capacity despite the insufficiency of private demand to absorb the entire product at the cost of production.

It’s interesting to consider how many segments of the economy have a guaranteed market for their output, or a “conscript clientele” in place of willing consumers. The “military-industrial complex” is well known. But how about the state’s education and penal systems? How about the automobile-trucking-highway complex, or the civil aviation complex? Foreign surplus disposal (“export dependant monopoly capitalism”) and domestic surplus disposal (government purchases) are different forms of the same phenomenon.

Notes:

129. Baran and Sweezy, pp. 146-147.

130. Ibid., p. 219.

131. George Orwell, 1984. Signet Classics Reprint (New York: Harcourt Brace Jovanovich, 1949, 1981), p. 157.

132. Ibid., pp. 173-174.

133. Jim Motavalli, “Getting Out of Gridlock: Thanks to the Highway Lobby, Now We’re Stuck in Traffic. How Do We Escape?” E Magazine, March/April 2002 <http://www.emagazine.com/view/?534>.

134. Mike Ferner, “Taken for a Ride on the Interstate Highway System,” MRZine (Monthly Review) June 28, 2006
<http://mrzine.monthlyreview.org/ferner280606.html>.

135. Justin Fox, “The Great Paving How the Interstate Highway System helped create the modern economy–and reshaped the FORTUNE 500.” Reprinted from Fortune. CNNMoney.Com, January 26, 2004 <http://money.cnn.com/magazines/fortune/fortune_archive/2004/01/26/358835/index.htm>.

136. Edwin Black, “Hitler’s Carmaker: How Will Posterity Remember General Motors’ Conduct? (Part 4)” History News Network, May 14, 2007 <http://hnn.us/articles/38829.html>.

137. Ferner, “Taken for a Ride.”

138. Ibid.

139. Frank N. Wilner, “Give truckers an inch, they’ll take a ton-mile: every liberalization has been a launching pad for further increases – trucking wants long combination vehicle restrictions dropped,” Railway Age, May 1997 <http://findarticles.com/p/articles/mi_m1215/is_n5_v198/ai_19460645>.

140. James Coston, Amtrak Reform Council, 2001, in “America’s long history of subsidizing transportation” <http://www.trainweb.org/moksrail/advocacy/resources/subsidies/transport.htm>.

141. Frank Kofsky, Harry Truman and the War Scare of 1948 (New York: St. Martin’s Press, 1993).

142. Noble, America by Design, pp. 6-7.

143. Nathanson, “The Militarization of the American Economy,” in David Horowitz, ed., Corporations and the Cold War (New York and London: Monthly Review Press, 1969), p. 214.

144. David F. Noble, Forces of Production: A Social History of American Automation (New York: Alfred A. Knopf, 1984), pp. 5-6.

145. Ibid., p. 6.

146. Baran and Sweezy, p. 220.

147. Nathanson, “The Militarization of the American Economy,” p. 208.

148. Ibid., p. 230.

149. Ibid., p. 230.

150. Ibid., pp. 222-25.

151. Noble, Forces of Production, p. 5.

152. Ibid., p. 7.

153. Ibid., pp. 7-8.

154. Ibid., pp. 47-48.

155. Ibid., p. 50.

156. Ibid., p. 52.

157. Ibid., pp. 8-9.

158. Ibid., p. 47.

159. Ibid., pp. 48-49.

160. Ibid., pp. 60-61.

161. Ibid., p. 213.

162. Nathanson, “The Militarization of the American Economy,” p. 208.

163. Seymour Melman, The Permanent War Economy: American Capitalism in Decline (New York: Simon and Schuster, 1974), p. 11.

164. Ibid., p. 21.

165. Paul Mattick, “The Economics of War and Peace,” Dissent (Fall 1956), p. 377.

166. Ibid., pp. 378-379.

It was Thomas Hobbes, in his book Leviathan, that declared without a state man is in a constant climate of struggle and fight. He called this the “state of nature” whereby it is a “war of all against all”. He makes a compelling argument for the coming together of all peoples, and the creation of a civil society and state. This society, and this state, was intended to protect men from a life that was otherwise “nasty, short and brutish”.

People were persuaded, coerced and sometimes forced to become members of the state because it was in their own interests. Who would want to face a life out in the wilderness, struggling to make ends meet? Under constant threat, with very little security? It seemed like an obvious decision to make. Lets step inside this “state”, lets live under its roof and lets prosper, together, as a society.

The premise of the state and its controlling figures, the government, was that with them people were better off. We were all in a more beneficial situation. The state was like a house whereby we would all have comfort, we would all have security and all of us would live a better life in this house, than we would out of it. To continue this analogy of a state being a house, that would mean the government were a sort of estate agent. Their role being fairly straightforward, to sell the house to investors, to adequately furnish and maintain the house, and to make sure the day to day running goes smoothly. This was the basic idea.

So everyone was a member of the state. We were under its roof and we were better off for it. The estate agents took care of the house, and by association, they took care of us. However, we are neglecting a key detail about estate agents, and that is that they do not tend to care about the occupants. As any student will tell you, they care primarily about money. Outside of money their highest concern is then with the house itself, as this is their source of money. What condition is it in? Will it need a lick of paint before some new occupants arrive? Would it perhaps benefit from some fencing around the front garden? At no point are the occupants of the house given priority. The occupants of the house are of little concern, as long as the money keeps coming, and as long as the house does not get destroyed, then the estate agents aren’t particularly bothered.

Surely they should be bothered though? If the house represents the state, and the people in the house represent us, the population of the state, surely we should play some sort of role in the decision making process. Was not the entire intention of the state to provide a place whereby the people were better off being members of it?

Just as the estate agents care more for their house than they do the occupants, so our governments care more for the state than they do the people.

Let us have a look at some examples. The NASA space programme in the United States was not created, or sustained, for the benefit of any of the people within the state of America. Poverty levels did not decrease, education levels did not improve and the average American was not better off. Undoubtedly space exploration and moon landings are incredible feats of technology, wonderful achievements, but who was in aid of? Who was it all for? For the people living in the house? No. It was for the house itself. It was for the glory, for the fame and to show the rival house across the road that it was not as good.

The recent introduction of workfare schemes in the UK, and zero hour contracts. Were these introduced for the people? Did the people ask for these, or even need these schemes? No. Once again these were introduced to improve the states economy. Schemes such as these are attractive to multi national businesses and investors. The schemes were for them. The house had been re-decorated, but not for the benefit of the occupants, it was for businesses.

Nuclear weapons is another blindingly obvious issue whereby matters are decided not for the benefit of the people, but for the benefit of the state. There is vast amount of data across a huge number of countries that clearly show worldwide public disapproval of nuclear weapons. The official government line, the line the estate agents sell to us, is that nukes make us safer, we need them. What the “we” in these statements is actually referring to however is the state. The state needs these weapons, the state wants these weapons. For states, a nuclear weapon is a sign of prestige, they are bragging rights on the international stage. In a public opinion poll in 2000, a staggering 84% of people said they did not feel safer knowing the US and other countries had nuclear weapons. But these are the opinions of the occupants there is no need to listen to them. The state does not exist for them, it exists for itself.

Why are anarchists considered such a threat? Why do governments put so much negative spin on the belief system and the ideas? Anarchists are no danger to the people but they are a danger to the state. It is the states own self-preservation that is at stake here and so anarchy, the discussion of and the association with, is a bad thing.

The state cares only for itself, the mechanisms of the state work only to sustain it. Improvements for the people are of secondary importance. If this was not the case, if this was not the true reality, then why would the state spend more than £79bn in a war when there are 25,600 elderly people dying in the winter because their homes are too cold? Why would the state bail out reckless bankers to the tune of £850bn when there are an estimated 185,000 people a year affected by homelessness? Why would the sixth largest economy in the world have the need for over 180,000 charities to supply services and to look after the people? If the state, if the house, really existed for the benefit of the people, why would a single one of those charities need to exist?

I am not sure the house is the best place for us. I am not sure the estate agents care for our well being at all. I think maybe it is time we opened the front door and stepped outside.

C4SS has teamed up with the Distro of the Libertarian Left. The Distro produces and distribute zines and booklets on anarchism, market anarchist theory, counter-economics, and other movements for liberation. For every copy of ALL Distro’s “CAPITALISM” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with ALL Distro’s “CAPITALISM“.

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Three provocative libertarian perspectives on the liberation, corporation, and the Big C.Charles Davis writes that libertarians are very confused about capitalism, and that a radical re-appraisal of the debate shows that libertarian principles should go a lot further than mainstream libertarians have been willing to take them. David S. D’Amato argues, against business reformists, that inclusive capitalism is a contradiction in terms. And while many more libertarians are beginning to wake up to the structural problems in the corporate economy, Kevin Carson points out it’s the capitalism, not the cronyism that’s at the root of the problem.

“Let’s start over. The wealthy elite are too tainted by the current system of state capitalism for us to rely on a “good” and “bad” distinction when it comes enormous wealth. No one worth more than $10 million is able to get that much money without systemic state violence. There is no reason they should get a head start in Liberty Land. . . . no matter what one replaces it with, dismantling an unjust system requires addressing the injustices that system created. If you don’t, then your idea of “freedom” will be attacked as the freedom to be exploited by the same people running the world today. And with good reason.” — Charles Davis.

“The political-economic reality in this country, confirmed by recent studies as well as well-nigh everything we can observe about the political process, is that big capital keeps American policy­makers comfortably and securely in its pockets. And, sad to say, an ‘in­clusive’ kind of capitalism — oxymoron that it is — is not and never has been the order of the day. . . . In conditions of economic freedom — mean­ing circumstances in which land and opportunities are no co­erc­iv­e­ly monopolized — labor would simply enjoy far more bar­gain­ing pow­er, able to maintain self-sufficiency apart from the Big Business economy. In­deed, the way to fabricate a system wherein the vast majority of indiv­id­u­als are inclined to work for a pittance of a wage at huge, face­less org­an­iz­a­t­ion is to use the power of legal and regulatory authority to fore­close other options. . . .” — David S. D’Amato.

“Conservatives & rightwing libertarians drastically under­est­i­mate the extent to which state intervention has been struct­ur­al­ly central to capit­al­ism as a historical system since its very beginnings. The en­clos­ure of open fields for sheep pasture in late medieval and early modern times, the Parliamentary Enclosures of common woods, waste and past­ure in the 18th century, the colonial enclosure of land in the Third World and eviction of native cultivators, the engrossment of Third World mines and mineral resources, the enslavement of nonwhite populations – no­thing remotely resembling the contemporary concentration of economic pow­er and wealth, or the model of corporate capitalism most people think of as ‘normal’ . . .” — Kevin Carson.

“Libertarians Are Very Confused About Capitalism” was written by Charles Davis and published in November 2013 by the online magazine Salon.com. Charles Davis is a radical columnist, producer and researcher in Los Angeles, California. His work regularly appears in publications such as VICE, Salon, AlterNet, and Al Jazeera English. He keeps a website at charliedavis.blogspot.com.

Last Friday was an exciting day for me as a prison abolitionist. On Friday afternoon, I listened to an absolutely stellar discussion with Reina Gossett and Dean Spade of the Sylvia Rivera Law Project on prison abolition. The highlights were too numerous to discuss them all here, but I’ll mention a few.

One really excellent point Dean Spade made essentially concerned a knowledge problem that impacts attempts at broad prison policy reform. Spade has worked as an attorney for many prisoners, particularly queer and transgender prisoners, and he pointed out that for many of them the particular prison conditions that would make their stay more survivable varied substantially. This means that seeking top down prison reforms is not likely to benefit the human rights of all oppressed and brutalized prisoners, and that therefore we should advocate for the needs expressed by individual prisoners while also seeking to abolish the system that cages and brutalizes them. At another point in the discussion Reina Gossett mentioned the important work that a group called Creative Interventions does as one example of how we intervene to stop violence without the state. The full discussion, as well as four great videos with Gossett and Spade that preceded it, is available here. I highly recommend watching the entire thing.

Towards the end of the conversation, Dean mentioned some resources for those who want to learn more about prison abolition. He recommended Angela Davis’s excellent book Are Prisons Obsolete, as well as Towards Transformative Justice [pdf], which was developed by activists with the group Generation Five. He also mentioned the organizations Black and Pink, the Audre Lorde Project and their Safe OUTside the System Collective, FIERCE, No One Is Illegal, and the Young Women’s Empowerment Project, all of which do work around prison abolition.

So that was Friday afternoon for me. On Friday evening I attended a presentation by Amanda Lickers, a Haudenosaunee woman who has been active in fighting against corporations that attempt to engage in fossil fuel extraction on indigenous land. Her website, Reclaim Turtle Island, documents the indigenous movements that are resisting this ongoing land theft and colonialism. Amanda has worked with submedia.tv to produce a variety of videos on these grassroots movements and the police repression directed against them. She is also a prison abolitionist who has done some excellent prisoner support work, and throughout her talk she made many important points that should be relevant to prison abolitionists. For example, the colonialist roots of many governments’ policing and prison systems. She showed footage documenting the Royal Colonial Mounted Police’s brutal attack on indigenous activists who were protecting their land from companies seeking to engage in fracking. She further noted that the RCMP is an institution founded to repress natives and secure colonial outposts. She also pointed out that the Canadian state’s laws criminalizing sex workers, some of which were recently struck down in court, were rooted in the Indian Act. These moralist assaults on bodily autonomy and free association are rooted in colonialism. Moreover, Amanda pointed us to the cases of multiple indigenous activists who have been held in Canadian prisons, often in solitary confinement, for standing against land theft. This belies the common claims that prisons are necessary to protect us from theft. To the contrary, they often are used to repress those who seek to defend their lands from theft by powerful corporations and governments. This post at Reclaim Turtle Island provides one example of political prisoners being abused by the Canadian state for defending their land. Reclaim Turtle Island is currently doing a fundraiser on Indiegogo to support their ongoing work against colonialist land theft by extractive industries.

Finally, I would be remiss if I didn’t mention the great news we had this week about Hank Magee. Police violently raided Magee’s home on suspicion that he was growing marijuana. Understandably, Hank Magee defended his home, and in the process a police officer was killed. Prosecutors attempted to charge Magee with capital murder, but last week a grand jury refused to indict. While Hank Magee still faces marijuana charges, he is free from the state’s cages for now. He’s with his family. My friend Jesse Fruhwirth reported on this story at his excellent blog Utah 4Ps. Radley Balko has a blog up on the case at the Washington Post. And Jonathan Carp wrote up an op-ed related to the case here at the Center for a Stateless Society.

I’m overjoyed that Hank’s free from prison walls. And I’m even happier to know that so many great people are acting to abolish the prison state itself.

Download: MOLOCH: Mass-Production Industry as a Statist Construct.

I. The Origins of Sloanist Mass Production

A Fork in the Road
A Wrong Turn
The Role of the State in Tipping the Balance

II. The Institutional Imperatives of Sloanism

Economies of Scale, Economies of Speed, and Push Distribution
Microeconomic Institutional Forms for Providing Stability
Mass Consumption to Absorb Surplus
Political Capitalism
State Action to Absorb Surplus: Imperialism
State Action to Absorb Surplus: Creation of New Industries

III. Conclusion

The roots of the corporate state in the U.S., more than anything else, lie in the crisis of overproduction as perceived by corporate and state elites–especially the traumatic Depression of the 1890s–and the requirement, also as perceived by them, for state intervention to absorb surplus output or otherwise deal with the problems of overproduction, underconsumption, and overaccumulation.

According to William Appleman Williams, “the Crisis of the 1890’s raised in many sections of American society the specter of chaos and revolution.” [122] Economic elites saw it as the result of overproduction and surplus capital, and believed it could be resolved only through access to a “new frontier.” Without state-guaranteed access to foreign markets, output would fall below capacity, unit costs would go up, and unemployment would reach dangerous levels.

Accordingly, the centerpiece of American foreign policy to the present day has been what Williams called “Open Door Imperialism” [123]: securing American access to foreign markets on equal terms to the European colonial powers, and opposing attempts by those powers to divide up or close markets in their spheres of influence.

Open Door Imperialism consisted of using U.S. political power to guarantee access to foreign markets and resources on terms favorable to American corporate interests, without relying on direct political rule. Its central goal was to obtain for U.S. merchandise, in each national market, treatment equal to that afforded any other industrial nation. Most importantly, this entailed active engagement by the U.S. government in breaking down the imperial powers’ existing spheres of economic influence or preference. The result, in most cases, was to treat as hostile to U.S. security interests any large-scale attempt at autarky, or any other policy whose effect was to withdraw major areas of the world from the disposal of the U.S. corporate economy. When the power attempting such policies was an equal, like the British Empire, the U.S. reaction was merely one of measured coolness. When it was perceived as an inferior, like Japan, the U.S. resorted to more forceful measures, as events of the late 1930s indicate. And whatever the degree of equality between advanced nations in their access to Third World markets, it was clear that Third World nations were still to be subordinated to the industrialized West in a collective sense.

In the late 1930s, American leadership fears that Fortress Europe and the Greater East Asian Co-Prosperity sphere would deprive the American corporate economy of vitally needed raw materials, not to mention outlets for its surplus output and capital, led FDR to maneuver the country into another world war. The State Department’s internal studies at the time estimated that the American economy required, at a minimum, the resources and markets of a “Grand Area” consisting of Latin America, East Asia, and the British Empire. Japan, meanwhile, was conquering most of China (home of the original Open Door) and the tin and rubber of Indochina, and threatening to capture the oil of the Dutch East Indies as well. In Europe, the worst case scenario was the fall of Britain, followed by the German capture of some considerable portion of the Royal Navy and subsequently of the Empire. War with the Axis would have followed from these perceived threats as a matter of course, even had FDR not successfully maneuvered Japan into firing the first shot. [124]

World War II, incidentally, also went a long way toward postponing America’s crises of overproduction and overaccumulation for a generation, by blowing up most of the capital in the world outside the United States and creating a permanent war economy to absorb surplus output.

The American policy that emerged from the war was to secure control over the markets and resources of the global “Grand Area” through institutions of global economic governance, as created by the postwar Bretton Woods system, and to make preventing “defection from within” by autarkic powers the centerpiece of national security policy.

The problem of access to foreign markets and resources was central to U.S. postwar planning. Given the structural imperatives of “export dependent monopoly capitalism,” [125] the threat of a postwar depression was very real. The original drive toward foreign expansion at the end of the nineteenth century reflected the fact that industry, with state capitalist encouragement, had expanded far beyond the ability of the domestic market to consume its output. Even before World War II, the state capitalist economy had serious trouble operating at the level of output needed for full utilization of capacity and cost control. Military-industrial policy during the war exacerbated the problem of over-accumulation, greatly increasing the value of plant and equipment at taxpayer expense. The end of the war, if followed by the traditional pattern of demobilization, would have resulted in a drastic reduction in orders to that same overbuilt industry just as over ten million workers were being dumped back into the civilian labor force.

A central facet of postwar economic policy, as reflected in the Bretton Woods agencies, was state intervention to guarantee markets for the full output of U.S. industry and profitable outlets for surplus capital. The World Bank was designed to subsidize the export of capital to the Third World, by financing the infrastructure without which Western-owned production facilities could not be established there. According to Gabriel Kolko’s 1988 estimate, almost two thirds of the World Bank’s loans since its inception had gone to transportation and power infrastructure. [126] A laudatory Treasury Department report referred to such infrastructure projects (comprising some 48% of lending in FY 1980) as “externalities” to business, and spoke glowingly of the benefits of such projects in promoting the expansion of business into large market areas and the consolidation and commercialization of agriculture. [127] The Volta River power project, for example, was built with American loans (at high interest) to provide Kaiser aluminum with electricity at very low rates. [128]

Notes: 

122. William Appleman Williams, The Tragedy of American Diplomacy (New York: Dell Publishing Company, 1959, 1962) 21-2.

123. Williams, The Contours of American History (Cleveland and New York: The World Publishing Company, 1961).

124. Laurence H. Shoup and William Minter, “Shaping a New World Order: The Council on Foreign Relations’ Blueprint for World Hegemony, 1939-1945,” in Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management (Boston: South End Press, 1980), pp. 135-56

125. “Now the price that brings the maximum monopoly profit is generally far above the price that would be fixed by fluctuating competitive costs, and the volume that can be marketed at that maximum price is generally far below the output that would be technically and economically feasible…. [The trust] extricates itself from this dilemma by producing the full output that is economically feasible, thus securing low costs, and offering in the protected domestic market only the quantity corresponding to the monopoly price–insofar as the tariff permits; while the rest is sold, or “dumped,” abroad at a lower price…. “–Joseph Schumpeter, “Imperialism,” in Imperialism, Social Classes: Two Essays by Joseph Schumpeter. Translated by Heinz Norden. Introduction by Hert Hoselitz (New York: Meridian Books, 1955) 79-80.

Joseph Stromberg, by the way, did an excellent job of integrating this thesis, generally identified with the historical revisionism of the New Left, into the theoretical framework of Mises and Rothbard, in “The Role of State Monopoly Capitalism in the American Empire” Journal of Libertarian Studies Volume 15, no. 3 (Summer 2001), pp. 57-93. Available online at <http://www.mises.org/journals/jls/15_3/15_3_3.pdf>.

126. Gabriel Kolko, Confronting the Third World: United States Foreign Policy 1945-1980 (New York: Pantheon Books,
1988), p. 120.

127. United States Participation in the Multilateral Development Banks in the 1980s. Department of the Treasury (Washingon, DC: 1982), p. 9.

128. L. S. Stavrianos, Promise of the Coming Dark Age, p. 42.

This has been one of those times that a series of random, seemingly unrelated events have all reinforced a common lesson for me. First, it was reported on January 21 (“Opposed to Fracking? You Might Be a Terrorist,” PopularResistance.org) that Canadian and U.S. law enforcement agencies — Canadian Security Intelligence Service (CSIS), the Mounties, the FBI, Homeland Security, and provincial, state and local police — have been working closely with Enbridge, TransCanada and other energy companies engaged in pipeline projects to keep leading anti-fracking activists under surveillance as potential “terrorists.” Scotland Yard has carried out similar surveillance of “radicals” in the animal rights, anti-war, anti-capitalist and anti-GMO movements.

The same day in the U.S. (“So now Homeland Security can detain suspected movie pirates?” IO9, January 21), Homeland Security seized a man for wearing Google Glass in an Ohio movie theater,  detaining him for three hours — even though he had the “record” function turned off.

Finally, on February 3, Truth-Out.org reported a lawsuit to overturn the Animal Enterprise Terrorism Act, a U.S. law that treats formerly misdemeanor acts of civil disobedience like freeing animals from factory farms — or even trespassing or filming undercover without permission — as acts of terrorism (“Is Freeing a Duck Terrorism?“). By way of background information, bear in mind that — even though the FBI in 2004 designated animal rights and environmental activists the leading threat of domestic terrorism, no one has ever been injured by any of these movements’ protest actions.

All the high-level “counter-terrorism” legislation passed after 9/11 was justified at the time by the urgent need to stop anyone from ever again crashing a jet plane into a skyscraper, spreading anthrax or setting off a “dirty bomb” in a major city. These were supposedly extraordinary powers granted only to counter extraordinary dangers, never to be used by law enforcement against ordinary crimes. But when has the state ever promised that and kept its word? The Espionage and Sedition Acts passed during World War I were accompanied by similar assurances that they wouldn’t be used to suppress ordinary dissent and political debate — and wound up being used as grounds for mass arrests of I.W.W. and Socialist Party members and public critics of the war.

So here we are. The USA PATRIOT Act, and a whole slew of security agencies like the CSIS, RCMP, FBI and DHS are being used to protect the profits of the fossil fuel industries, the movie industry and corporate agribusiness against public debate, embarrassment, or protests. Treating protests that disrupt business as “terrorism?” If USA PATRIOT had been passed a couple of generations ago, I suppose lunch counter sit-ins and bus boycotts would have been classified as “terrorism.”

The ultimate purpose of all the state’s laws and enforcement apparatus, regardless of the many ostensible justifications for this law or that, is to defend the interests of the system and those who control it. Any laws passed by the state, and any armed and uniformed functionaries employed by the state to enforce those laws, will interpret the laws in a way that serves the interests of the system of power.

Translations for this article:

• Spanish, Si Estás Leyendo este Artículo, Probablemente Seas un Terrorista
• Dutch, Wie dit leest is een terrorist.

C4SS has teamed up with the Distro of the Libertarian Left. The Distro produces and distribute zines and booklets on anarchism, market anarchist theory, counter-economics, and other movements for liberation. For every copy of Mikhail Bakunin’s “What is Authority?” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with Mikhail Bakunin’s “What is Authority?”

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The short fragment reprinted in this booklet, one of the most famous passages from Bakunin’s pen, is a widely quoted excerpt from his best-known essay, God and the State, which was itself an excerpt, written as Part II of a much longer planned book, to be entitled The Knouto-Germanic Empire. The incomplete manuscript was dis­covered in Bakun­in’s papers after his death, by his close friends and fellow anarchists Carlo Cafiero and Élisée Reclus, who translated the text into French and published what they could in 1882. English translations were later circulated by Anarchist publishers in the U.S. and England, including Benjamin Tucker, Henry Seymour and Emma Goldman.

“It is the characteristic of privilege and of every privi­leg­ed position to kill the mind and heart of men. The privi­leg­ed man, whether practically or economically, is a man de­prav­ed in mind and heart. That is a social law which admits of no exception, and is as applicable to entire nations as to clas­s­es, corporations and individuals. It is the law of equality, the supreme condition of liberty and humanity. . . . Con­sequ­ent­ly, no external legislation and no author­ity — one, for that matter, being inseparable from the other, and both tending to the servitude of society and the de­grad­at­ion of the legislators themselves. . . .”

“Does it follow that I reject all authority? Far from me such a thought. In the matter of boots, I refer to the author­ity of the bootmakers; concerning houses, canals, or railroads, I consult that of the architect or the engineer. For such or such special knowledge I apply to such or such a savant. I listen to them freely and with all the respect merited by their intelligence, their character, their know­ledge, re­ser­v­ing always my in­con­test­able right of criticism and censure. But I recognise no infall­ible authority; I have no absolute faith in any per­son. Such a faith would be fatal to my reason, to my liberty, and even to the success of my under­takings; it would im­med­iately transform me into a stupid slave, an instrument of the will and interests of others. . . .”

Mikhail Alexandrovich Bakunin (1814–1876) was a Russian-born anarchist revolutionary, speaker, traveler and phi­l­o­sopher. Born into a noble family in Prya­mukh­ino, he was later stripped of his titles, imprisoned, condemned at differ­ent times to death, to life imprisonment, to hard labor, and exiled from France, Prussia, Saxony, Austria, Russia, and the First International for his radical speeches and rev­ol­ut­ion­ary activities. One of the founders of collect­iv­ist anarchism, a leading theorist of liber­tarian social­ism, a friend and student of Proudhon, an enemy of Marx and a fierce critic of auth­or­i­tar­ian social­ism, Bakunin was in­volved in revolution­ary up­ris­ings in Paris, Prague, Leipzig, Dresden, and Lyon. An enor­m­ous influence on radicals throughout Russia, Eur­ope, and the Americas, he and his comrades in the anarchist faction of the Inter­nat­ion­al Working Men’s Association (1868–1872) are often credited as the principle founders of the social anarchist move­ment. Although constantly writing fiery pam­ph­lets, letters, short works and radical jour­nals, Bakunin never completed his ambitious plans for longer works on Anarchist philosophy, often re­mark­ing to his friends, “My life is but a fragment.”

Ahmad Barqawi discusses American imperialism.

William Sheppard discusses state violence and rape.

Sheldon Richman discusses how Obama and Kerry are jeopardizing peace with Iran.

Max Border discusses the rise of the new libertarians.

Murray Dobbin discusses Stephen Harper’s loyalty to Israel.

Michael Munger discusses what positive vision libertarians can offer.

Laurence M. Vance discusses hard questions about the drug war.

Kevin Zeese and Margaret Flowers discuss the Syrian peace conference’s laying of a foundation for war.

Franklin C. Spinney discusses the price of starting another Cold War.

Charles W. Johnson discusses freed market labor wins by the CIW.

Adam Federman discusses how U.S. evangelicals fueled the rise of pro-family sentiment in Russia.

Patrick Cockburn discusses the Syrian civil war.

Chris Hedges discusss the menace of the military mindset.

Lucy Sterigwald discusses the legalization of heroin.

John Glaser discusses why libertarians shouldn’t get to comfortable with GOP love.

Conn Hallinan discusses Canada’s complicity in Washington’s aggression.

H.H. Bhojani discusses the trauma and anxiety caused by drones.

H.H. Bhojani discusses 6 unanswered questions about Obama’s drones.

Conor Friedersdorf discusses how Dianne Feinstein exaggerates the threat of global terrorism.

Kathy Kelly discusses hunger in Afghanistan.

Sheldon Richman discusses the minimum wage.

Oliver Stone and Peter Kunzick discuss the right-wing Japanese prime minister’s plans.

Brian Terrell discusses the turning of Iowa into a war zone.

William Blum discusses how to end suicide bombings.

Carl L. Hart discusses the racist origins of laws against cocaine and crack.

Sheldon Richman discusses whether Edward Snowden is a lawbreaker or not.

Scott Stenholm interviews Jeremy Scahill.

Robert Scheer discusses the war in Afghanistan.

One of the finest rook endgames ever played.

A famous game between Capablanca and Botvinnik.

I’m alternately amused and exasperated by the constant refrain of calls to “Vote Harder!” from Progressive Democrats (the kind of people who use the #UniteBlue hashtag on Twitter). During the 2008 campaign Barack Obama made the most left-populist noises of any Democratic candidate in generations, and won by a landslide almost as big as LBJ’s over Goldwater in 1964 (including a 60-seat Senate majority). He came into office facing the worse economic crisis of any president since FDR’s inauguration in 1933, and a presumptive mandate to fix it.

So what did this “Kenyan Marxist,” this pal of Saul Alinsky, actually choose to do, after all that campaign rhetoric? He continued Paulson’s Hamiltonian TARP program, with a few minor cosmetic touches, bailed out the legacy auto industry in Detroit, and poured $600 billion into “shovel-ready projects” (mostly automobile-highway complex infrastructure already railroaded through by local real estate developers, to extract a few more years of profit out of an economic model clearly doomed to destruction). He took his sweet time ending one war — indeed never completely ending it at all — drastically expanded another one, and started still another one. He did virtually the opposite of virtually everything he promised regarding domestic surveillance, torture, whistleblower protection and government transparency in 2008. He adopted a healthcare “reform” based on Romneycare, which essentially creates a captive market for the crooks in the health insurance industry.

If voting such a vocally “Progressive” candidate into office, with such an unprecedented alignment of stars in his favor, still led to betrayal, how hard do people have to vote next time to get somebody who won’t betray them? Actually, the very people who should be holding Obama’s feet to the fire — the liberal establishment — are abjuring the very actions that would be needed to put the fear of God into future betrayers. They’re outdoing each other to apologize for Obama’s double-crosses and warning the “Progressive” wing of the party to keep it down with their criticism lest they give aid and comfort to the Republicans. The only reason the New Deal itself passed — and its “progressive” nature is largely a myth — was because a major part of the capitalist ruling class saw it as promoting their own interests.

So if voting didn’t work this time, it will never work. My God, it doesn’t even work at the local level, with city and county governments where the functionaries at City Hall and in the County Courthouse represent only a few thousand people each. Even at the local level, governments are so captive to inside business interests as to be virtually immune to popular control.

As a case in point, consider the Northwest Arkansas Regional Airport, which was completed at Highfill in 1998.

The Northwest Arkansas Council was a nominally private lobbying organization made up of “civic-minded” representatives of Tyson, Walmart, the J.B. Hunt trucking company, and the Jim Lindsey real estate empire responsible for most of the new strip malls, apartment complexes and housing additions in the Washington-Benton County area. It also had ex officio representatives from local city and county governments and the University of Arkansas. Although nominally private, it was a de facto shadow government. Its main agenda was to lobby for major regional infrastructure projects that would directly or indirectly subsidize the major corporate interests in the area and cause real estate values to skyrocket.

In 1990, the Council went to work lobbying behind the scenes for a regional airport. Their work was quiet and low-key because they didn’t want to draw attention to themselves and trigger a public opposition movement. So the first the issue appeared on the public radar was when the airport project was presented as a done deal. In response to quiet NWA Council lobbying, five city governments and two county governments voted to create an intergovernmental authority, the Northwest Arkansas Regional Airport Authority, to oversee the airport project. The local governments, as I say, presented it as a done deal, without any prior notice or debate, by passing it as an “emergency measure”; this meant they could secretly vote on it without the multiple public readings and debate required under normal legislative procedure. So the people of Northwest Arkansas just woke up one morning and found out that the Authority had already been created — a body, immortal under state law so long as any two of the member governments remained party to it, with the power to condemn land under eminent domain and levy taxes.

Bear in mind that the deck was still less stacked in favor of the airport in Northwest Arkansas than it would be in a lot of areas. The Washington County seat, Fayetteville, besides being a college town, is also home to several thousand aging hippies who settled here during the back-to-the-land movement of the ’70s. There’s a thriving local counter-economy of natural foods cooperatives and head shops, and at the time there was still an underground newspaper that printed investigative journalism of quite high quality. So at least here — unlike a lot of other places where you’d never have heard a peep aside from the official Chamber of Commerce happy talk on the mainstream editorial pages — there was actually a highly polarized public debate on the airport after the creation of the Authority was announced.

But controversy and public debate notwithstanding, once the Authority was created it was a done deal. As I said, it was an immortal corporation that could take over land and apply for FAA grants, and there wasn’t a thing the local population could do about it. Local governments were forced to allow a ballot initiative on the Authority. But given the structure of the Authority under state law, the people in any individual city or county would only be voting on whether their own government would withdraw from a corporation that would continue to exist unless six of the seven participating governments all voted to withdraw. This would mean that the airport project would still continue without a hitch, and any locality whose citizens voted to withdraw would simply “lose their voice” on the authority. And this was the constant talking point of the pro-airport forces throughout the election: “If you vote to withdraw, you’ll lose your voice.” But really, we lost our voice when the local movers and shakers decided to create the Authority without asking us.

In the period leading up to the vote, the Fayetteville Chamber of Commerce formed an elite caucus called “Leadership Fayetteville” to coordinate strategy against airport opponents, and held a big secret seminar behind closed doors. The good ol’ boys quietly went to work behind the scenes; the editor of the Northwest Arkansas Times and a popular radio DJ who had vocally called for a public vote were fired, and Airport Authority Chairman George Westmoreland daily stood up for the cameras and parroted talking points about hippies and ignorant housewives trying to hold up progress that would benefit everyone.

Really, the only thing that could have stopped the project at this point would have been FAA refusal to approve or fund it. But the Authority was willing to resubmit the proposal — totally revised, with totally different selling points — as many times as it took. The first proposal was for a regional cargo airport, because they greybeards at the Authority said there wasn’t enough regional demand to support a passenger airport. But the FAA turned that down on the grounds that there wouldn’t be enough demand for a cargo facility. So the Authority turned around and submitted a proposal for — get this — a regional passenger airport, with all kinds of statistics showing the overwhelming demand for it. The interesting thing is that this passenger airport — which the FAA approved — had runways far longer than they’d have needed to be for any purpose other than serving fully-laden cargo jets. Can you say “Trojan Horse”?

A few years later, in 2006, there was a “progressive” Mayor (Dan Coody) and City Council in power in Fayetteville, who had run on new urbanist or smart growth platforms. Of course the one thing they didn’t do was eliminate all the structural interventions of government, like subsidies to sprawl and zoning restrictions on mixed-use development — that played a primary role in causing sprawl. That would have made real estate developers like Jim Lindsey mad. Instead, they installed a lot of speed bumps in residential areas, built some bike trails, and passed a lot of aesthetic regulations about what kind of material big box stores could built their facades out of and how big their signs could be. Greenwashed sprawl and monoculture development, pure and simple.

The city decided it was necessary to expand the sewer plant, because all of Jim Lindsey’s new subdivisions (naturally they didn’t phrase it that way) were overwhelming its capacity. Now, the obvious solution would have been to increase sewer hookup fees in new subdivisions and commercial developments enough to pay for expanding the sewer plant. But you know they’re not gonna do that, right? I mean, making ordinary people and in-lying utility ratepayers fund subsidized infrastructure to real estate developments on the edge of town is what local governments are for, right? And Jim Lindsey had already threatened to take his real estate business out of any town that increased utility hookup fees on his projects.

So Dan Coody called for a public vote on a one-cent sales tax to fund the expansion, instead. Either that, or increasing rates on everyone, were the “only feasible options,” he said. Increasing fees on the real estate developers imposing most of the new costs on the system wasn’t even on the table. (Deciding what “feasible options” are placed on the table, and what’s clearly impractical moonshine that’s out of the question, is the main sleight of hand ruling elites use to maintain control of the agenda.) At the same time, sales tax proponents appealed to the greed of local residents by pointing out it would be paid in part by out-of-towners who spent money in Fayetteville.

So the sales tax squeaked through, by less than a percent. And later, when someone proposed putting higher sewer connection fees on the ballot, Jim Lindsey’s lackeys could say, “Oh, that might have been a good idea — but there’s no need for it now that we’ve got this sales tax!”

Now, this is local government — the government which is supposedly closest to the people, and most amenable to popular control. But even in a town of a few score thousand people, where an Alderman represents fewer than ten thousand, anything the Chamber of Commerce, banks and real estate industry want is decided in secret by the good ol’ boys and presented to the public as a done deal.

And you really think that it’s possible to use the political process at a national level to influence policy in any meaningful way, when the single biggest influence on actual policy is an unelected shadow government of narco-traffickers, money-laundering banks, surveillance state functionaries and global torture and death squad operations funded by Pentagon and CIA black budgets or laundered drug money? I have one piece of advice for any politician who presents a credible threat of getting elected on a platform of shutting down this real government — don’t ever get on a private plane.

Download: MOLOCH: Mass-Production Industry as a Statist Construct.

I. The Origins of Sloanist Mass Production

A Fork in the Road
A Wrong Turn
The Role of the State in Tipping the Balance

II. The Institutional Imperatives of Sloanism

Economies of Scale, Economies of Speed, and Push Distribution
Microeconomic Institutional Forms for Providing Stability
Mass Consumption to Absorb Surplus
Political Capitalism
State Action to Absorb Surplus: Imperialism
State Action to Absorb Surplus: Creation of New Industries

III. Conclusion

Despite all the state intervention up front to make the centralized corporate economy possible, state intervention is required afterward as well as before in order to keep the system running. Despite all the microeconomic mechanisms described above, and all the techniques of demand management, the system chronically tends toward excess productive capacity and insufficient demand. Large, mass-production industry is unable to survive without the government guaranteeing an outlet for its overproduction. As Paul Baran and Paul Sweezy put it, monopoly capitalism

tends to generate ever more surplus, yet it fails to provide the consumption and investment outlets required for the absorption of a rising surplus and hence for the smooth working of the system. Since surplus which cannot be absorbed will not be produced, it follows that the normal state of the monopoly capitalist economy is stagnation. With a given stock of capital and a given cost and price structure, the system’s operating rate cannot rise above the point at which the amount of surplus produced can find the necessary outlets. And this means chronic underutilization of available human and material resources…. Left to itself — that is to say, in the absence of counteracting forces which are no part of what may be called the “elementary logic” of the system — monopoly capitalism would sink deeper and deeper into a bog of chronic depression. [106]

The state, faced by chronic crises of overaccumulation and overproduction, adopted policies described by Gabriel Kolko as “political capitalism.”

Political capitalism is the utilization of political outlets to attain conditions of stability, predictability, and security — to attain rationalization — in the economy. Stability is the elimination of internecine competition and erratic fluctuations in the economy. Predictability is the ability, on the basis of politically stabilized and secured means, to plan future economic action on the basis of fairly calculable expectations. By security I mean protection from the political attacks latent in any formally democratic political structure. I do not give to rationalization its frequent definition as the improvement of efficiency, output, or internal organization of a company; I mean by the term, rather, the organization of the economy and the larger political and social spheres in a manner that will allow corporations to function in a predictable and secure environment permitting reasonable profits over the long run. [107]

The state played a major role in cartelizing the economy, to protect the large corporation from the destructive effects of price competition. At first the effort was mainly private, reflected in the trust movement at the turn of the 20th century. Chandler celebrated the first, private efforts toward consolidation of markets as a step toward rationality:

American manufacturers began in the 1870s to take the initial step to growth by way of merger — that is, to set up nationwide associations to control price and production. They did so primarily as a response to the continuing price decline, which became increasingly impressive after the panic of 1873 ushered in a prolonged economic depression. [108]

The process was further accelerated by the Depression of the 1890s, with mergers and trusts being formed through the beginning of the next century in order to control price and output: “the motive for merger changed. Many more were created to replace the association of small manufacturing firms as the instrument to maintain price and production schedules.” [109]

From the turn of the twentieth century on, there was a series of attempts by J.P. Morgan and other promoters to create some institutional structure for the corporate economy by which price competition could be regulated and their respective market shares stabilized. “It was then,” Paul Sweezy wrote,

that U.S. businessmen learned the self-defeating nature of price-cutting as a competitive weapon and started the process of banning it through a complex network of laws (corporate and regulatory), institutions (e.g., trade associations), and conventions (e.g., price leadership) from normal business practice. [110]

But all these attempts at private cartelization were failures: the trusts were less efficient than their smaller competitors. They immediately began losing market share to less leveraged firms outside the trusts. The dominant trend, despite attempts to suppress it, was competition. The trusts were miserable failures. Subsequent attempts to cartelize the economy, therefore, enlisted the state.

As recounted by Kolko, the main force behind the Progressive Era regulatory agenda was big business itself, the goal being to restrict price and quality competition and to reestablish the trusts under the aegis of government. His thesis was that, “contrary to the consensus of historians, it was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it.” In the face of the resounding failure of voluntary private cartels, big business acted instead to cartelize itself through the state — hence, the Progressive regulatory agenda.

If economic rationalization could not be attained by mergers and voluntary economic methods, a growing number of important businessmen reasoned, perhaps political means might succeed.” [111]

Kolko provided considerable evidence that the main force behind the Progressive Era legislative agenda was big business. The Meat Inspection Act, for instance, was passed primarily at the behest of the big meat packers. [112] This pattern was repeated, in its essential form, in virtually every component of the “Progressive” regulatory agenda.

The various safety and quality regulations introduced during this period also worked to cartelize the market. As Butler Shaffer put it, the purpose of “wage, working condition, or product standards” is to “universalize cost factors and thus restrict price competition.” [113] Thus, the industry is partially cartelized, to the very same extent that would have happened had all the firms in it adopted a uniform quality standard, and agreed to stop competing in that area. A regulation, in essence, is a state-enforced cartel in which the members agree to cease competing in a particular area of quality or safety, and instead agree on a uniform standard which they establish through the state. And unlike private cartels, which are unstable, no member can seek an advantage by defecting.

More importantly, the FTC and Clayton Acts reversed the long trend toward competition and loss of market share and made stability possible.

The provisions of the new laws attacking unfair competitors and price discrimination meant that the government would now make it possible for many trade associations to stabilize, for the first time, prices within their industries, and to make effective oligopoly a new phase of the economy. [114]

The Federal Trade Commission created a hospitable atmosphere for trade associations and their efforts to prevent price cutting. [115] Shaffer, in In Restraint of Trade, provides a detailed account of the functioning of these trade associations, and their attempts to stabilize prices and restrict “predatory price cutting,” through assorted codes of ethics.116 Specifically, the trade associations established codes of ethics directly under FTC auspices that had the force of law. Prominent among the list of unfair business practices were “selling of goods below cost or below published list of prices for purpose of injuring competitor” and “use of inferior materials or deviation from standards.” [117] The second item, in practice, criminalized innovation by individual companies faster than an industry as a whole was willing to agree on.

The two pieces of legislation accomplished what the trusts had been unable to: they enabled a handful of firms in each industry to stabilize their market share and to maintain an oligopoly structure between them.

It was during the war that effective, working oligopoly and price and market agreements became operational in the dominant sectors of the American economy. The rapid diffusion of power in the economy and relatively easy entry virtually ceased. Despite the cessation of important new legislative enactments, the unity of business and the federal government continued throughout the 1920s and thereafter, using the foundations laid in the Progressive Era to stabilize and consolidate conditions within various industries. And, on the same progressive foundations and exploiting the experience with the war agencies, Herbert Hoover and Franklin Roosevelt later formulated programs for saving American capitalism. The principle of utilizing the federal government to stabilize the economy, established in the context of modern industrialism during the Progressive Era, became the basis of political capitalism in its many later ramifications. [118]

The regulatory state also provided “rationality” by the use of federal regulation to preempt potentially harsher action by populist governments at the state and local level, and by preempting and overriding older common law standards of liability, replacing the potentially harsh damages imposed by local juries with a least common denominator of regulatory standards based on “sound science” (as determined by industry, of course). Regarding the second, most “tort reform” amounts to indemnifying business firms from liability for reckless fraud, pollution, and other externalities imposed on the public.

State spending serves to cartelize the economy in much the same way as regulation. Just as regulation removes significant areas of quality and safety as issues in cost competition, the socialization of operating costs on the state (e.g. R&D subsidies, government-funded technical education, etc.) allows monopoly capital to remove them as components of price in cost competition between firms, and places them in the realm of guaranteed income to all firms in a market alike. Transportation subsidies reduce the competitive advantage of locating close to one’s market. Farm price support subsidies turn idle land into an extremely lucrative real estate investment. Whether through regulations or direct state subsidies to various forms of accumulation, the corporations act through the state to carry out some activities jointly, and to restrict competition to selected areas.

An ever-growing portion of the functions of the capitalist economy have been carried out through the state. According to James O’Connor, state expenditures under monopoly capitalism can be divided into “social capital” and “social expenses.”

Social capital is expenditures required for profitable private accumulation; it is indirectly productive (in Marxist terms, social capital indirectly expands surplus value). There are two kinds of social capital: social investment and social consumption (in Marxist terms, social constant capital and social variable capital)…. Social investment consist of projects and services that increase the productivity of a given amount of laborpower and, other factors being equal, increase the rate of profit…. Social consumption consists of projects and services that lower the reproduction costs of labor and, other factors being equal, increase the rate of profit. An example of this is social insurance, which expands the productive powers of the work force while simultaneously lowering labor costs. The second category, social expenses, consists of projects and services which are required to maintain social harmony — to fulfill the state’s “legitimization” function…. The best example is the welfare system, which is designed chiefly to keep social peace among unemployed workers. [119]

Monopoly capital is able to externalize many of its operating expenses on the state; and since the state’s expenditures indirectly increase the productivity of labor and capital at taxpayer expense, the apparent rate of profit is increased. “In short, monopoly capital socializes more and more costs of production.” [120]

O’Connor listed several ways in which monopoly capital externalizes its operating costs on the political system:

Capitalist production has become more interdependent — more dependent on science and technology, labor functions more specialized, and the division of labor more extensive. Consequently, the monopoly sector (and to a much lesser degree the competitive sector) requires increasing numbers of technical and administrative workers. It also requires increasing amounts of infrastructure (physical overhead capital) — transportation, communication, R&D, education, and other facilities. In short, the monopoly sector requires more and more social investment in relation to private capital…. The costs of social investment (or social constant capital) are not borne by monopoly capital but rather are socialized and fall on the state. [121]

The general effect of the state’s intervention in the economy, then, is to remove ever increasing spheres of economic activity from the realm of competition in price or quality, and to organize them collectively through organized capital as a whole.

Notes: 

106. Baran and Sweezy, Monopoly Capital, p. 108.

107. Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History 1900-1916 (New York: The Free Press of Glencoe, 1963) 3.

108. Chandler, The Visible Hand, p. 316.

109. Ibid., p. 331.

110. Paul Sweezy, “Competition and Monopoly,” Monthly Review (May 1981), pp. 1-16.

111. Kolko, Triumph of Conservatism, p. 58.

112. Ibid., pp. 98-108. In the 1880s, repeated scandals involving tainted meat had resulted in U.S. firms being shut out of several European markets. The big packers had turned to the government to inspect exported meat. By organizing this function jointly, through the state, they removed quality inspection as a competitive issue between them, and the government provided a seal of approval in much the same way a trade association would. The problem with this early inspection regime was that only the largest packers were involved in the export trade, which gave a competitive advantage to the small firms that supplied only the domestic market. The main effect of Roosevelt’s Meat Inspection Act was to bring the small packers into the inspection regime, and thereby end the competitive disability it imposed on large firms. Upton Sinclair simply served as an unwitting shill for the meat-packing industry.

113. Butler Shaffer, Calculated Chaos: Institutional Threats to Peace and Human Survival (San Francisco: Alchemy Books, 1985), p. 143.

114. Ibid., p. 268.

115. Ibid., p. 275.

116. Butler Shaffer, In Restraint of Trade: The Business Campaign Against Competition, 1918-1938 (Lewisburg: Bucknell University Press, 1997).

117. Ibid., pp. 82-84.

118. Kolko, Triumph of Conservatism, p. 287.

119. James O’Connor, Fiscal Crisis of the State (New York: St. Martin’s Press, 1973), pp. 6-7.

120. Ibid., p. 24.

121. Ibid., p. 24.