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What Social Animals Owe to Each Other

Friday, January 15, 2010

Libertarians Against Capitalism

I've started a group by that name on Facebook. Thomas Hodgskin, mentor to Herbert Spencer, is the inspiration. Here's the official description:
We are a group of libertarians who understand that historically the word "capitalism" has meant, not the free market, but crony capitalism -- that is, collusion between business and State at the expense of consumers/workers. Thus we refuse to use the word "capitalism" to describe what we favor: individual liberty in all respects and free, competitive markets. We believe that what we have today IS capitalism -- and we oppose it.
I like what Brad Spangler said in a comment:
Which is more direct, a two-step process or a one-step process?

A: 1) Convince people the status quo is not capitalism & 2) Convince people that "capitalism" in the sense of a freed market is the remedy to the status quo?


B: 1) Convince people that a freed market is the remedy to the capitalist status quo?
No, that's not Thomas Hodgskin up there. Apparently there are no pictures of him. Instead, I've used Benjamin Tucker, who's a darned good stand-in.


Darian said...

I think it makes sense that "capital-ism" would be a system that works for capital, thus government intervention on behalf of capital.

What do you think of capitalism signifying hierarchy within the workplace or a separation of labor and ownership/management? Certainly this arrangement would be related to state intervention on behalf of the privileged. But I think any economy in which workplace hierarchy was the most prevalent arrangement would be problematic from the standpoint of maximizing individual autonomy. However, actual free competition that included a large sector of cooperatives and self-employment would make the small amount of remaining workplace hierarchy less restrictive of freedom.

Brad Spangler said...

re: "What do you think of capitalism signifying hierarchy within the workplace or a separation of labor and ownership/management?"

It's rather easy to incorporate and address such views with the short talking point that capitalism is best understood as monopolization of capital.

And any good Austrian can explain why successful long-term monopolization of anything must derive from state intervention in the market.

Anonymous said...

But isn't "B" also a two-step process, since at some point you will have to convince people that the "capitalist status quo" and a freed market are two different things? Or is everybody going to read the description on the Facebook page and immediately internalize it?

Brad Spangler said...

@Shake Mouth -- That's a fair point. My response is that the reality of state intervention in the market is more obvious than what the "proper" definition of capitalism ought to be.

Lisa said...

I highly recommend the book "Capitalism Unbound" by Andrew Bernstein. He explains beautifully what capitalism means and it has nothing to do with what you call crony capitalism. Words do matter.

Sheldon Richman said...

What does "mean" mean in this context? A word doesn't "really mean" something in the sense that it has that meaning apart from how people use it. From the beginning of what we call capitalism, there were rulers and rent-seekers. Why isn't that part of the meaning? There's a bad theory of definition underlying the "pro-capitalist" case.

rwn said...

"..."capitalism" has meant, not the free market, but crony capitalism -- that is, collusion between business and State at the expense of consumers/workers. "

What you are describing is *fascism*, not captialism! Capitalism *IS* a free market - free from government interference under an objective rule of law.

Capitalism is what we need to *return* to, what we have now is a degree of fascism, getting steadily worse under current western governments.

Brad Spangler said...

@Lisa -- You seem to think we're ignorant of that definition. We're not. I advocated it for the better part of two decades. I've changed my mind about which labels are best without changing my overall political ideals.

In point of fact, the attempt at equivalency of "free market" and "capitalism" goes back to the (classical, limited government) liberal Mises and the term "capitalism" pre-dated his partly successful attempt to change the definition in the public consciousness. If Mises can try to change it to suit his conception of better political strategy, so can we.

That definition is suitable for a defensive political strategy comprised of libertarian reformist attempts to hold government within limits.

That strategy failed. Sentimental attachment to it is dysfunctional and self-defeating attachment to liberty losing.

It's now time to go on the offensive, advocating revolutionary free market anarchism and emphasizing our departure from advocacy of anything even remotely approaching the abominable status quo.

Darian said...

I sounds like this might turn into a debate between the subjective theory of definition and intrinsic meaning. Snark!

Seriously though, I don't see the value of expending effort on proving what capitalism "really is" when the word is associated with so many things, most of which are bad. Of course, the same could be said of many words, but there are etymologically better words to use than capitalism.

bile said...

This argument is ancient and mainly a semantics issue. Socialism, capitalism, etc. have different definitions from different time periods and contexts. The economic definition, political, layman. From this POV or that.

I don't see what these arguments get us. If you want to educate others in the multiple meanings and uses of words throughout history and field feel free but this constant semantics arguments between educated individuals who know better seems entirely wasteful. We are far more in agreement than not (perhaps even between social anachrists and propertarians) then with statists. Most disagreements are in preference, prediction, or understanding rather than desire to mandate X or Y. Why don't we act like it?

And Darian... what's the issue with hierarchy in and of itself? Is there not a role in a free market to organize labor and facilitate communications between different groups? As a software developer I developer hierarchical systems all the time and it's due to the functional necessity and efficiency it provides over other paradigms. Too much hierarchy is unstable and too little is inefficient. My job is no different. If the groups i work in and with were flatter i'd have more responsibility dealing with clients meaning less time to develop. If it were larger nothing would ever get finished. Large, bureaucratic hierarchy is a symptom of statism (which leads to monopolies/oligopolies on capital as Brad mentioned). Whether state capitalism or state communism. It's a symptom that will go away as statism recedes and competition resurfaces. The free market can figure that out we don't need to focus on it specifically like we do with breaking down coercive authority.

Darian said...

Bile, I don't think hierarchy is wrong in the sense that coercion is wrong. And I don't think it could, or should be entirely abolished (whatever that might mean in practice). But a broad paradigm of hierarchical social organization will tend to restrict the liberty of those at the bottom. A person taking the lead on certain projects, or a person having the option to work in a hierarchical setting (optional in the sense that there are other feasible options besides dependence or poverty) is different from a pervasive system in which ranking of individuals is a prime component of social organization.

It is a more complex issue than either calls to "abolish hierarchy" or defense of hierarchy in general would allow, but generally I see the minimization of hierarchy as a favorable goal because it gives individuals more freedom of action.

You asked,
"Is there not a role in a free market to organize labor and facilitate communications between different groups?"

I expect there would be, but a division of labor does not need to be divided into superior and inferior as much as it is today. Saying that I'm against "a separation of labor and ownership/management" is probably not a good way to say it. Basically I'd like workers to have more of a control of the workplace, which does not mean that the role of managing personnel must be abolished.

I agree that authoritarianism, not specifically hierarchy, is the problem, but hierarchy as a favored mode of organization can reinforce or promote authoritarianism.

Roderick T. Long said...

Great group! But who is that a picture of? I'm pretty sure there are no surviving depictions of "our" Thomas Hodgskin, so it's probably some other Hodgskin, I fear.

Sheldon Richman said...

Oops! Quite right, Roderick. My bad.

clay barham said...

Law, in America, has always been based on several critical concepts, one of which is that people of like situation are treated like others of like situation. If you plunder one person for the benefit of another person, neither of which differ, laws are are violated. If you take from one bank, a punitive tax, and give it to another bank, the law is violated. The Federal Government today, under the direction of organized criminals who break the law and plunder Americans without remorse, is becoming, itself, a center of criminal activity. However, just as with Robin Hood, the few who benefit from theft of their fellows wealth will justify criminal politicians, as did many in Louisiana under Huey Long. Claysamerica.com

Sheldon Richman said...

Damn! I liked that picture. I believe that was Thomas Hodgkin, the physician.

Matthew said...

I'll second Lisa's recommendation to read anything and everything Andrew Bernstein writes.

Sheldon, crony capitalism isn't capitalism, crony capitalism is an invalid concept. The word you're looking for is statism or one of its various manifestations, although I'm sure this isn't lost on you.

In my judgment, educating people as to what type of economic system the United States is actually currently employing, statism, would be a much better way to advocate for capitalism than would denouncing capitalism, the system that protects individual rights.

Languages should evolve when it is, in fact, proper to do so, but I don't think popular, incorrect usage of a given term qualifies. Wouldn't you agree?

Sheldon Richman said...

Matthew writes: "Languages should evolve when it is, in fact, proper to do so, but I don't think popular, incorrect usage of a given term qualifies."

Who says when it's proper? Do you wish to set up an English Academy that will police the language? Maybe if the language evolves spontaneously it is proper for it to do so. I thought we were pretty much Mengerian/Hayekians when it comes to understanding institutions such as language.

Sheldon Richman said...

Another thing: our main task should be to teach the virtues of freedom and free markets. I simply do not want to waste time debating whether what we have to day is capitalism or crony capitalism. I believe that most bystanders will not be impressed with such a debate. It's a distraction. And historically, what you would point to as capitalism was riddled with rent-seekers and obliging rulers.

Matthew said...

Let's try to stick to one limited dialogue at a time. I'll take up the language one because I think it's interesting and I may learn something new. Admittedly, it's not a subject I have not spent much time thinking about.

There must be an agreed upon language for two individuals to properly and effectively communicate with one another. We can probably agree on that.

Now, people have begun using the term capitalism as the economic system that has ruled the United States since its inception. They point to rent-seekers and rulers as inherent in capitalism. At this point they have a definition of capitalism in there head. They'll say something like, "Capitalism is responsible for today's mess".

I think it's important to ask them to define capitalism at this point. However, it seems as if you will accept their definition of capitalism and proceed to contrast it with your definition of a system that protects individual rights. Is that your position? If it is your position, I think the following mistakes will occur:

1. You're dismissing the de facto "Academy" of English, the Oxford English Dictionary or any other popular dictionary as a reference for a common framework. In effect, you are permitting arbitrary definitions instead of relying upon the immensely helpful dictionary that would have otherwise tied each of you down to mutually agreed upon terms.

2. You will need to come up with an alternative term for capitalism, which will require a whole time defining just like capitalism would.

Thoughts, Sheldon?

(Oh, briefly, please don't presume I point and call things something like you did at the end of your last post. Besides being grossly mistaken, you come off looking a pompous know-it-all. You seem honest and benevolent in spite of that remark, though, so consider this a helpful FYI. Incidentally, rent-seeking doesn't violate individual rights, it's obtaining that rent through force or law that violates them.)

Sheldon Richman said...

I hope we all learn something new from this discussion, me especially (egoist that I am).

Matthew, you seem a bit oversensitive. I'll leave it to others to determine if I was being a pompous know-it-all. The whole tenor the debate has been that capitalism "means" free markets and therefore we may distinguish capitalism from crony capitalism. I was simply challenging the implication that there was historical capitalism in the free-market sense. If you personally do not presume that, great! No need to get your knickers twisted or call names.

"Incidentally, rent-seeking doesn't violate individual rights, it's obtaining that rent through force or law that violates them."

This is ominous hair-splitting. The rent-seeker is an active part of a system that has rights-violations at its foundation. I suppose the bag man in a bank robbery isn't violating anyone's rights either. He's just standing there with an open bag when the money is dropped. (HT: Brad Spanger)

As to the substance of Matthew's remarks: First, dictionaries at least the time of Samuel Johnson have been descriptive, not prescriptive, and are updated to reflect changing use. This is consistent with the Mengerian tradition I refer to above.

We have at least one alternative label: the free(d) market. It is clear and descriptive in a way that "capitalism" can't possibly approach.

Brad Spangler said...

re: "Incidentally, rent-seeking doesn't violate individual rights, it's obtaining that rent through force or law that violates them.)"

The existence of the state as a means of involuntary transfer of wealth results in its direction by those who gain most from those activities. Operatively, then, both the literal government and the nominally "private" elite together can (and ought to) be described as one single criminal enterprise. That elite can be described as "capitalists" because they have acquired economic influence in excess of any derived from their own productivity by means of having license to hold stolen loot. They are state-allied monopolists of capital itself (rather than the simpler concept of monopolists of a particular industry or market segment).

Todd Andrew Barnett said...

The argument over this matter is whether we have a free market or a free market. If it's a free market, then it's a voluntary, truly private market where goods and services are sold to customers at the lowest price available. That also means it's a market in which a profit-and-loss system determines whether the enterprise is innovating its ideas, pleasing its consumer base, and compensating its employee base rather well to the point where their standard of living is better than it would be if they weren't employed. It also would give employees an incentive to engage in self-employment by launching their own businesses after having accumulated enough managerial, entrepreneurial, and labor experiences on the job. After all, if the profit-and-loss system determines that an enterprise's business model isn't working and it's failing to producing products and services that customers want, then it will fade into obscurity and become defunct. That results in its assets being acquired by another firm that can manage them better, but this is, in terms of theory, predicated on the idea that the state is non-existent.

If it's the latter, then it's a state-socialized entity that employs a profit test and the losses are socialized at taxpayers' expense. Employees can expect to find this as an indicator of capitalism at its worst. Taxpayers who are expected to bear the burden of the tax costs because of many Fortune 100 and 500 firms that have enjoyed a labyrinth of regulatory and tax incentives to keep these failed business models in full swing are the victims in all this.

The question before all Americans is: do you want a free market or a free market?

(BTW, it doesn't help that many libertarians in the movement -- Ron Paulers included -- conflate the term "free market" with other Republicanesque terms like "deregulation," "capitalism," "corporations," and "privatization. I suspect they do so because mistakenly believe that there is a hairsplitting difference between this mythical "laissez-faire capitalism" and "state capitalism," and that helps us being tagged as an aberrational form of conservatism.

But then I digress......

Gallego said...

Why do you want to bring back only the original meaning of the word capitalism? There are so many words, that lost their meaning thru time. Like... liberalism! Why don't you bring back the original meaning of that as well? Wouldn't that be nice? Wouldn't it be awesome if you could call your group "Liberals against capitalism"? Or does it sound too familiar? Well, maybe that's because using words in meanings they already lost is bullshit; and certainly a counter-productive one in this case...

Brad Spangler said...

re: "maybe that's because using words in meanings they already lost is bullshit;"

So, statists get to change the meanings of words, but libertarians aren't allowed to?

I mean, you just acknowledged the meaning changed. Do you imagine that was entirely unintentional? Or might the constant efforts of propagandists and agitators have played a role in that?

Do you believe such changes were good for liberty or bad for liberty?

If they were bad for liberty and intentional, it's not clear why libertarians shouldn't attempt to intentionally reverse those changes.

Please explain how you imagine we can stop losing by renewing our commitment to allowing our opponents to win.

Gallego said...

Statists can change meanings of words, but we can't... boo-hoo!

Okay, we've lost a word, that's a pity. But let's get over it and move on; instead of a futile and counter-productive fight for our business card buzzwords, let's focus on the real thing, shall we? If rose would smell as sweet by any other name, free market would as well. I know it's some excess work to always explain what you mean by given words, but that's the way how not to lose the words! Instead of using just buzzwords and catchy phrases, let's use their definitions, their meanings, their explanations...

What I don't get is this: why capitalism? Why the word that some jackass came up with years ago, not clever enough to use word "mercantilism" instead? Why giving him the credit? Let's forget about him and use it in the meaning that is accepted by the rest of society. That's the purpose of words - to communicate within a society. If you use it in an entirely different meaning, will they listen to you? Or will they think "yet another moron..."?

And this case is very counter-productive. For fock's sake, you came with this silly thing one day after John Stossel was trying to clear the meaning of capitalism on TV! So Stossel is supporting capitalism, you are against, yet you both have the same opinion - how the hell is this supposed to help us?!

Brad Spangler said...

My questions (and their implications), above, remain unaddressed.

Other readers may also enjoy gary Chartier's treatment of this topic...

Advocates of Freed Markets Should Embrace “Anti-Capitalism”

Gallego said...

"My questions (and their implications), above, remain unaddressed."

Boo-hoo... like you've answered my original question... libertarians against capitalism can ignore others question, but pro-capitalist ones can't?

btw. I haven't answered, because I don't find them relevant (I hoped my actual answer made that clear; well, obviously not for everybody). It is not important, who changed meanings of words and why, you won't do anything about that by pointing your fingers and shouting "hey, they did it!" It is not important, they've changed, move on. Make sure you don't lose words in future by - like I've already explained - not rely on buzzwords, but always go for the explanation...

anyway, why do you insist on blaming statists for changing word meanings? thousands of pro-market gyus are using the word capitalism every single day happily and proudly against statists - couldn't it be "us" who changed the meaning? again, answer to that is absolutely irrelevant.

almost everybody uses the word capitalism in the free-market meaning today, and have used so for many decades! why do you insist on reversing those decades and bring back some absolutely pointless 19th century meaning??

btw. what would happen, if you eventually succeeded and capitalism meant what you claim it should? would anything change? would the shift of libertarian rhetorics from "we've got too little capitalism" to "we've got too much capitalism" make the world a better place?

Bob Kaercher said...

I'm sort of of two minds on this whole semantic debate.

On the one hand, I see Sheldon's and Brad's points. When John McCain can point an accusing finger at Barack Obama and scream "SOCIALIST!" without so much as a twitch of irony, or when conservatives preach that Obama's socialism is the end of civilization as we know it without betraying a hint of understanding that America has already had a long and winding history of socialism from virtually the very beginning, you know that the statists have pretty successfully muddied the terminological waters with their peculiar definitions of "capitalism" and "socialism."

On the other hand, however, I don't know what's really gained by trying to popularize some alternative notions of those terms. It almost seems like there's a movement afoot to merely switch the definitions, and I don't fully understand what's to be gained from that.

So for my own part, while I won't be joining any bandwagons to redefine either of those terms, I question non-free market non-libertarians on their usage of them when it's appropriate so we can have a coherent dialogue. Barring those opportunities, I use "free markets" and "central planning" (or even better, "government planning"), which seem to me to cut much closer to the conceptual bone and prevents having to jump through all these semantic hoops just to come to an agreement on terms.

There's my two pennies.

Sheldon Richman said...

I don't think we've lost "capitalism." We never really had it. Rand and Mises tried to rehabilitate it, but I believe they failed. So I do not lament losing it.

Matt said...

I think I can contribute to the argument. Group A claims we never had true capitalism. If you ask the average person they will definitely say we have had capitalism. Group B claims we never had a free market, most intelligent people would agree, plus all you have to do to convince that is point out a piece the government intervention in the market. Either way we have to convince "X" is the solution, so why not just accept we have had capitalism, instead of explaining to everybody else that we have never had it. Ask any republican if they are capitalist they will say yes, and almost all democrats will say yes as well. Are you going to convince 99% of people they have the wrong definition?
Yes it's all semantics, but we are dealing with people indoctrinated by the state, for which buzz words can be deadly.

Matt Powell said...

Well, it's good (though not surprising) to see libertarians acknowledge this distinction. But what steps are you prepared to take to insure that 'real' free market capitalism does not become crony capitalism? How about publicly funded campaigns and strict limitations on political speech by LLCs?

David Rojas Elbirt said...

Economic incentives are founded on a core idea: accumulation of capital. And you are all bumping into the same wall, thinking inside the box variations of the same formula that include capital, power, markets, prices, etc. An excentric form of anthropocentrism.
The real turn, the next BIG thing after capitalism, will involve economics linked to maximazing Nature. That is, economic or monetary incentives focused on learning how to make simbiosis between Mankind and local and global ecologies.