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 SEK3’s “Counter-Economics Our Means” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with SEK3’s “Counter-Economics Our Means“.

$1.00 for the first copy. $0.60 for every additional copy.

Counter-Economics is the practice of direct action in economic life — the cultivation of economic relationships that evade, avoid, and defy both the State and the legally-compliant, corporate dominated white-market economy. “Counter-Economics: Our Means” is the classic presentation of Counter-Economics by the man who first coined the concept and developed the theory, Samuel Edward Konkin III of the Movement of the Libertarian Left. The essay reprinted here was originally published as Chapter 3 of the New Libertarian Manifesto (1980), first published by Anarcho­sam­is­dat Press, then in later editions by Koman Publishing Co. / KoPubCo.

“The function of the pseudo-science of Establishment economics, even more than making predictions . . . for the ruling class, is to mystify and confuse the ruled class as to where their wealth is going and how it is taken. An explanation of how people keep their wealth and property from the State is then Counter-Est­ab­lish­ment economics, or Counter-Economics for short. The actual practice of human actions that evade, avoid and defy the State is counter-economic activity. . . .”

“Now we can see clearly what is needed to create a libertarian society. One the one hand we need the edu­cat­ion of the libertarian activists and the consciousness-rais­ing of counter-economists to liber­tar­ian understanding and mutual sup­portiveness. . . . On the other hand, we must defend our­selves against the vested interests or at the very least lower their oppression as much as pos­sible. If we eschew reformist activity as counter-productive, how will we achi­eve that?

“One way is to bring more and more people into the counter-eco­n­omy and lower the plunder available to the State. . . Slowly but steadily we will move to the free society turning more counter-economists onto libertarianism and more libertarians onto counter-economics, finally integrating theory and practice. The counter-economy will grow and spread to the next step we saw in our trip backward, with an ever-larger agorist sub-society embedded in the statist society. . .”

Samuel Edward Konkin III (1947–2004) was an anarchist libertarian active from the late 1960s until his untimely death in 2004. Founder of the Movement of the Libertarian Left and editor of several irregularly published movement papers (New Libertarian Notes, New Libertarian Weekly, New Libertarian), he became an influential critic of smaller-government reform­ism, electoral politics, and the “Libertarian” Party. He is best known for his role in developing the philosophy of agorism, a direct-action movement of revolutionary market anarchism, to be achieved through the conscious practice black and grey market activities to grow the ‘counter-economy.’

(Emilie Rensink at the Anti-Media has a really, really good basic intro post to independent journalism. Go check that out over here. Read this blog, split up into two parts, when you’re done.)

I’ve been on a podcast binge recently, thanks to my job graciously granting me a forced, unpaid two-week vacation. Over the past couple of days I’ve listened to dozens of podcasts, including a more objective analysis of a few episodes of my own show. I’ve got podcasting on the brain.

If we’re friends (all of you are now my friends), you know I’ve been podcasting for years. I’ve done a music show, many political shows, an attempt at a straight news podcast for my college paper, and more. I recently worked on a freelance piece for a podcast called Radio Dispatch.

Let’s be honest, everyone is podcasting, and no one outside of the NPR bubble is doing it in the studio. One of the most popular podcasts around, WTF with Marc Maron, is recorded in the dude’s garage. Another popular show I listen to is an unedited recording of a Skype call. Podcasting is an incredibly accessible medium, and you can start doing it almost immediately – no studio required.

Recording Equipment

So, if you’ve decided to start podcasting, take out your phone. Most smartphones come with native recording apps now, and they produce sound of variable quality. I was using my iPhone 4s and iPod 3 to record whole episodes, from the interviews to the monologues, and while the sound wasn’t great, it was better than most basic digital recorders – plus, it didn’t cost me anything.

The native recording apps are great if you’re just getting used to talking into a microphone for any extended period of time, but they’re not the best options available. There are several great free iPhone apps that produce professional broadcast quality sound, including Soundcloud, the Tascam PCM Recorder, 1st Video, Hindenburg Field Recorder Lite, and more. A lot of those apps are also available on Android phones as well.

(Don’t have a smartphone? You can still podcast. BlogTalkRadio is a free solution, where you can host a live talk show straight from your phone. And if you’re interested in getting a smartphone but don’t want to enter into a contract with AT&T, Verizon, or other carriers, Motorola has made a phone that only costs $179 unlocked – six times cheaper than the full retail price of the average contracted smartphone – and is just as powerful.)

If you’re not me, and you don’t have two phones lying around (one has been deactivated but I can still use its microphone), it’s going to be difficult to interview someone hundreds of miles away. Skype is a good internet call program and it’s what I use, but there are others out there that aren’t hindered by the bloated carcass of Microsoft.

Editing Equipment

If you have a computer that runs Windows, Mac or Linux and live on a budget of “free,” Audacity is hands-down the best audio editing software. Coincidentally, it’s also the only software I’m going to recommend here; Adobe Audition is much more powerful and comprehensive, but its current asking price of $19.99/month via Creative Cloud is a bit steep. Also, Audition is incredibly complicated – while Audacity suffers from its own problems of initial opacity, Audition takes that to the next level. Basically, don’t bother with it unless you already know what you’re doing (in which case, why are you here?).

Another thing I’m going to recommend is external storage. Whether you decide to do this the free way and take advantage of cloud storage or bite the budget bullet and buy an actual brick you can put on your desk and take with you when you’re done, external storage is incredibly important. Recording audio takes up a lot of room on a hard drive if you’re not compressing the files to within a hair’s breadth of their lives, and if your computer isn’t pre-built with 131524512134TB of storage, you’re gonna have a bad time once you’ve collected more than 24 hours’ worth of audio.

Finally, I wish I could say that the computer you use isn’t important, and in some senses that’s true, but I started on a laptop that used Windows 7, I went backwards to early-version Windows XP, and now I’m on a Linux machine that I’m 89 percent certain isn’t configured properly. It matters. Oh god, does it matter. Use what you have, but if an opportunity arises to get a usable, faster computer for cheap, do it. Don’t even hesitate. (And if you have a Chromebook, god help you.)

Recording Environment

Your environment is as important, if not more so, than your equipment. You can have all the best microphones and soundboards and fancy studio tools the market has to offer, but if you’re sitting in the middle of a construction zone, you’re going to have a bad time.

Find a place – it doesn’t have to be your home – where everything is reasonably quiet, then make it ten times quieter. If you or your friends have a bunch of egg cartons lying around, use those as a do-it-yourself form of soundproofing. Some producers just hide their heads and the microphone under a blanket and they get good results. Try to minimize as much background noise as you can, especially if you use your smartphone.

(Next week: Part Two – Find your voice)

James Tuttle alerted me to an appendix discussing Hayek’s conception of coercion in Murray Rothbard’s, The Ethics of Liberty. It serves as the jumping off point for a broader discussion of what constitutes coercion. Let us begin by contrasting the definitions of coercion employed by Hayek and Rothbard. Rothbard defines coercion thus:

the invasive use of physical violence or the threat thereof against someone else’s person or (just) property

Rothbard provides several quotations of Hayekian definitions of coercion. The first one goes:

control of the environment or circumstances of a person by another (so) that in order to avoid greater evil, he is forced to act not according to a coherent plan of his own but to serve the ends of another

He also quotes Hayek thusly:

Coercion occurs when one man’s actions are made to serve another man’s will, not for his own but for the other’s purpose.

The third relevant Hayek statement quoted goes:

the threat of force or violence is the most important form of coercion. But they are not synonymous with coercion, for the threat of physical force is not the only way coercion can be exercised.

Hayek clearly embraces a more expansive definition of coercion than Rothbard does. This brings us to the central question of what kind of response to non-physical violence coercion should be sanctioned on libertarian principle. One guide to answering this question can be found in the principle of proportionality. If I aggressively verbally abuse or ostracize you; shooting me would be disproportionate to the offense. On a similar note, the refusal of service doesn’t justify a violent response either. That doesn’t make it any less odious.

An expansive definition of coercion allows libertarians to achieve a greater depth of understanding about the various ways in which people can be coerced. If we wish to comprehensively eradicate initiatory coercion; we will have to understand the many ways in which it can manifest itself. Apart from the obvious use of physical force; there is the use of economic reward and punishment and social ostracism. Both of which can be used to control people.

The solution to dealing with these kinds of controls is to make use of non-state non-violent protest. If people are unjustly marginalized through social ostracism, we libertarians should come to their aid through social pressure. When people are controlled through economic reward and punishment, there should be a concerted effort to help them achieve greater economic independence. These solutions are necessary to achieve an integrated approach to dealing with coercion.

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

How were existing institutional interests able to thwart the revolutionary potential of electrical power, and divert neotechnic technologies into paleotechnic channels? The answer is that the state tipped the balance.

The state played a central role in the triumph of mass-production industry in the United States.

The state’s subsidies to long-distance transportation were first and most important. Large manufacturing firms presupposed a national market built on the national railroad network. A high-volume national transportation system was an indispensable prerequisite for big business.

We quoted Mumford’s observation above, that the neotechnic revolution offered to substitute industrialization by local economic development for reliance on long-distance transport. State policies, however, tipped the balance in the other direction: they artificially shifted the competitive advantage toward industrial concentration and long-distance distribution.

Alfred Chandler, a leading enthusiast of the large mass-production corporation, himself admitted as much: all the advantages he claimed for mass production presupposed a high-volume, high-speed, high-turnover distribution system on a national scale, without regard to whether the costs of the latter exceeded the alleged benefits of the former..

…[M]odern business enterprise appeared for the first time in history when the volume of economic activities reached a level that made administrative coordination more efficient and more profitable than market coordination. [20]

…[The rise of administrative coordination first] occurred in only a few sectors or industries where technological innovation and market growth created high-speed and high-volume throughput. [21]

William Lazonick, a disciple of Chandler, described the process as obtaining “a large market share in order to transform the high fixed costs into low unit costs….” [22]

The railroad and telegraph, “so essential to high-volume production and distribution,” were in Chandler’s view what made possible this steady flow of goods through the distribution pipeline. [23]

The primacy of such state-subsidized infrastructure is indicated by the very structure of Chandler’s book. He begins with the railroads and telegraph system, themselves the first modern, multi-unit enterprises. [24] And in subsequent chapters, he recounts the successive evolution of a national wholesale network piggybacking on the centralized transportation system, followed by a national retail system, and only then by large-scale manufacturing for the national market. A national long-distance transportation system led to mass distribution, which in turn led to mass production.

The revolution in the processes of distribution and production rested in large part on the new transportation and communications infrastructure. Modern mass production and mass distribution depend on the speed, volume, and regularity in the movement of goods and messages made possible by the coming of the railroad, telegraph and steamship. [25]

The coming of mass distribution and the rise of the modern mass marketers represented an organizational revolution made possible by the new speed and regularity of transportation and communication. [26]

…The new methods of transportation and communication, by permitting a large and steady flow of raw materials into and finished products out of a factory, made possible unprecedented levels of production. The realization of this potential required, however, the invention of new machinery and processes. [27]

We can’t let Chandler get by without challenging his implicit assumption (shared by many technocratic liberals) that paleotechnic industry was more efficient than the decentralized, small-scale production methods of Kropotkin and Borsodi. The possibility never occurred to him that massive state intervention, at the same time as it enabled the revolutions in corporate size and capital-intensiveness, might also have tipped the balance between alternative forms of production technology.

First, the national railroad system simply never would have come into existence on such a scale, with a centralized network of trunk lines of such capacity, had not the state rammed the project through.

Piore and Sabel describe the enormous capital outlays, and the enormous transaction costs to be overcome, in creating a national railroad system. Not only the startup costs of actual physical capital, but those of securing rights of way, were “huge”:

It is unlikely that railroads would have been built as quickly and extensively as they were but for the availability of massive government subsidies.

Other transaction costs overcome by government, in creating the railroad system, included the revision of tort and contract law (e.g., to exempt common carriers from liability for many kinds of physical damage caused by their operation). [28]

According to Matthew Josephson, for ten years or more before 1861, “the railroads, especially in the West, were ‘land companies’ which acquired their principal raw material through pure grants in return for their promise to build, and whose directors… did a rushing land business in farm lands and town sites at rising prices.”

For example, under the terms of the Pacific Railroad bill, the Union Pacific (which built from the Mississippi westward) was granted twelve million acres of land and $27 million worth of thirty-year government bonds. The Central Pacific (built from the West Coast eastward) received nine million acres and $24 million worth of bonds. [29]

An engineer named Judah, an early enthusiast for what became the Central Pacific, assured potential investors, “that it could be done — if government aid were obtained. For the cost would be terrible.” Collis Huntington, the leading promoter for the project, engaged in a sordid combination of strategically placed bribes and appeals to communities’ fears of being bypassed, in order to extort grants of “rights of way, terminal and harbor sites, and… stock or bond subscriptions ranging from $150,000 to $1,000,000” from a long string of local governments that included San Francisco, Stockton, and Sacramento. [30]

Absent the land grants and government purchases of railroad bonds, the railroads would likely have developed instead along the initial lines described by Mumford: many local rail networks linking communities into local industrial economies. The regional and national interlinkages of local networks, when they did occur, would have been fewer and smaller in capacity. The comparative costs of local and national distribution, accordingly, would have been quite different. In a nation of hundreds of local industrial economies, with long-distance rail transport much more costly than at present, the natural pattern of industrialization would have been to integrate small-scale power machinery into flexible manufacturing for local markets.

Instead, the state artificially aggregated the demand for manufactured goods into a single national market, and artificially lowered the costs of distribution for those serving that market. In so doing, it drastically increased both market areas and predominant firm size. In effect, it created an artificial ecosystem to which large-scale, mass-production industry was best “adapted.”

The first organisms to adapt themselves to this artificial ecosystem, as recounted by Chandler, were the national wholesale and retail networks, with their dependence on high turnover and dependability. Then, piggybacked on them, were the large manufacturers serving the national market. But they were only “more efficient” in terms of their more efficient exploitation of an artificial environment which itself was characterized by the concealment and externalization of costs. With all the concealed and externalized costs fully subsumed into the price of mass-produced goods, rather than shifted onto society or the taxpayer, it is likely that the overall cost of goods produced flexibly on general-purpose machinery for local markets would have been less than that of mass-produced goods.

Besides almost single-handedly creating the artificially unified and cheap national market without which national manufacturers could not have existed, the railroad companies also actively promoted the concentration of industry through their rate policies. Piore and Sabel argue that “the railroads’ policy of favoring their largest customers, through rebates,” was a central factor in the rise of the large corporation. Once in place, the railroads — being a high fixed-cost industry — had

a tremendous incentive to use their capacity in a continuous, stable way. This incentive meant, in turn, that they had an interest in stabilizing the output of their principal customers — an interest that extended to protecting their customers from competitors who were served by other railroads. It is therefore not surprising that the railroads promoted merger schemes that had this effect, nor that they favored the resulting corporations or trusts with rebates.

“Indeed, seen in this light, the rise of the American corporation can be interpreted more as the result of complex alliances among Gilded Age robber barons than as a first solution to the problem of market stabilization faced by a mass-production economy.” [31]

Second, the American legal framework was transformed in the mid-nineteenth century in ways that made a more hospitable environment for large corporations operating on a national scale. Among the changes were the rise of a general federal commercial law, general incorporation laws, and the status of the corporation as a person under the Fourteenth Amendment. The functional significance of these changes on a national scale was analogous to the later effect, on a global scale, of the Bretton Woods agencies and the GATT process: a centralized legal order was created, prerequisite for their stable functioning, coextensive with the market areas of large corporations.

The federalization of the legal regime is associated, in particular, with the recognition of a general body of federal commercial law in Swift v. Tyson (1842), and with the application of the Fourteenth Amendment to corporate persons in Santa Clara County v. Southern Pacific Railroad Company (1886).

Still another component of the corporate legal revolution was the increased ease, under general incorporation laws, of forming limited liability corporations with permanent entity status apart (severally or collectively) from the shareholders.

Arguably, as Robert Hessen and others have made a case [32], corporate entity status and limited liability against creditors could be achieved entirely through private contract. Whether or not that is so, the government has tilted the playing field decisively toward the corporate form by providing a ready-made and automatic procedure for incorporation. In so doing, it has made the corporation the standard or default form of organization, reduced the transaction costs of establishing it relative to what would prevail were it negotiated entirely from scratch, and thereby reduced the bargaining power of other parties in negotiating the terms on which it operates.

Third, not only did the government indirectly promote the concentration and cartelization of industry through the railroads it had created, but it did so directly through patent law. Mass production, as we will see below, requires large business organizations capable of exercising sufficient power over their external environment to guarantee the consumption of their output. Patents promoted the stable control of markets by oligopoly firms through the control, exchange and pooling of patents. [33]

These were the conditions present at the outset of the mass production revolution, in which the development of the corporate industrial economy began. In the absence of these necessary preconditions, there simply would not have been a single national market or large industrial corporations serving it. Rather than being adopted into the framework of the paleotechnic factory system, the introduction of electrical machinery would likely have followed its natural course and lived up to its unique potential: powered machinery would have been incorporated into small-scale production for local markets, and the national economy would have developed as “a hundred Emilia-Romagnas.”

But these were only the necessary conditions at the outset. As we shall see below, the growth of big government continued to parallel that of big business, introducing newer and larger-scale forms of political intervention to address the corporate economy’s increasing tendencies toward destabilization, and to insulate the giant corporation from the market forces that would otherwise have destroyed it.

Notes: 

20. Alfred D.Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge and London: The Belknap Press of Harvard University Press, 1977), p. 8.

21. Ibid., p. 11.

22. William Lazonick, Business Organization and the Myth of the Market Economy (Cambridge, 1991), pp. 198-226.

23. Chandler, The Visible Hand, p. 79.

24. Ibid., pp. 79, 96-121.

25. Ibid., p. 209.

26. Ibid., p. 235.

27. Ibid., p. 240.

28. Piore and Sabel, pp. 66-67.

29. Matthew Josephson, The Robber Barons: The Great American Capitalists 1861-1901 (New York: Harcourt, Brace & World, Inc., 1934, 1962), pp. 77-78.

30. Ibid., pp. 83-84.

31. Piore and Sabel, pp. 66-67.

32. Robert Hessen, In Defense of the Corporation (Stanford, Calif.: Hoover Institution, 1979).

33. For a detailed account of the role of patents in American industrial history, see my previous C4SS paper, “Intellectual Property: A Libertarian Critique” C4SS Paper No. 2 (Summer 2009). See especially the material quoted from David Noble, America by Design: Science, Technology, and the Rise of Corporate Capitalism (New York: Alfred A. Knopf, 1977).

In an interview with Fox News curmudgeon Bill O’Reilly, US president Barack Obama insists that the Internal Revenue Service’s “flagging” and harassment of Tea Party and other dissident political groups was the result of “boneheaded decisions” but “not even a smidgen of corruption.”

While the American political right is having a good guffaw about that, there’s every reason to believe Obama.

“Corruption” implies an otherwise honest and diligent institution straying from its core mission. That’s clearly not what happened here.

Oh, I suppose the case could be made that the American government has strayed from the mission described in the Declaration of Independence — “to secure these rights [life, liberty and the pursuit of happiness]” — but Obama’s hardly to blame for that. It was probably a done deal by the time George Washington led an army through Pennsylvania to cow unwilling “taxpayers,” and certainly by the time Thomas Cooper and Harry Croswell were prosecuted for “libel” of, respectively, John Adams and Thomas Jefferson.

But let’s be honest with ourselves: The difference between a government and a street gang is that when the street gang mugs, extorts, rapes or assaults you, its enforcers usually don’t pretend that they’re doing it to you for your own good. And when they do, the pretense isn’t very convincing.

The dual purposes of the IRS, as of every other executive branch institution, are to milk the cattle (that’s you and me) on behalf of the political class and to suppress opponents of, or threats to, the  current establishment (the purpose of the legislative branch is to pre-plan the milking and suppression; the purpose of the judicial branch is to justify the milking and suppression after the fact as required).

That’s what the state does. That’s all the state does. That’s what it was designed to do. Any appearances to the contrary are window dressing.

All the kvetching, whether it’s Republicans groaning about IRS harassment of their astroturf operations or Democrats whining that Chris Christie closed some traffic lanes on a bridge, is just internal bickering of the sort two schoolyard bullies might engage in while jointly beating down the other kids for their lunch money.

The problem with political government is not that it’s “corrupt.” It’s that way by design. The problem with political government is that we put up with it.

Why do we put up with it? For the same reason all kinds of victims put up with all kinds of predators: We’re convinced we have to.

Some of us, like victims of long-term domestic abuse, have allowed ourselves to be convinced that it’s “for our own good” and that we “can’t do without” our tormentors. That’s sad, but understandable.

Others understand the nature of our victimization, but just haven’t found a convincing pathway out of the situation. That’s understandable, too, since of  the “reforms,” “solutions” and “changes” put in front of us for consideration, all but one are shams designed to perpetuate the status quo.

The only workable solution — and for that very reason the most suppressed, harassed and reviled of all suggested remedies — is dissolution of the gang in its entirety; that is, abolition of the state.

We don’t need the politicians or their cronies. We don’t have to put up with them. And we should stop doing so.

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 Ernest Lesigne’s “Socialism Without Statism” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with Ernest Lesigne’s “Socialism Without Statism“.

$1.00 for the first copy. $0.60 for every additional copy.

This booklet contains three provocative letters on socialism, government and property by the French mutualist journalist and historian Ernest Lesigne; three letters which constitute theses on freed-market anti-capitalism, and three defenses of a smallholder, co-operative economy as the only liberating solution to the social problem. The three letters in this collection are:

These “Socialistic Letters” are selections from a series of twelve letters published by Lesigne in the French paper Le Radical during 1887. The three appearing here in English were translated by the American individualist anarchist Benjamin Tucker, and re-printed in his newspaper Liberty in the same year.

“The entire code of law is the book of guarantees imposed to prevent property, the means of production, the instru­ment of liberty, dignity, equality, from passing out of the hands of the primitive monopolist into those of the con­tem­p­o­r­ary producer; the Code is the isolation of servants con­front­ed with the coalition of masters; it is the pro­hib­it­ion of real con­tract between employer and employee; it is the constraint of the latter to accept from the former exactly the minimum of wages indispensable to sub­sist­ence; and in any case where all these guarantees may have been vain, where a few laborers, by a fortunate stroke, may have succeeded in accumulating a little cap­it­al, the Code is a trap set to catch these little savings, the canal­iz­ation ingeniously organized so that all that has tem­por­ar­ily left the hands of the monopolist may return to them by an adroit system of drainage, – so that the water, as the saying is in the villages, may always go to the river. . . .”

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 natural course of things, according to Borsodi, was that the “process of shifting production from the home and neighborhood to the distantly located factory” would have peaked with “the perfection of the reciprocating steam-engine,” and then leveled off until the invention of the electric motor reversed the process and enabled families and local producers to utilize the powered machinery previously restricted to the factory. [9] But it didn’t happen that way.

Michael Piore and Charles Sabel described a fork in the road, based on which of two possible alternative ways was chosen for incorporating electrical power into manufacturing. The first, more in keeping with the unique potential of the new technology, was to integrate electrically powered machinery into small-scale craft production: “a combination of craft skill and flexible equipment,” or “mechanized craft production.”

Its foundation was the idea that machines and processes could augment the craftsman’s skill, allowing the worker to embody his or her knowledge in ever more varied products: the more flexible the machine, the more widely applicable the process, the more it expanded the craftsman’s capacity for productive expression.

The other was to adapt electrical machinery to the preexisting framework of paleotechnic industrial organization — in other words, what was to become twentieth century mass-production industry. This latter alternative entailed breaking the production process down into its separate steps, and then substituting extremely expensive and specialized machinery for human skill. “The more specialized the machine — the faster it worked and the less specialized its operator needed to be — the greater its contribution to cutting production costs. [10]

The first path, unfortunately, was for the most part the one not taken; it has been followed only in isolated enclaves, particularly in the assorted industrial districts in Europe. The resurgence of relocalized, networked production in the latter days of Sloanist mass production — most notably in Toyota’s network of suppliers, and in Emilia-Romagna and the rest of the “Third Italy” — was based on a resurrected version of the first path.

The second, mass-production model became the dominant form of industrial organization. Neotechnic advances like electrically powered machinery, which offered the potential for decentralized production and were ideally suited to a fundamentally different kind of society, have so far been integrated into the framework of mass production industry.

Mumford argued that the neotechnic advances, rather than being used to their full potential as the basis for a new kind of economy, were instead incorporated into a paleotechnic framework. Neotechnic had not “displaced the older regime” with “speed and decisiveness,” and had not yet “developed its own form and organization.” Mumford used Spengler’s idea of the “cultural pseudomorph” to illustrate the process: “…in geology… a rock may retain its structure after certain elements have been leached out of it and been replaced by an entirely different kind of material. Since the apparent structure of the old rock remains, the new product is called a pseudomorph.”

A similar metamorphosis is possible in culture: new forces, activities, institutions, instead of crystallizing independently into their own appropriate forms, may creep into the structure of an existing civilization…. As a civilization, we have not yet entered the neotechnic phase…. [W]e are still living, in Matthew Arnold’s words, between two worlds, one dead, the other powerless to be born. [11]

Emerging from the paleotechnic order, the neotechnic institutions have nevertheless in many cases compromised with it, given way before it, lost their identity by reason of the weight of vested interests that continued to support the obsolete instruments and the anti-social aims of the middle industrial era.

Paleotechnic ideals still largely dominate the industry and the politics of the Western World…. To the extent that neotechnic industry has failed to transform the coal-and-iron complex, to the extent that it has failed to secure an adequate foundation for its humaner technology in the community as a whole, to the extent that it has lent its heightened powers to the miner, the financier, the militarist, the possibilities of disruption and chaos have increased. [12]

True: the industrial world produced during the nineteenth century is either technologically obsolete or socially dead. But unfortunately, its maggoty corpse has produced organisms which in turn may debilitate or possibly kill the new order that should take its place: perhaps leave it a hopeless cripple. [13]

The new machines followed, not their own pattern, but the pattern laid down by previous economic and technical structures. [14]

The fact is that in the great industrial areas of Western Europe and America…, the paleotechnic phase is still intact and all its essential characteristics are uppermost, even though many of the machines it uses are neotechnic ones or have been made over — as in the electrification of railroad systems — by neotechnic methods. In this persistence of paleotechnics… we continue to worship the twin deities, Mammon and Moloch…. [15]

We have merely used our new machines and energies to further processes which were begun under the auspices of capitalist and military enterprise: we have not yet utilized them to conquer these forms of enterprise and subdue them to more vital and humane purposes…. [16]

Not alone have the older forms of technics served to constrain the development of the neotechnic economy: but the new inventions and devices have been frequently used to maintain, renew, stabilize the structure of the old social order…. [17]

The present pseudomorph is, socially and technically, third-rate. It has only a fraction of the efficiency that the neotechnic civilization as a whole may possess, provided it finally produces its own institutional forms and controls and directions and patterns. At present, instead of finding these forms, we have applied our skill and invention in such a manner as to give a fresh lease of life to many of the obsolete capitalist and militarist institutions of the older period. Paleotechnic purposes with neotechnic means: that is the most obvious characteristic of the present order. [18]

For Mumford, Soviet Russia was a mirror image of the capitalist West in shoehorning neotechnic technology into a paleotechnic institutional framework. Despite the neotechnic promise of Lenin’s “electrification plus Soviet power,” the Soviet aesthetic ideal was that of the Western mass-production factory: “the worship of size and crude mechanical power, and the introduction of a militarist technique in both government and industry….” [19]

Notes: 

9. Ralph Borsodi, Prosperity and Security (New York and London: Harper & Brothers, 1938), p. 182.

10. Michael J. Piore and Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity (New York:
HarperCollins, 1984), pp. 4-6, 19.

11. Mumford, Technics and Civilization, p. 265.

12. Ibid., pp. 212-13.

13. Ibid., p. 215.

14. Ibid., p. 236.

15. Ibid., p. 264.

16. Ibid., p. 265.

17. Ibid., p. 266.

18. Ibid., p. 267.

19. Ibid., p. 264.

Recently, a rebuttal of my previous article “Anarcho-Capitalism is Impossible” was brought to my attention. The author, Christopher Cantwell, made some points that are worth addressing and my own thoughts on the matter have shifted somewhat over time. Therefore, I think it would be worth revisiting the topic with fresh eyes.

In his introductory paragraphs, he defines “the left” as being basically anti-propertarian, and socialism as the state ownership of property. Anti-propertarian in this case would mean against anyone but the state owning property. Under these definitions, there’s no such thing for sure as left-libertarianism or anarcho-socialism. Socialism is a pretty nebulous word, in fact, so is the concept of being “left” as opposed to “right” wing. Capitalism is equally nebulous, and yet has a concrete historical instance. One of the concepts I was trying to lay out in my original essay was that if one judged “capitalism” by its concrete history, and not its various theoretical definitions, then anarcho-capitalists were certainly anarchists, but certainly not “capitalists” because the changes they would make in society would make the historical appearance of “capitalism” impossible. This is in opposition to what anarcho-socialists usually claim which is that ancaps are capitalists, but not anarchists. This confusion arises I believe because of conflation problems (commonly known as the “xaxlebax” problem, after a thought exercise in an essay by Roderick Long: “Left and Right, 40 Years Later”). Basically, what is being conflated in people’s minds is the free market and the historical, actual economy we think of as “capitalism”. This conflation, I believe, is a mistake.

Cantwell makes two major points against my original essay that I think are fair criticisms. The first is that I wrote that “Under anarchism, mass accumulation and concentration of capital is impossible.” Cantwell argues that accumulation of capital will go on even more so than under our current system. I happen to currently agree, but in a way that will make heavy concentrations of capital unlikely or in fact impossible. I did not distinguish between capital accumulation and capital concentration properly, and it’s fair to attack my statement on the accumulation side. My apologies, I was wrong to conflate the two concepts as I did. Secondly, and sort of relatedly, in my essay I claimed that the protection of large concentrations of capital would (at some level) become prohibitively expensive, to the point where it became basically a losing proposition. He knocks that point down fairly well I think. I do think that “raids” will make widespread absentee property ownership extremely difficult to defend without great expense, but not necessarily impossible. And over time, if I am right about the overall wealth level in society rising, then this aspect of things will die out anyway.

This brings me to the “revisitation” part of my essay. The main distinguishing “negative” features of “capitalism” as seen by the left are related to the tyranny of the boss over the worker and the tyranny of commerce over impoverished consumers. Both of these root problems are actually related to a scarcity of capital in relation to either labor, or in relation to effective demand. If you go into a wealthy community, the problems of “alienation” and reduction of relations to the “cash nexus” don’t exist between wealthy people. Or at least not so you’d notice it. I happen to have good reason to believe that this scarcity of capital is created by the state. The current owners of capital don’t want capital to expand willy nilly, because that dilutes the relative power and value of the capital they possess. If you had a means of making, let’s say smartphones, at a very low marginal cost, and for an average-good quality, you would not want other people to also have this means, in fact the less people that had the means to produce those phones the better off you would be. But wouldn’t the owners of capital want everyone else’s goods to be non-scarce? Well, sometimes, but not always, and plus it’s just not that important to them. When you reach a certain level of wealth, it’s not about affording consumer goods anymore. Everything is relatively inexpensive for you, so what’s more important then having cheaper yachts is making sure that you stay on top, and if that means you have to pay 30% more for your yacht, that’s fine. In addition note that it’s practically a cliche that at that level of wealth, good-exclusivity (“This is a genuine Able-Dable bag made by hand by Mr. Able-Dable himself”) is more important than expense. These factors are related. Good-exclusivity is a sign that you are at a level of wealth where you prefer absolute scarcity of capital to absolute abundance, because your relative level of abundance is so high. You’re trading a slight percentage increase in consumer spending to get power over the market. It is exactly this power over the market which becomes impossible under anarchism.

The means by which the state acts to prevent the overall stock of capital from growing too quickly and/or from spreading too widely are too numerous to mention in one short essay. But some of the main ones are War, Chartered Banking and Licensing. War is pretty obviously not always just a grab for land and people, but a destruction of resources. War and chartered banking go hand in hand to drain the overall level of capital through deficit spending. Almost no nation ever pays for a war through direct taxation. On that note let’s look at the so-called “progressive income tax”. It’s really not that progressive when you take everything into account. It may be possible that for the ultra-wealthy, the gains they make from preventing competition and thus driving wages down is more than they lose from taxation. Licensing and permits are an obvious way that the state keeps too many “newcomers” from getting into the game, and furthermore makes it difficult for the smaller fish to get too big.

Under an anarchist economy, the overall level of capital in the society will grow enormously, especially at first. And most of these gains (in the aggregate) will not go toward those who already possess large amounts of capital, because the state has not been restricting them as much to begin with. Wage gains furthermore will tend to accelerate fastest for those who are paid less. A person with very specialized, advanced skills is already getting paid quite a bit right now. The companies who are let us say, not-under-capitalized right now are already making the highest use of these sorts of people that they can. The new jobs created by the massive explosion of capital will not be, by and large, competing for these sort of people as much. Their wages will rise, but not as quickly as for someone who is a bit less skilled and/or specialized. Furthermore, there will be an enormous explosion of production which will drive down prices, effectively multiplying everyone’s wealth level. At some point, the alienation of work and tyranny of the boss disappears. This is because when someone is no longer materially insecure, they cannot be threatened so easily.

If the workers at your shop each have 2 years worth of disposable income in the bank, they aren’t going to respond to the stick anymore. This will create a new equilibrium of course, as productivity slows, and wages rise, profit slows and the rate of acceleration of capital growth slows. But overall one is left with an economy where everything must be run with carrots. Furthermore the opportunity cost for anyone to pursue their own peculiar interests will become no longer prohibitive. Some of this will simply create a happy playful social atmosphere, and some of it will lead to new avenues of production for those who find that their interests are shared by enough people, and can find a way to make it profitable. Either way the salient features of what the social critic imagines when they see the word “capitalism” will no longer apply to such a society. Gone will be the rush hour, the asshole boss, the fear of losing your entire life because you weren’t servile enough, the daily “grind”, crushing bills to pay, overtime, the fear of your neighbors because they are even more desperate than you are.

Cantwell’s counter-essay is interesting because it touches on or even agrees with some of this analysis but then sort of drops away and turns on it at the same time. What I find among some of the more “right” or “plumb-line” libertarians, if they’re at least somewhat intelligent, is that on one hand, they seem to understand or agree that the state has impoverished the poor and middle class beyond all reckoning, but on the other hand they don’t see that this is the only thing keeping the current relation of employees to employers the way it is. They see how the financial system and regulatory sieve favor some over others, but they don’t see that this is exactly the point. To some extent it’s because they’ve made the same conflation of the free market and our “capitalist” society that the mainstream left and right have, and to some extent I think it’s because they take the liberal/progressive wing at their own words. They really do think that the state wants to level everyone out and protect the poor and downtrodden, and that somehow our current levels of poverty and inequality are despite the state’s best, albeit stupid, efforts.

To the extent that the state gives anything to the poor it is only because they don’t want mass starvation and revolution (now that they’ve broken the legs, they feel like it would be wise to offer crutches). And the wealthy in our current system are not rough and ready individualists who are being held back by the state. (All of those guys are bitter and have no money because the state already crushed them. I kid, I kid.) I believe it is this misunderstanding of the actual situation that leads anarcho-“capitalists” to call themselves that, and to sympathize on occasion with the very forces that are feeding and encouraging the state they hate so much.

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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 Barbara Sostaita & Judith Ayers’s “Liberty Beyond White Privilege” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with Barbara Sostaita & Judith Ayers’s “Liberty Beyond White Privilege“. 

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This article was originally published under the title “What Would Libertarianism Look Like, If It Wasn’t Just White People?” in August 2013 at policymic.com.

“Within today’s libertarianism, topics like racism and classism often take the back burner, or are ignored entirely. Is­sues of in­equality and poverty, solitary con­fine­ment and prison reform, women’s rights, queer and trans* abuse . . . are often met with hostility. But Black com­mun­i­t­ies, and other com­mun­it­ies of color, have long traditions of struggling for freedom. Those trad­it­ions, when acknowledged by and com­bin­ed with libertarianism, could create an em­pow­er­ing and radical message. . . .

“A true, ideological, libertarian re­nai­s­sance can, and will only, hap­pen if we learn to list­en to those who have lived under gov­ern­ment oc­cup­at­ion: those who live in poverty, are iso­lated, and lack access to resources; those who have suffered in soli­tary confinement; those of different sexual identities; those who are vict­ims of the drug war, political prisoners, sex work­ers, domestic work­ers, or undocumented per­sons. Libertar­ians need to talk, and listen to, the survivors, the ‘others,’ the voiceless and the ignored.”

Judith Ayers is a student pursuing double major in Mass Communications and Political Science at York College in Pennsylvania, who specializes in issues of education, poverty, and immigration policy, women’s and children’s issues, race, and culture and hip-hop. Barbara Sostaita is a student at Salem College focusing on International Relations and Religion. As an immigrant from Argentina, she has witnessed her parents struggle for political, social and economic freedom. Both co-authors are active within Students for Liberty, a growing worldwide network of campus groups for young libertarians.

Libertarians are used to being accused of racism.

This is often due to their position on civil rights legislation. The basis for that particular stance is to be found in the libertarian conception of property rights, freedom of association and non-aggression. Uninformed critics will miss this and attribute the libertarian position to racism. That having been said, there is something amiss in the traditional libertarian attitude on this question. Something that is worth addressing.

To begin with, the traditional libertarian position ignores the initiatory coercion that can flow from discrimination. Let us consult Roderick Long for a definition of coercion:

the forcible subjection, actual or threatened, of the person or property of another to one’s own uses, without that other’s consent.

If someone peacefully walks onto the premises of a business open to the public, they are not coercing anyone. The forcible removal of them from the property by private or public force would constitute an act of coercion.

What about mere denial of service as opposed to forcible removal? This may not involve literal physical force, but it still represents an attempt at authoritarian control of resources. This is especially true when an employee has no issue with serving someone, but the employer has set rules forbidding it.

In light of the above, it’s important for libertarians to recognize that there is nothing to be gained from expending rhetorical energy in opposing civil rights laws. The only exceptions being to demonstrate the viability and desirability of non-governmental solutions or to show how governmental solutions fail to accomplish their intended or stated goals.

The only allies one will acquire through thoughtless criticism of civil rights legislation are bigots. Aside from principled libertarians, they are the only ones who are against governmentalism of this type in this area of social life.

Does the above mean that we libertarians, concerned with civil rights, should embrace force as a solution or be less critical of the use of force? Not at all. As Sheldon Richman points out:

As I’ve written elsewhere, lunch counters throughout the American south were being desegregated years before passage of the 1964 Act. How so? Through sit-ins, boycotts, and other kinds of nonviolent, nongovernmental confrontational social action. (Read moving accounts here and here.)

The tactics of the civil rights movement were eminently libertarian. They deserve to be emulated and studied by contemporary libertarians. There are a whole host of other social problems that could be addressed by this style of direct action. Let us left-libertarians lead the way in embracing this radical approach to social change.

Amanda Marcotte discusses the tribalism of the religious right.

William Norman Grigg discusses police brutality.

David R. Hoffman discusses the NSA and CIA as criminal enterprises.

Arthur Silber discusses psychological manipulation and lying.

Arthur Silber discusses atrocity in the context of war.

Arthur Silber discusses neurosis and terror as national policy.

Arthur Silber discusses a psychologically dead culture.

Kevin Carson discusses what happens when basic services are declared a right.

Shamus Cooke discusses the top three media lies about the peace conference surrounding the Geneva Syrian peace talks.

Barbara Sostaita discusses why the liberty movement isn’t winning.

George H. Smith discusses Rudolf Rocker and the will to power.

Norman Solomon and Abba A. Solomon discusses the problems with liberal zionism and J Street.

Nile Bowie discusses security before politics.

Chase Madar discusses liberal law professors and killing.

Anthony Gregory discusses libertarian factionalism.

Thaddeus Russell discusses how nominally liberal presidents have killed.

Justin Raimondo discusses the Progressive crack up.

Peter Hart discusses apologist reporting on the Afghan War.

Nicola Perugini and Neve Gordon discuss ethnic purity policies in Israel.

Gina Luttrell discusses why acknowledging privilege exists is necessary for achieving individualism.

Stephen Zunes discusses the U.S. role in the upsurge of violence in Iraq.

Jeffrey Kaye discusses the Obama administration’s continued use of torture.

Justin Raimondo discusses the use of WW2 by contemporary warmongerers.

Laurence M. Vance discusses Nick Turse’s book on Vietnam.

Rachel Burger discusses 4 programs worth ending before welfare for the poor.

Rosa Brooks discusses the CIA and torture.

Patrick Cockburn discusses the starvation occurring in Syria.

Peter Hart discusses more apologia for the Afghan War.

Bobby Fischer plays the Queen’s Gambit for the first time and kills.

Bobby Fischer plays a fantastically creative game.

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 centralization of production in the Industrial Revolution, and the concentration of machine production in large factories, resulted mainly from the need to economize on steam power. According to Lewis Mumford,

[Gigantism] was… abetted by the difficulties of economic power production with small steam engines: so the engineers tended to crowd as many productive units as possible on the same shaft, or within the range of steam pressure through pipes limited enough to avoid excessive condensation losses. The driving of the individual machines in the plant from a single shaft made it necessary to spot the machines along the shafting, without close adjustment to the topographical needs of the work itself…. [1]

Steam power meant that machinery had to be concentrated in one place, in order to get the maximum use out of a single prime mover. According to William Waddell and Norman Bodek the typical factory, through the early 20th century, had machines lined up in long rows, “a forest of leather belts one arising from each machine, looping around a long metal shaft running the length of the shop,” all dependent on the factory’s central power plant. [2]

Electrical power put an end to this imperative. The invention of the prerequisites for electrical power — the dynamo, the alternator, the storage cell, the electric motor — and the development of small-scale electrically powered production machinery suitable for the small shop and power tools suitable for household production were, in Mumford’s schema of technological history, what separated the neotechnic era from the preceding paleotechnic era — the era of coal, steam and Dark Satanic Mills.

If the paleotechnic had been a “coal-and-iron complex,” in Mumford’s terminology, the neotechic was an “electricity-and-alloy complex.” [3] The defining features of the neotechnic were the decentralized production made possible by electricity, and the light weight and ephemeralization (to borrow a term from Buckminster Fuller) made possible by the light metals.

Electricity made possible the use of virtually any form of energy, indirectly, as a prime mover for production: combustibles of all kinds, sun, wind, water, even temperature differentials. [4] As it became possible to run free-standing machines with small electric motors, rather than running them off a single drive shaft, the central rationale for the factory system disappeared.

The decentralizing potential of small-scale, electrically powered machinery was a common theme among many writers from the late 19th century on. That, and the merging of town and village it made possible, were the central themes of Kropotkin’s Fields, Factories and Workshops. With electricity “distributed in the houses for bringing into motion small motors of from one-quarter to twelve horse-power,” it was possible to produce in small workshops and even homes. Freeing machinery up from a single prime mover ended all limits on the location of machine production. The primary justification for economy of scale, as it existed in the nineteenth century — the need to economize on horsepower — vanished when the distribution of electrical power eliminated reliance on a single source of power. [5]

The introduction of electrical power put small-scale machine production on an equal footing with machine production in the large factory.

The introduction of the electric motor worked a transformation within the plant itself. For the electric motor created flexibility in the design of the factory: not merely could individual units be placed where they were wanted, and not merely could they be designed for the particular work needed: but the direct drive, which increased the efficiency of the motor, also made it possible to alter the layout of the plant itself as needed. The installation of motors removed the belts which cut off light and lowered efficiency, and opened the way for the rearrangement of machines in functional units without regard for the shafts and aisles of the old-fashioned factory: each unit could work at its own rate of speed, and start and stop to suit its own needs, without power losses through the operation of the plant as a whole.

…[T]he efficiency of small units worked by electric motors utilizing current either from local turbines or from a central power plant has given small-scale industry a new lease on life: on a purely technical basis it can, for the first time since the introduction of the steam engine, compete on even terms with the larger unit. Even domestic production has become possible again through the use of electricity: for if the domestic grain grinder is less efficient, from a purely mechanical standpoint, than the huge flour mills of Minneapolis, it permits a nicer timing of production to need, so that it is no longer necessary to consume bolted white flours because whole wheat flours deteriorate more quickly and spoil if they are ground too long before they are sold and used. To be efficient, the small plant need not remain in continuous operation nor need it produce gigantic quantities of foodstuffs and goods for a distant market: it can respond to local demand and supply; it can operate on an irregular basis, since the overhead for permanent staff and equipment is proportionately smaller; it can take advantage of smaller wastes of time and energy in transportation, and by face to face contact it can cut out the inevitable red-tape of even efficient large organizations. [6]

Mumford’s comments on flour milling also anticipated the significance of small-scale powered machinery in making possible what later became known as “lean production.”

Neotechnic methods, which could be reproduced anywhere, made possible a society where “the advantages of modern industry [would] be spread, not by transport — as in the nineteenth century — but by local development.” The spread of technical knowledge and standardized methods would make transportation far less important. [7]

Mumford also described, in quite Kropotkinian terms, the “marriage of town and country, of industry and agriculture,” resulting from the application of further refined neotechnic horticultural techniques and the decentralization of manufacturing in the neotechnic age. [8]

Notes: 

1. Lewis Mumford, Technics and Civilization (New York: Harcourt, Brace, and Company, 1934), p. 224.

2. William H. Waddell and Norman Bodek, Rebirth of American Industry: A Study of Lean Management (Vancouver, WA: PCS Press, 2005), pp. 119-121.

3. Mumford, Technics and Civilization, p. 110.

4. Ibid., pp. 214, 221.

5. Peter Kropotkin, Fields, Factories and Workshops: or Industry Combined with Agriculture and Brain Work with Manual Work (New York: Greenwood Press, Publishers, 1968 [1898]), pp. 154., 179-180.

6. Mumford, Technics and Civilization, pp. 224-225.

7. Ibid., pp. 388-389.

8. Ibid., pp. 258-259.

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 Voltairine de Cleyre’s “to try all strange sensations…” that you purchase through the Distro, C4SS will receive a percentage. Support C4SS with Voltairine de Cleyre’s “to try all strange sensations…“. 

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The essay reprinted in this booklet was originally published as “Anarchism,” in the October 13, 1901 edition of the Anarchist movement newspaper FREE SOCIETY (ed. Abe Isaak). I’ve retitled it because that’s a boring title for an essay about Anarchism in an Anarchist newspaper, or in an Anarchist pamphlet series.

But the content is anything but: A startling, provocative, and moving statement of de Cleyre’s emerging re-conception of anarchy herself as “an Anarchist, simply, without economic label attached,” — and of anarchy as a pluralistic process of social experimentation and self-exploration, — the essay has been retitled with two of the most striking phrases appearing in the text, speaking of the freedom “to try. . .” and of the anarchic, un-ruly self as a bottomless depth of “all strange sensations.”

“I have now presented the rough skeleton of four different economic schemes entertained by Anarch­ists. Re­mem­ber that the point of agreement in all is: no com­puls­ion. Those who favor one method have no intention of forcing it upon those who favor another, so long as equal tolerance is exercised toward them­selves. . . . For myself, I believe that all these and many more could be advantageously tried in different localities; I would see the habits of the people express them­selves in a free choice in every com­mun­ity; and I am sure that distinct envi­on­ments would call out distinct adaptations. My ideal would be a con­di­t­ion in which all natural re­sources would be forever free to all, and the work­er individually able to produce for him­self sufficient for all his vital needs, if he so chose, so that he need not govern his working or not work­ing by the times and sea­s­ons of his fellows. I think that time may come; but it will only be through the dev­el­op­ment of the modes of pro­duc­t­ion and the taste of the people. Meanwhile we all cry with one voice for the free­dom to try. . . .”

“Are these all the aims of Anarchism? They are just the beginning. They outline what is demanded for the material producer. Immeasurably deeper, immeasurably higher, dips and soars the soul which has come out of its case­ment of custom and cow­ardice, and dared to claim its Self. Ah, once to stand unflinchingly on the brink of that dark gulf of passions and desires, once at last to send a bold, straight-driven gaze down into the volcanic Me, once, and in that once forever, to throw off the command to cover and flee from the knowledge of that abyss, — . . . to realize that one is. . . a bottomless, bottomless depth of all strange sensations . . . quakings and shud­der­ings of love that drives to madness and will not be controlled, hunger­ings and meanings and sobbing that smite upon the inner ear . . . To look down into that, to know the blackness, the midnight, the dead ages in oneself, to feel the jungle and the beast within, . . . — to see, to know, to feel the uttermost, — and then to look at one’s fellow, sitting across from one in the street-car, . . . and to wonder what lies beneath that commonplace exterior — to picture the cavern in him which somewhere far below has a narrow gallery running into your own. . . . Letting oneself go free, go free beyond the bounds of what fear and custom call the ‘possible,’ — this too Anarchism may mean to you, if you dare to apply it so.”

Voltairine de Cleyre (1866-1912) was a popular Anarchist and feminist writer, speaker and activist. Her contemporary and friend Emma Goldman called her “the most gifted and brilliant anarchist woman America ever produced.” She published articles in Liberty, Twentieth Century, Free Society and Mother Earth, and worked closely with libertarian communists, market anarchists, and mutualists within the Philadelphia social anarchist movement, but refused to commit herself to economic blueprints, adopting a pluralistic view of economic arrangements in any future free society.

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The Center for a Stateless Society
P.O. Box 471998
Tulsa, Oklahoma 74147
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Regular C4SS readers may have noticed the emergence of some weekly blogs here at Stigmergy. Trevor Hultner‘s been delivering  excellent media analysis and criticism every Tuesday. And Natasha Petrova brings a litany of left libertarian links with her Weekly Libertarian Leftist and Chess Review. I’ve decided to join the trend with a weekly blog on a topic I care about a lot: prison abolition. As I’ve written previously, I believe prison abolition is both a moral imperative and something we can take practical action to achieve. There are lots of people taking practical actions to help end the massive prison state that currently cages millions of people, and this blog will highlight their work.

One of my favorite prison abolitionists is Dean Spade. He’s a transgender rights activist and a founding member of the Sylvia Rivera Law Project (SRLP), a legal advocacy group that fights for transgender rights and particularly emphasizes prison abolition and the damage done by structural poverty. Next week he will be joining SRLP’s Reina Gossett for a discussion on prison abolition put on by the Barnard Center on Women. Gossett and Spade recorded an excellent video series on prison abolition. The videos deal with many issues, including everyday prison abolitionist practices, how to balance abolitionist goals with immediate needs, addressing the idea of “dangerous people” that make prisons necessary, and understanding the prison system as violently criminal in itself. Dean Spade puts it bluntly, pointing out that “The prison is the serial killer. The prison is the serial rapist.” The fourth video in particular is noteworthy, in that it addresses a topic too many on the left have ignored: the way gun control bolsters the prison system and the bigoted myths behind it. You can register for the online discussion with Spade and Gossett here. 

BCRW research assistant Carly Crane has also written an excellent blog post in relation to the event, titled Exploring Prison Abolition.  It’s a great introduction to prison abolition, discussing the connections between prison abolition and feminism, as well as prison abolition’s broader  role as a principled movement against violence.

One of the most damaging and dangerous aspects of the prison state is the way it criminalizes and cages huge numbers of immigrants who have done nothing more than peacefully cross lines drawn violently by states. Isabelle Nastasia and Jenny Marks recently published an excellent piece at Youngist that deals with immigrants’ rights from a prison abolitionist perspective. Their article uses Justin Bieber’s immigration issues as a jumping off point to discuss some vitally important issues. I highly recommend the article, which deals with the false divisions states use to sustain their structures of violence, queering immigration politics, and a variety of other key abolitionist issues.

These links provide just a few examples of the prison abolitionist action and scholarship is going on all over the United States and all around us. Under a nation state that locks up over 2 million people, such an abolitionist movement is absolutely vital.

AGORIST CLASS THEORY [PDF]: A Left Libertarian Approach to Class Conflict Analysis By Wally Conger

Foreword
Introduction
The Failure of Marxism
The Marxist Appeal
Precursors to Marxist Class Theory
Marxist Classes
The Agorist Critique of Marxist Class Theory
Libertarian Class Analysis
Radical Libertarian Class Analysis
Agorist Class Theory
Agorist Solutions for Marxist Problems
Appendix: Cui Bono? Introduction to Libertarian Class Theory (1973)

Cui Bono? Introduction to Libertarian Class Theory (1973) By Samuel Edward Konkin III

Libertarianism has been denounced by William F. Buckley as “extreme apriorism” (in reference to Murray N. Rothbard in “Notes Toward an Empirical Definition of Conservatism”). Indeed, Libertarians can willingly concede the substance of the charge, if not the pejorative implication of heresy. The fundamental libertarian premise of non-aggression — of unbending opposition to all forms of initiatory violence and coercion to life and property — gives the libertarian analyzing his societal context and seeking out ways of dealing with it a logical “razor” of exceptional keenness. With it, he can slash away the fat of special pleading of various ideologies and retain the lean meat of genuine contributions to his understanding. Perhaps no other ideology, not even Marxism, has such a quality of over-all integration and self-consistency, as indicated by the startling rapidity that this new and complex theory is transmitted to new libertarians.

What follows is an excellent example of the use of “Rothbard’s Razor” in synthesizing an approach and understanding in an area almost devoid of libertarian sources.

The author readily acknowledges that his only original contribution to this field is one of collation and organization of scattered writings absorbed during his intellectual maturation which was fortunate enough to coincide with that of Libertarianism. Above all, acknowledgement is accorded to The Libertarian Forum, Dr. Murray N. Rothbard, and the scholars he inspired.

I. Economic Analysis of Libertarian Class Theory

Dr. Rothbard has noted the inspiration he gained from John C. Calhoun that the State — which we recognize as the monopoly of legitimized coercion — divides men into two classes. The State’s systematic looting of the general public and subsequent distribution of this wealth necessarily distorts the allocation of property that would exist in a free market. By a free market, libertarians mean one in which all goods and services are voluntarily exchanged. An analysis of involuntary exchanges is provided by Power and Market by Dr. Rothbard. At the very least, the resources consumed by the individuals who make up the State’s bureaucracy constitute a net gain by these wielders of power (or they would not engage in the practice) and constitute a net loss to their victims even if the remains were distributed as equitably as possible. In practice, far more is consumed by the Statists and their chosen beneficiaries and is lost by the victims. This is the fundamental division observed by Calhoun and Rothbard: the division of society into an exploiting class of those who make a net gain by the existence of the State, and an exploited class of those who incur a net loss by the existence of the State.

The charge immediately arises that nearly everybody in the modern complex mixed economy makes gains and losses from the State’s actions. Separation and accounting is extraordinarily difficult. Libertarians must agree but respond that firstly, one can improve the moral character of one’s own life by striving to comprehend his sources of wealth, maximizing the non-coercive ones and minimizing the coercive ones, and, secondly, that those enjoying or suffering an extreme imbalance can be discerned and dealt with. Those who are obviously suffering heavy oppression deserve the priority attention from those libertarian humanists concerned with aiding and relieving victims of the State. Those who are obviously gaining overwhelmingly by the State (the “Ruling Class”) can be rightly suspected of directing State policy and becoming priority targets of those libertarian activists interested in achieving a just society.

II. Historical Analysis of Libertarian Class Theory

Here Dr. Rothbard has drawn heavily upon the studies of the German sociologist Franz Oppenheimer (The State) and his American disciple, Albert Jay Nock (Our Enemy, the State). Oppenheimer distinguished two means of acquiring wealth — the economic means and the political means. These correspond to wealth acquired voluntarily by the market and to wealth acquired coercively by power.

I have been fond of using the following paradigm to synopsize Oppenheimer’s thesis. Peaceful farmers and agorists (agora = open marketplace) are engaged in production and trade, having judges, perhaps priests, and chiefs who organize defense against predatory tribes and roving bands of thieves. These bands of savages raid such productive communities for their own parasitical gain, taking all removable wealth, including slaves, and consuming fixed wealth through fire, rape, and murder. Even if constantly successful, the leaders of these raiders soon realize that they will eventually run out of sources of wealth. The first step toward civilization is then taken by leaving behind enough wealth and populace to rebuild so that they may be raided again. The parasites cease to be fatal to their hosts. Of course, the threat of an annual raid during harvest, for example, is somewhat discouraging to the incentive of the productive victims. The more enlightened barbarians move on to the next step — occupying the agorist communities, institutionalizing and regularizing the plunder and rape (e.g., taxation, droit de seigneur). These rulers seek to counter discouragement, resentment, and rebellion by allying (or buying out) the Priests to exalt the ruling class and to convince victims that they are actually benefiting by the presences of these “protectors of order.” Later in history, this function of creating a mind-numbing mystique is taken up by Court Intellectuals as religion wanes.

The plunderers can arise internally, too. Perhaps the War Chiefs and native Priests, seeing the examples around them, convince the locals that they too need a strong standing force to defend the community against invasion by the foreign States. Creating the same mystique, the protectors become the plunderers and a new State is born.

Oppenheimer’s theory complements the Calhoun-Rothbard analysis perfectly by explaining the origins of the present-day States. For a study of actual modern nation-states and the operation of their class structures, we turn to the Revisionist Historians.

III. Revisionist Contributions to Libertarian Class Theory

World War I ruptured the liberal and radical intellectual body. Even anarchists divided on the War Question. The anti-war group among historians began delving into the records to prove the correctness of their opposition and demonstrate to the more idealistic War supporters how they were duped into serving plutocratic war “profiteers,” political chicanery, and closet Imperialism. The widespread disillusionment with the Treaty of Versailles aided such Revisionists and won general acceptance to their exposures. Charles Beard, Harry Elmer Barnes, Sidney Fay, J.W. Pain, and W.L. Langer in the U.S.; J.S. Ewart in Canada; Morel, Beazley, Dickinson, and Gooch in England; Fabré-Luce. Renouvin, and Demartial in France; Stieve, Montgelas, von Wegerer, and Lutz in Germany; and Barbagallo, Torre, and Lumbroso in Italy: these historians became quite chic, especially as leaders arose in the defeated powers to revise the terms of the Treaty, and “appeasers” in the victorious powers to accommodate them.

World War II caused a new split, with Beard, Barnes, Charles C. Tansill in the U.S., and F.J.P. Veale and A.J.P. Taylor remaining (or becoming) Revisionist on the Second War, with others going a-whoring after the new War to End All Wars. This time, the victorious powers managed to impose a “Historical Blackout” through the extensive Court Intellectuals influence in ever more State-financed Universities and historical journals on the Revisionists. The courageous dissenters were vilified as thinly-disguised Nazi-symps, though many had impeccable liberal and social-democratic credentials. Pacific Front revisionism has had some measure of success, but European Front revisionism remains a disreputable activity.

Cold War Revisionism is accepted somewhat less than WWI but more than WWII inquiry and exposure. Most encouragingly, the New Left and “deviationist Marxist” historians who were drawn into Revisionism by their antipathy to the Vietnam War have begun looking backwards for the roots of modern foreign policy.

On the Left, Weinstein and Gabriel Kolko have integrated Revisionist History on foreign policy with domestic ruling class investigation. On the Right, the Birchers have grown gradually less hysterical in their “Conspiracy Theory,” dropping their International Communist devil-theory for exposure of the machinations of U.S. plutocrats.

The Higher Circles by G. William Domhoff begins the synthesis of the varying strands of revisionism into a single sober thesis, adding the sociological surveys of C. Wright Mills “Power Elite” investigations. Domhoff, a Leftist, devotes a section of his book to an earlier rightist conspiracy theorist, Dan Smoot, and finds much of it agreeable. Since then, Smoot has been superseded by Gary Allen’s None Dare Call It Conspiracy.

IV. Libertarian Class Theory — Application to Domestic Policy

Beard goes back to the American secession from the British Empire with his Economic Interpretation of the Constitution. Libertarians tend to begin with the relatively laissez-faire period of the late Nineteenth Century in the U.S., explored by Kolko in his magnificent Triumph of Conservatism. Kolko deviates from orthodox Marxism by claiming that the wicked capitalists did not establish their rule due to inevitable concentration of economic power under capitalism, but rather plotted to gain the State’s aid in destroying an all-too-successful competitive semi-free market which threatened the long-term stability of their profits. Kolko devastatingly points out that the massive regulations of transportation and anti-trust legislation advocated by the anti-monopolistic Progressive movement was actively supported by such powerful businessmen as Andrew Carnegie, Mellon, Morgan, and Rockefeller. In 1905, the National Civics Federation was formed to combat the “anarchist” tendencies of the laissez-faire oriented National Association of Manufacturers (mostly small businessmen with little vested interest wanting to grow, not stand pat). NCF members were urged to support regulations and labor legislation to integrate the labor aristocracy as junior partners in the emerging new ruling class. Over the years, the Higher Circles developed the Council on Foreign Relations to influence U.S. State Foreign Policy (tied internationally to similar groups in Western Europe through the “Bilderbergers”) and the Committee for Economic Development for U.S. State Domestic Policy.

Recently, Ralph Nader has been astonished by the discovery that most of the Regulatory Boards are run by the very industries they were set up to control. One can only begin to imagine what the CFR-CED crowd is doing with the Wage-Price Controls. The CLIC claque is made up of equal representation of Big Business, Big Labor, and Government. Surprise, surprise.

V. Libertarian Class Theory — Application to Foreign Policy

The financing of World War I has some incredible anecdotes associated with it. For example, there were the Warburg Brothers, one financing the German War Effort, the other the Allied Effort. There were bauxite mines in France which provided aluminum for German War Planes, and the activities of the “Merchants of Death,” munitions manufacturers selling to all sides, would be comic if the millions of deaths could be dissociated.

Modern revisionist theory begins with the attempts of the Bank of England to restore the pound’s value. The massive inflation of the War made it impossible to restore it to its pre-war value in gold, and exacting reparations from Germany led to a hyperinflation and crack-up boom smashing the German economy (and led to the 1923 Putsch). The Bank’s Ashley Montagu met with American financiers in Georgia for the purpose of depreciating U.S. currency to improve the relative standing of the pound. Already, the British were clubbing their East European satellites (created between the USSR and Germany by that perfidious Treaty) into following their economic policy.

The Federal Reserve Board’s inflation of the Roaring Twenties (a boom fueled by that very same monetary expansion) led to the Crash, Depression, and Roosevelt’s fascist NRA and IRS jackbooters raiding homes to seize the recently outlawed metal, gold. And, of course, the European fascist autarchies, ripped loose from the world plutocrats’ control, engaged in barter competition with their own interest in mind, and brought on the Second World War in retaliation.

This time, the American Military-Industrial Complex was not dismantled. (See James J. Martin’s Revisionist Viewpoints for a truly horrifying speech reprinted which was given in 1940 advocating just that and telling businessmen to get with it — “it” being the coming new world order.) A new International Threat to Peace was needed, and less than two years after the end of the Second War to End All Wars, Churchill announced that “an Iron Curtain has fallen across Europe.”

Considerable investigation of plutocratic beneficiaries of the Vietnam War is underway, much less so of those benefiting from the Middle East conflict. Some libertarians have already begun to project the interests of the exploiting class power elite to predict the next War.

VI. Alternative Interpretations

A. Marx

While Marxist historical economic determinism draws many scholars in that camp to similar conclusions as those of libertarians, it contains several fatal flaws — over and above the obvious one of economic misunderstanding. The necessity for rigid adherence to a class struggle interpretation based on wealth possession rather than on the means of its acquisition and to an inevitable coming of a proletariat revolution led by organized labor forces the Marxist to judge and rationalize his conclusions to fit at all costs. Perhaps just as devastatingly, Marxism is now a “religion” justifying the existence of dozens of the States in the world, and Marxists are now playing Court Intellectuals and suppressing Revisionists in their midst.

B. Consensus

The “consensus” school, the dominant group of Court Historians in the West, deny the existence of any classes. While there may have been wicked exploiters in the past, they were routed and brought to justice by the Progressive Era, the New Deal, the Fair Deal, the New Frontier, and the Great Society, and whatever is to come. We are left to assume that all these plutocrats are receiving windfalls by the failure of previous reformers to spot all the loopholes and economic imperfections in the free market.

And if the plutocrats who gained the most from State intervention supported Roosevelt, Wilson, Roosevelt, Truman, Kennedy, Johnson, and whoever succeeds Nixon…must be a lot of accidents, coincidences, and the inability of these people to perceive their own real interests but lucking out anyways?

C. Rand

No one would accuse Ayn Rand of being a competent historian or leader of a school of historiography. Unfortunately, she does convey an implicit interpretation of history which lingers in many of those deserting Objectivism for Libertarianism. In her view, similar to the Consensus school but inverted in moral judgment, peaceful productive capitalists were engaged in making everyone well off in the Nineteenth Century, when along came these Progressive collectivists drunk on Statism and high on altruism, to ravish their profits and lay their clammy hands on their activities (strictly between consenting adults). Having absorbed too much altruist collectivism themselves, the capitalists gave up the intellectual battle for their freedom and tried to pragmatically accommodate themselves to the new system, leading them to supporting pragmatist thugs like Nixon’s “plumbers.”

While I certainly would not disagree with the need to straighten out a lot of businessmen philosophically and ethically, Rand’s ignoring (and/or ignorance) of the powerful with vested interest in the State leaves the Objectivist with the tactics of parlor debates and pamphleteering as his only defense against the guns and prisons of the Statists. What frustration the Objectivist must feel hearing that Richard Nixon has read Atlas Shrugged and still has not seen the light! If only David Rockefeller would just listen to him for a minute…

VII. Value of Libertarian Class Theory

Several good reasons have already been suggested in this article for the study and application of libertarian class theory. Understanding the nature of the enemy never hurts in dealing with him. Turning over the Rank of Vested Interest on an issue to expose the Plutocratic worms crawling out from under may turn public pressure on to force the power elite to accommodate the dissent and give up untenable activities. Convincing New Leftists and Birchers that you are, indeed, aware of the problem and you can explain the Ruling Class/Conspiracy even better should aid in recruiting. Fingering the Court Intellectuals as tools of the interests they were supposed to forsake in their supposed search for Truth and Enlightenment could shake-up a few academies and compromise the credibility of these modern Witch-Doctors purveying their sophisticated voodoo.

Murray Rothbard urges the libertarian activist to burn with a passion for justice. If this is our Quest, then Libertarian Class Theory is indispensable to the discovery of those who have visited statism upon us, and whose blood-drenched hands are pocketing the booty.

Old fashioned justice is needed for a new liberty.

[This article first appeared in New Libertarian Notes #28, December 1973.]

The 2008 global financial crisis has had far-reaching implications, depressing markets for years. Charged with US monetary policy, the Federal Reserve Bank, with its mantra of “too big to fail,” is empowered to manage the economic downturn. The central bank’s monetary policies effectively redistribute wealth to the upper tiers of society — and the proof is in the pudding. Economic mobility is restricted, in tandem with an incredible wealth gap, a shrinking middle class, growing debt and rising poverty. As the United States, and the world for that matter, continues to struggle in its recovery from the Great Recession, the implications of Fed policy are taking center stage in the political arena. The sights are set on income inequality.

What’s missing from the political discussion is any mention of the Federal Reserve at all — even as  new executive  Janet Yellen takes the reins of arguably the world’s most powerful economic institution. Even worse, the very political ideology that has created systemic poverty, the top down approach to economics, guides the current conversation.

That discussion needs to shift to the mechanisms of poverty and how to liberate ourselves from them. Until we do so, we will continue to witness a precipitous increase in wealth disparities.

Income inequality restricts market opportunity. Extreme inequality — characterized by rampant poverty — chains our inclined labor. Economist Amartya Sen describes the persistence of poverty as the robbing of human potential, stating “poverty is not just a lack of money. It is not having the capability to realize one’s full potential as a human being.” Poverty, then, is the reduction of human contributions to the market, to the commons and, ultimately, to the human condition.

Systemic poverty exists because people are not able to access or create markets. In order to alleviate poverty we need to struggle for market liberation. This calls for the rejection of authorities who wish to direct economic systems. As witnessed in bailouts, corporate aid/welfare and their subsequent restrictions to economic diversity, it is the political class that benefits from the top down approach. In the liberated market, the populace will labor to create new ways — alternative institutions and new federations — to serve one another. Outside the current system, in the true public arena, markets can create a new mutualism, social goods, common interests among market actors and individual prosperity.

Centralized authority steers our creative output away from the dreams, aspirations, ethics and labor of individuals and to the benefit of the politically connected. In the halls of power, economic policy is decided upon, announced to the populace and defended against popular protest. In this model, outside knowledge is imposed upon us. But the individual and the collective know how to better the community. The decentralized, networked, stigmergic revolution works around command and control to co-ordinate and cultivate markets.

If we are serious about tackling income inequality and systemic poverty, we must first realize that any authority over the market is illegitimate. Then, on an individual basis, we can decide to directly engage or work around the current political system to dismantle such authority. Liberated economic systems will arise out of the old order, granting each individual sustainable agency over his or her own labor.

The key to success and actualization of human potential is, as always, liberty.

We cataloged 58 “mainstream media pickups” of Center English-language op-eds (and several in translation!) in January, putting us on track to rack up more than 700 pickups in 2014 (assuming we can keep pace). That’s noteworthy, so I wanted to throw out a few thoughts on how we’re doing it:

• Before It’s News picks up nearly all of our material. We had an internal debate as to whether or not these pickups constitute “mainstream media,” and concluded that they do. BIN is a top 1,000 web site in the United States and top 2,000 worldwide, even if it doesn’t look “like most newspapers.” It has a real editorial policy and screens for newsworthiness, etc. as opposed to screening for particular ideology or whatever.
• For the last year or so, we’ve submitted selected C4SS op-eds to Counterpunch. They don’t pick up every submission we send them, but they do pick up quite a few. Once again, we discussed whether or not this constituted “mainstream media.” For me, the deciding factors were 1) that while nominally “left-wing,” Counterpunch is eclectically so, accepting material on current events from across a broad swath of the left-of-center spectrum (as opposed to being e.g. a partisan Democrat rag or a sectarian publication); and 2) that I’ve seen its print edition on “real meatspace newsstands” in the past.
• But aside from those two … debatable … publications, we’ve seen real “pickup” growth in the “regular” newspaper sector. In January, for example, C4SS material was picked up by daily print publications ranging from the South China Morning Post (Hong Kong’s leading English-language daily) to the Norwalk, Connecticut Hour and the Newberry, South Carolina Observer (small-town American dailies) to the Portland, Oregon Skanner (a black community daily). And, of course, many more.
• Over the past year, we’ve started building up a more robust international operation. I’ve always submitted the Center’s material to English-language publications worldwide, but now we’ve got a growing team of international media coordinators “by language,” translating the Center’s op-eds and submitting them to non-English-language newspapers. You’ll be hearing more about, and from, our international media coordinators as the year heats up.

You can keep track of our “MSM pickups” in the C4SS press room — and you can help make it possible for us to produce even more material and get it published in even more places by supporting the Center.

[Erratum Update: Above, I allude to one of our articles being picked up by the South China Morning Post, Hong Kong’s leading English-language daily, with a circulation of 104,000. The bad news is that while SCMP has run our material before, they didn’t this time. The good news is that the paper that did run David Grobgeld’s piece was Taiwan’s China Post, which has a circulation of about 400,000. The even better news is that we’ve already heard from them that they’re running another piece of ours tomorrow – TLK, 02/06/14]

Transfer of Power

Arguably the most powerful person in the United States (even rivaling the POTUS), Ben S. Bernanke, has left the Federal Reserve. Since 2006 he has sought to make the economy his marionette. Fed policies, under his direction, worked to manage a collapsed housing market, busted mortgage industry and the 2008 global financial crisis – a manufactured crisis of the command and control mentality over the “free” market. Bernanke engineered perhaps the largest redistribution of wealth in American (if not world) history with massive bailouts given to the financial sector – money stolen from the labor of millions and given to the “too big to fail” economic elite. Aside from the initial 700 billion dollar bailout, a Federal Reserve audit revealed the central bank provided a whopping 16 trillion in secret aid to support the corporate state apparatus. Bernanke has released his reign, transferring power to the first woman in United States history to head the Fed: Janet Yellen.

Yellen was confirmed by the United States Senate on January 6, 2014, further committing Washington to even more Keynesian policies from the central bank. As a Fed official, Yellen was a great advocate of keeping interest rates artificially close to zero, increased government spending, and the controversial Quantitive Easing measures sought by the Fed to direct the American economy. Her rise to power will continue to favor the corporate state, even with rumors of economic growth.

There have been numerous libertarian/Libertarian arguments against the central bank. It is not my wish to re-invent the wheel. Most of these arguments, however, stem from the political right – most notably Ron Paul and even greater arguments from his mentor, Murray Rothbard. There is surprisingly little noise from the traditional left – the libertarian or market left – about the central bank, however. Even the famous American leftist and anarcho-syndicalist/libertarian-socialist Noam Chomsky supports central banking. Rather than re-invent the wheel, with this essay I hope to add to the small but sound left-libertarian opposition to the Federal Reserve.

A Brief History of Central Banking in the United States

Alexander Hamilton, the first Secretary of the Treasury, was among the first American politicians to argue for, and help develop, a central bank. Hamilton thought it would be irresponsible to place much democratic or economic control in the hands of the American populace. Hamilton and other federalists believed the country should be ruled by the economic ruling class – the elite, the educated and the privileged. Federalist John Jay put it as bluntly as possible: “Those who own the country ought to govern it.” Hamilton and company favored a strong national government, a broad interpretation of the constitution and put national unity above individualism and states rights. Their economic model, of course, was centrally planned with strict regulation of state economies. From this mindset the first central bank was born in 1791.

Hamilton’s bank, the First Bank of the United States, was kept out of the public arena and operated as a private financial institution. Hamilton’s main argument for the First Bank was that it would help repay the new nations war debt (Morgan 2012). Throughout its existence, however, the bank was met with popular backlash. Objections to the Federal Reserve today echo what was argued against the First Bank: It served moneyed interests (northern corporations), was a threat to property rights and restricted real economic growth (Morgan 2012). Some politicians of the time, notably Thomas Jefferson and James Madison, argued the bank was unconstitutional, that only congress, not a private bank, had the power to tax and print money. In 1811 the Bank was deconstructed as congress voted not to renew its charter (Morgan 2012).

In 1812 the United States found itself in the midst of another war and more national debt.  To deal with a growing financial crisis, Congress voted to charter the (larger) Second Bank of the United States. The Second Bank, at the moment of inception, was poorly managed (Scur 1960). A year and a half after it opened it almost collapsed, and would have, if not for Langdon Cheves. Cheves was the second president of the new central bank and effectively administered its operations. Still, popular sentiment about such a powerful, private institution raised concerns about the Second Banks existence (Scur 1960). This sentiment, and Andrew Jackson’s political clout, would ultimately dissolve this Second Bank in 1836.

The United States was free of central banking until yet another major war erupted. The Civil War, and the need to pay for it, again began the quest for a National Bank. In 1863 the “national banking system” (not a central bank) was developed (MFED 2013). The new banking system, with a national charter, dictated that banks had to issue government-printed bills for their own notes, these notes had to be backed by federal bonds – the war effort was funded (Sylla 1969). In 1865, as the war waged on between the industrialized North and the agricultural South, state bank notes were taxed out of existence – a uniform national currency was established in the United States for the first time (MFED 2013).

With the civil war financed and “won” by the Union, and with a uniform currency, the United States experienced a bank panic in every decade afterward (MFED 2013), ah,”The Gilded Age.” Economic panic began in 1873 due to runs on the free banking system. A “run” occurs when a large number of customers pull their money from banks (MFED 2013). The runs would lead to more and more folks withdrawing their money, causing a system wide economic panic. With the depression of 1893, the Spanish-American War of 1898 and the deep recession of 1907, banking moguls and the United States Government again sought the establishment of a central bank (Sylla 1969), as opposed to letting the market equilibrate.

What followed was a series of Congressional acts that led to the establishment of the Federal Reserve Bank. The Aldrich-Vreeland Act of 1908 established the National Monetary Commission, charged with managing the nations finances, which called for government intervention in the economy, via currency development, during times of financial crisis (MFED 2013). The election of Democrat Woodrow Wilson brought with it the Federal Reserve Act of 1913, and American involvement in World War I. The Federal Reserve System was designed to be a government (not public) institution. The new central banking system was to work closely with the United States Treasury.

What followed the establishment of the Federal Reserve, after WWI, was the roaring twenties, further industrialization, the Great Depression, World War II, The New Deal, the rise of Keynesianism, explicit fiat currency, multiple recessions, the Korean War, the Vietnam War, multiple military interventions overseas, neoliberalism, the rise, fall and decay of the middle class, booms and busts, economic bubbles, artificial scarcity, artificial abundance and much more. In the wake of such history, the Federal Reserve has operated independently of the political process (MFED 2013). The Fed has become an independent centralized bank that is utilized to manage, and some would argue control, the United States economy.

The history of central banking is wrought with military conflict and depressed markets. States have long ignored moral objections to war, but economic restrictions have often halted violence. The printing press, however, allows governments to side step these restrictions. The century of the Fed has been a century of perpetual warfare. As Randolph Bourne wrote, shortly after the creation of the Federal Reserve, “war is the health of the state.” Central banking, Keynesian policies, and states are indeed dependent on jingoism and war. For in war governments flourish – allegiance to state blossoms, class struggle is stilled, spending keeps flowing, and worst of all, human beings, millions of us, die. Liberty is fundamentally opposed to this aggression, as noted here, by Anthony Gregory.

Sadly, as attributed to Nixon: “We are all Keynesians now.”

Liberty and the “Progressive Era”

United States history, like all history, can be defined as a race between social power and state power. It is outside the realm of this essay to describe all of the liberation movements that, in some context, sought the liberty of the true market form. Rather than try I will focus on the Progressive Era, which birthed the Federal Reserve.

The end of the Gilded Age was a period of great turmoil. It was good for business, the political class and those with a monopoly on capital, but the working class, people of color, women, political feminists, labor organizers, etc, realized they could not count on the national government to take their concerns, rights or liberty seriously. The Progressive Era did begin the Age of Reform, but this reform was not enacted to elevate the populace. Instead, reform was used to quiet popular uprisings, democratic social movements, and civil liberties – it was not intended to make fundamental changes to the established order (Zinn 2003).

The era has been termed “Progressive” because of the sheer number of laws that were passed. Upton Sinclair‘s “The Jungle” sparked a labor movement that accomplished passing the Meat Inspection Act, social movements engaged the system to pass the Hepburn Act which supported labor in railroads and pipelines (Zinn 2003), to name just a couple. Particular to the Federal Reserve, Woodrow Wilson’s presidency established the Federal Trade Commission and the Central Bank(s) itself. This was polished as progressive reform to control the growth of monopolies and to regulate the country’s money and banking system. Neither happened, in fact, power and influence of Wall Street only began to grow amidst giant surges of patriotism due to rising conflicts overseas. As noted by Emma Goldman (on patriotism and allegiance to government):

But when the smoke was over, the dead buried, and the cost of the war came back to the people in an increase in the price of commodities and rent-that is, when we sobered up from our patriotic spree-it suddenly dawned on us  … that the lives, blood, and money of the American people were used to protect the interests of the American capitalists.

Due to the work of early American libertarians such as Josiah Warren, Benjamin Tucker, Voltairine de Cleyre, Emma Goldman and others, movements developed that questioned the concentration of power. The labor movement began picking up steam and the marginalized voices in society were becoming amplified. It is true that working people benefited from some of the reforms of the Progressive Era – but the reforms protected the political and economic class from working people, giving just enough to stem off a major rebellion (Zinn 2003). A middle class cushion was manufactured to stem off class conflict as Howard Zinn (2003) explains:

Fundamental conditions did not change, however, for the vast majority of tenant farmers, factory workers, slum dwellers, miners, farm laborers, working men and women, black and white. Robert Wiebe sees in the Progressive movement an attempt by the system to adjust to changing conditions in order to achieve more stability. ‘Through rules with impersonal sanctions, it sought continuity and predictability in a world of endless change. It assigned far greater power to government . .. and it encouraged the centralization of authority.’ Harold Faulkner concluded that this new emphasis on strong government was for the benefit of ‘the most powerful economic groups.’

With the help of the Federal Reserve, Wall Street was able to take firm control of the political system. The market, as it existed, was not able to disperse protests at the grassroots level (Zinn 2003). The economic ruling class championed these reforms, to stabilize the state capitalist system in a time of uncertainty (Zinn 2003). These reforms gave rise to the corporation state that exists today. As noted by individualist anarchist Benjamin Tucker: “Laissez Faire was very good sauce for the goose, labor, but was very poor sauce for the gander, capital.”

Social power is still racing against state power.

The Liberated Market

Enter, Janet Yellen, a grand proponent of quantitative easing in a depressed economy. The Federal Reserve, under her leadership, will continue to serve the politically connected and do very little for the average American. Even Andrew Huszar, an ex-Fed official, in a piece for the Wall Street journal described the programs Yellen champions as the “greatest backdoor Wall Street bailout of all time.”

For all the discussion in the United States today about the proper function and role of our federal government, how to manage the economy, how to battle poverty, how to create jobs and so on and so on, what seems to be missing from national discussion is the true beauty of markets. A banking system, or piece of economic legislation, cannot fix the economy.

Economic systems are developed by the spontaneous order of society. The market is a product of inclined labor, derived from the dreams, aspirations, desires, passions and activities of free people. The market encompasses our places of exchange, but also the rest of human labor – social movements, federations, institutions, decision-making and all of human activity. This behavior cannot be managed from a centralized authority. The work of human beings, our inclined, creative labor, cannot be directed – it can only be realized in liberty.  The liberated market mechanism is the only cure for our past, current and future ills.

Today, in the era of too big to fail, it is corporate monopolies and financial institutions that benefit from the public. As George W. Bush said: “I have abandoned free market principles to save the free market.” What he meant was: “I have again exploited the middle and working classes to serve our economic ruling class.” While Bernanke, with the power of the Federal Reserve, was redistributing wealth to the upper tiers of society, organized people, from a diverse history of social movements, began developing the tools for market liberation.

The true market form, how people engage their labor, exists outside of the state.  The market left speaks of exchange and labor in human terms. The liberated market allows for economic, social and environmental justice. Liberation champions a society that allows the free flow of information, science and progress, democratic values, and the fruits of  labor so these principles can spread without restriction. The liberated market allows us to determine how great we can be. The liberated, free(d) market allows plans by the many, not by the few – it renders Yellen, Bernanke and all bureaucrats of the political class obsolete.

With booms and big busts, giant bubbles, manipulation of the market, a giant national debt and a decaying dollar accompanying promises in future spending, a full economic collapse of the United States government is a very real possibility (see Thomas L. Knapp: Government Spending: Two Steps Sideways, One Half-Step Back). This is scary, we all live here, we all have families here, we all have bills to pay and mouths to feed. Our way of life, however, is not at the mercy of the Federal Reserve or a conglomerate of folks in Washington. Though this realization is indeed scary, it should also be exciting. The market will finally have a chance to equilibrate. As witnessed in Detroit, free people can accomplish much with very little – and free people are already working on the solutions.

If we are to be serious about living in a peaceful and prosperous society, then we must also be serious about competing forms of currency, competing markets and the abandonment of the command and control mentality. Perhaps the Keynesians are right and government spending is the only way to prevent the collapse of state capitalism. What’s ignored by fans of the printing press is that state capitalism is unsustainable. If we all march off to battle there will be full employment, but nothing to eat. The only way out is the liberated market. In the words of Kevin Carson: “In the end we’ve got to find some way off the hamster wheel.”

Instead, may we work together and exchange services to co-ordinate and cultivate markets. The emergence of peer to peer currency, like Bitcoin, and the rise of voluntary exchange are sources of hope. The more we work around traditional power structures, the more we advance social power in our all too important race against the corporate state.

The creative labor of human beings will build markets, mutual aid, relief, decent societies and finally peace.  We can and will build a real and lasting peace that will make life on Earth worth living — a peace for every child of humanity. Free human beings will no longer die for governments and/or capital. The greatest moment in human civilization is within our grasp. It is time we reach out and attain liberty.

As Yellen continues, perhaps even enhances, the disastrous policies of the Fed, may we find solace and peace in the liberated market. May we soon, in liberty, say triumphantly: “We are all Agorists now.”

References:

Chandavarkar, Anand G. Keynes and Central Banking. Indian Economic Review / Volume XX, No.2

Federal Reserve Bank of Minneapolis. (2013) A History of Central Banking in the United States.  http://www.minneapolisfed.org/community_education/student/centralbankhistory/bank.cfm

Morgan, H. Wayne. (1956) The Origins and Establishment of the First Bank of the United States. Business History Review / Volume 30 / Issue 04 / December 1956, pp 472-492

Scur, Leon M. (1960) The Second Bank of the United States and Inflation After the War of 1812. Journal of Political Economy/Volume 68, No. 2

Sylla, Richard (1969). Federal Policy, Banking Market Structure and Capital Mobilization in the United States, 1863 – 1913. The Journal of Economic History/Volume 29, No. 4

Zinn, Howard (2003). A People’s History of the United States: The Socialist Challenge. Harper Perennial.

AGORIST CLASS THEORY [PDF]: A Left Libertarian Approach to Class Conflict Analysis By Wally Conger

Foreword
Introduction
The Failure of Marxism
The Marxist Appeal
Precursors to Marxist Class Theory
Marxist Classes
The Agorist Critique of Marxist Class Theory
Libertarian Class Analysis
Radical Libertarian Class Analysis
Agorist Class Theory
Agorist Solutions for Marxist Problems
Appendix: Cui Bono? Introduction to Libertarian Class Theory (1973)

Marxist Problem: The revolutionary class appears to work against its own interest; the proletariat support reactionary politicians.

Agorist Solution: The Counter-Economic class cannot work against its interests as long as it is acting counter-economically. Those supporting statists politically have internal psychological problems without doubt, but as a class, these acts dampen the weakening of the State marginally. (Someone who earns $60,000 tax-free and contributes up to $3000 politically is a net revolutionary by several thousand dollars, several hundred percent!)
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Marxist Problem: “Revolutionary” States keep “selling out” to reaction.

Agorist Solution: There are no such states. Resistance to all states at all times is supported.

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Marxist Problem: Revolutionary parties often betray the victimized class before taking power.

Agorist Solution: There are no such parties; resistance to all parties at all times is supported.
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Marxist Problem: Little objective relief can be accomplished by reformist action. (Agorists agree!) Therefore, one must await the revolution to destroy the system. Until then, revolutionary activities are premature and “adventurist.” Still, the productive class remains victimized until the class reaches consciousness as a whole.

Agorist Solution: Each individual may liberate himself immediately. Incentives for supporting collective action are built in and grow as the self-conscious counter-economy (agora) grows.
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Marxist Problem: The class line blurs with time — against prediction.

Agorist Solution: Class lines sharpen with time — as predicted.