Capitalism versus Capitalism

While reading the symposium on Kevin Carson's book, Studies in Mutualist Political Economy, in the latest Journal of Libertarian Studies, I was struck by how upset people can get when someone uses a term differently from how they use it -- even if he makes his usage perfectly clear and explicitly draws on legitimate historical precedent. This comes up on at least two occasions in the commentary on Carson. I've read Carson's book, and I had no trouble seeing how he uses the word "capitalism." Much of the book is devoted to showing that historical capitalism -- the real-life mercantilist political-economic system that most people attach that word to -- bears only superficial resemblance to the laissez-faire free market, which he favors. Indeed anyone who does not quickly see this in Carson's work is not paying attention. It is not some obscure point buried under other material. It is the point! Moreover, Carson shows the historical precedent -- in the work of Thomas Hodgskin and Benjamin Tucker, for example -- for such usage. It shouldn't be hard to grasp.

Yet two critics can't or won't see it. Drs. Walter Block and George Reisman go for Carson's jugular in retaliation for his alleged confusion of laissez faire with (state) capitalism. Carson handily disposes of the criticism and needs no help from me, but I can't restrain myself from jumping into the fray.

Let's start with Professor Block. Missing Carson's point, Block lectures the author on the difference between corporate state monopoly capitalism, or economic fascism, and laissez-faire capitalism. "The point is, these two systems are as different as night and day. They have nothing in common except for this highly unfortunate terminology that labels both 'capitalism.' . . . As might be expected by now, this author does all he possibly can to bring about confusion in this regard." This is astounding in its sheer obliviousness to what Carson has written. In fact, Carson could have written this about Block.

Block continues, "He [Carson] thinks that there can be such as thing as 'free market socialism,' not realizing this is a contradiction in terms, if the latter is used, as per usual, as employed by this author, to strip capitalists, entrepreneurs, landowners, etc., of their due." But it's not a contradiction in terms to anyone who carefully reads Carson's book. Carson is making the point that the historical system called capitalism consists in state intervention on behalf of owners of capital, a system that exploits workers-consumers. That is also how nineteenth-century free-market individualist anarchists used the term. "Socialism" for these folks meant the alternative to a system that exploits workers, thus a system of pure laissez faire, or "consistent Manchesterism." (Carson notes that Benjamin Tucker proudly embraced that description.) In light of historical definitions and real-world systems, there is nothing incoherent about free-market socialism or free-market anti-capitalism (as long as one defines one's terms). Indeed, in historical terms, free-market, or laissez-faire, capitalism makes as much sense as free-market Bolshevism.

The missing of the obvious continues. Carson is concerned with history as well as political economy. He judges the industrial revolution and such things in terms of what actually happened, not rationalistically or in an a prior manner. Block has problems with this. He points out that Carson takes issue with Ludwig von Mises's favorable view of the industrial revolution and the factory owners. Writes Block, Carson "does so on grounds that these employers were guilty of various and sundry crimes. Maybe they were. But this is all beside the point."

Beside what point? Block asserts that Carson condemns industrialization per se. But he does not. He condemns it as it actually developed, which is to say largely on the backs of people dispossessed of their historical property rights. (See my earlier post on this subject.) Considering how sensitive Murray Rothbard was to feudalistic land theft and land monopoly, and the case for land reform, Block's criticism is odd, considering he's a promoter of Rothbard's "plumb line."

Strangely, Block writes this: "Of course there has been land theft, as Carson charges. But it should not be necessary to remind this author that this is part and parcel of state monopoly corporate capitalism, not the laissez-faire variety." Who said it was part of the laissez-faire variety? Block's bulletin will hardly be news to Carson. It almost sounds as though Block is arguing Carson's case for him.

It gets funnier. Block chides Carson for putting the development of the "world market" into historical context. Carson writes, "The modern 'world market' was not created by free market forces . . . . [I]t was an artificial creation of the state, imposed by a revolution from above." This is hardly controversial for a libertarian.

Block replies, ". . . [B]ut so what?[!] Yes, there was an admixture of the two types of capitalism in the development of world trade. Does this mean we toss it [the world market] out. . . ?" No, and Carson doesn't say we should. For him it means we should end (state) capitalism and embrace laissez faire. Anyone got a problem with that?

Again, Block goes after Carson for condemning actual historical monopoly for its abuse of workers and consumers. "This," writes Block, "is quite reasonable in the monopoly that emanates in state monopoly corporate capitalism; here, some firms are forbidden entry, and the privileged others can certainly exploit consumers. But how in bloody blue blazes can this take place under laissez-faire capitalism . . . ?" (Emphasis added.)

Words fail me at this point.

Finally, he savages Carson for criticizing corporate bigness, pointing out that only the free market can determine when big is too big. Fine -- except that's Carson's point! What he objects to is the mercantilist corporate state, which destroys the free market's mechanism for keeping firms from growing beyond what is economically justified.

To Carson's well-documented Nockian contention that deep and pervasive pro-business intervention stretches back more than 200 years and has serious anti-competitive consequences in the present, Block responds, "Nor is it easy to see how the government currently props them [corporations] up." It's not easy if you don't look, or read. But that is not the Rothbardian plumb line as I understand it.

Block makes the same faulty point over and over. He takes issue with no factual statements. Instead he asks why Carson is so critical of world trade, sweatshops, the employer-employee relationship, the industrial revolution. Sure, he says, each of these things was nurtured in an environment, not of freedom, but of monopolistic state coercion, sure each exploited workers and consumers on behalf of business -- but none of them had to develop that way. No, none had to. But each did. Block is caught in a hopelessly rationalistic loop. As Carson points out, Block, like other libertarians, can't make up his mind if he is defending the concept of the free market or what exists now. You can't do both.

Read Block's review and Carson's rejoinder. They're great fun. Before closing, I must quote one line from Carson because it sums things up perfectly:

[U]nlike Block, I think a description of the functioning of a free market calls for the subjunctive case, not the indicative.

Who said Carson isn't a subjunctivist?

I've gone on too long. I'll take up Dr. Reisman's critique in the next day or so.