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Director’s Report: October 2014

October marks another productive month for C4SS. Maybe not as productive in quantity, but certainly in quality. C4SS is a media center and think tank: we focus on crafting editorials for mass media reproduction (over 2000 reprints, and counting, documented) and academic level studies. Each month we invest more and more into book reviews and studies….

Continue reading at Center for a Stateless Society …

The State is No Friend of the Worker

The election season is upon us, and we’re hearing the usual political promises about raising wages. Democrats pledge to raise the minimum wage and assure equal pay for equal work for men and women. Republicans usually oppose those things, but their explanations are typically lame. (“The burden on small business would be increased too much.”) Some Republicans endorse raising the minimum wage because they think opposition will cost them elections. There’s a principled stand.

In addressing this issue, we who believe in freeing the market from privilege as well as from regulation and taxes should be careful not to imply that we have free markets today. When we declare our opposition to minimum-wage or equal-pay-for-equal-work legislation, we must at the same time emphasize that the reigning corporate state compromises the market process in fundamental ways, usually to the detriment of workers. Therefore, not only should no new interference with the market be approved, but all existing interference should be repealed forthwith. If you omit that second part, you’ll sound like an apologist for the corporatist status quo. Why would you want to do that?

The fact is that no politician, bureaucrat, economist, or pundit can say what anyone’s labor is worth. That can only be fairly determined through the unadulterated competitive market process. Perhaps ironically (considering libertarians’ individualism), it’s a determination we make collectively and continuously as we enter the market and demonstrate our preferences for various kinds of services through our buying and abstaining.

If the market is free of competition-inhibiting government privileges and restrictions, we may assume that wages will roughly approximate worth according to the market participants’ subjective valuations. This process isn’t perfect; for one thing, preferences change and wage and price adjustments take time. Moreover, racial, ethnic, and sexual prejudice could result, for a time, in wage discrimination. (See Roderick Long’s excellent discussion of the wage gap, “Platonic Productivity.”)

The surest way to eliminate wage discrimination is to keep government from impeding the competitive process with such devices as occupational licensing, permits, minimum product standards, so-called intellectual property, zoning, and other land-use restrictions. All government barriers to self-employment — and these can take implicit forms, such as patents and raising the cost of living through inflation, or burdening entrepreneurs with protectionist regulation — make workers vulnerable to exploitation. Being able to tell a boss, “Take this job and shove it,” because alternatives, including self-employment, are available, is an effective way to establish the true market value of one’s labor in the marketplace. With the collapsing price of what Kevin Carson calls the “technologies of abundance” (think of information technology and digital machine tools), sophisticated small-scale enterprise — and the independence it represents — is more feasible than ever.

One thinker who understood how the worth of labor is determined in the market was the radical libertarian English writer Thomas Hodgskin (1787–1869). Hodgskin is often misunderstood. Wikipedia calls him a “socialist writer on political economy, critic of capitalism and defender of free trade and early trade unions.” To the modern ear that will sound odd: a socialist critic of capitalism who defended free trade and unions.

Hodgskin is usually labeled a Ricardian socialist, but Hodgskin criticized David Ricardo while lauding Adam Smith. Moreover, socialism didn’t always mean what it means today. In earlier times, socialist was an umbrella term identifying those who thought workers were denied their full just reward under the prevailing political economy. The remedy for this injustice varied with particular socialists. Some advocated state control of the means of production; others wanted collective control without the state; and still others — Benjamin R. Tucker most prominently — favored private ownership and free competition under laissez-faire.

What these self-styled socialists had in common was their conviction that capitalism, which was understood as a political economy of privilege for employers, cheated workers of their proper reward. By this definition, even an adherent of subjectivist and marginalist Austrian economics could have qualified as a socialist. (See my article “Austrian Exploitation Theory.”)

By the way, Hodgskin used the word capitalist disparagingly before Karl Marx ever wrote about capitalism. As George H. Smith notes, Marx called the laissez-faireist Hodgskin “one of the most important modern English economists.” It was not the first time the author of Capital complimented radical pro-market liberals. He credited class theory to French liberal historians. (Marx then proceeded to mangle their libertarian theory.)

As a libertarian champion of labor against state-privileged capital, Hodgskin had much to say about how just wages should be determined. In his 1825 book, Labor Defended Against the Claims of Capital, he first noted that many goods are the product of joint efforts, which would seem to make it difficult to reward individual workers properly. He wrote,

Though the defective nature of the claims of capital may now be satisfactorily proved, the question as to the wages of labour is by no means decided. Political economists, indeed, who have insisted very strongly on the necessity of giving security to property, and have ably demonstrated how much that security promotes general happiness, will not hesitate to agree with me when I say that whatever labour produces ought to belong to it. They have always embraced the maxim of permitting those to “reap who sow,” and they have maintained that the labour of a man’s body and the work of his hands are to be considered as exclusively his own. I take it for granted, therefore, that they will henceforth maintain that the whole produce of labour ought to belong to the labourer. But though this, as a general proposition, is quite evident, and quite true, there is a difficulty, in its practical application, which no individual can surmount. There is no principle or rule, as far as I know, for dividing the produce of joint labour among the different individuals who concur in production, but the judgment of the individuals themselves; that judgment depending on the value men may set on different species of labour can never be known, nor can any rule be given for its application by any single person. As well might a man say what others shall hate or what they shall like.

Whatever division of labour exists, and the further it is carried the more evident does this truth become, scarcely any individual completes of himself any species of produce. Almost any product of art and skill is the result of joint and combined labour. So dependent is man on man, and so much does this dependence increase as society advances, that hardly any labour of any single individual, however much it may contribute to the whole produce of society, is of the least value but as forming a part of the great social task. In the manufacture of a piece of cloth, the spinner, the weaver, the bleacher and the dyer are all different persons. All of them except the first is dependent for his supply of materials on him, and of what use would his thread be unless the others took it from him, and each performed that part of the task which is necessary to complete the cloth? Wherever the spinner purchases the cotton or wool, the price which he can obtain for his thread, over and above what he paid for the raw material, is the reward of his labour. But it is quite plain that the sum the weaver will be disposed to give for the thread will depend on his view of its utility. Wherever the division of labour is introduced, therefore, the judgment of other men intervenes before the labourer can realise his earnings, and there is no longer any thing which we can call the natural reward of individual labour. Each labourer produces only some part of a whole, and each part having no value or utility of itself, there is nothing on which the labourer can seize, and say: “This is my product, this will I keep to myself.” Between the commencement of any joint operation, such as that of making cloth, and the division of its product among the different persons whose combined exertions have produced it, the judgment of men must intervene several times, and the question is, how much of this joint product should go to each of the individuals whose united labourers produce it?

Observe Hodgskin’s Austrian-style subjectivism: How much someone is willing to pay for a product “will depend on his view of its utility.” (The way this fits with his labor theory of value is an interesting matter that we cannot take up today.)

How then does he propose that the wage problem be solved? Here’s how:

I know no way of deciding this but by leaving it to be settled by the unfettered judgments of the labourers themselves. If all kinds of labour were perfectly free, if no unfounded prejudice invested some parts, and perhaps the least useful, of the social task with great honour, while other parts are very improperly branded with disgrace, there would be no difficulty on this point, and the wages of individual labour would be justly settled by what Dr Smith calls the “higgling of the market.”

Thus free competition among industrious individuals, who ultimately are trying to serve consumers, is the only way to reveal the worth of labor services and products. This is both just and efficient. There is no way for a legislator or bureaucrat to divine the correct minimum wage or to decide if “equal work” is being paid equally. Only the free market process can discover this information.

“Unfortunately,” Hodgskin added, “labour is not, in general, free.” What keeps it from being free? The state, which serves special interests.

Hodgskin emphasized that labor includes “mental exertion”:

Far be it, therefore, from the manual labourer, while he claims the reward due to his own productive powers, to deny its appropriate reward to any other species of labour, whether it be of the head or the hands. The labour and skill of the contriver, or of the man who arranges and adapts a whole, are as necessary as the labour and skill of him who executes only a part, and they must be paid accordingly.

Perhaps Marx should have read his Hodgskin more closely, and those who would legislate the level of wages today should read him for the first time. (I’ve also written about Hodgskin here and here.) So-called progressives who look to the state to set wages do a disservice to those who fare worst in the corporate state, because while progressives work on behalf of measures that must price marginal workers out of the market, truly radical reforms are overlooked.

Rather than empowering our rulers further, let’s empower individuals by freeing the market.

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Anarchists United on Feed 44

C4SS Feed 44 presents Uriel Alexis’ “Anarchists United” from the Students for a Stateless Society‘s Volume 1, Issue 3 of THE NEW LEVELLER read by Dylan Delikta and edited by Nick Ford.

With the growth of the producer’s network and the mutual trust relations promoted by the mutual bank, a truly revolutionary potential is unleashed. Increasingly more complex production processes can be organized through cooperatives, P2P projects, and other kinds of collaboration. This makes the network more and more independent from the state-dominated formal economy we live under today. As this network gets stronger and more resilient, more goods may be created inside of it, such as schools, aid to people in hardship, medical treatment and collective transportation.

Once a certain workplace had completely come under worker’s direct self-management, its products can be exchanged inside the network of independent producers on a mutual basis. This would greatly add to the stability and to the welfare of all inside the network, since a large quantity of people are now connected. We can see now that mutualist and anarcho-syndicalists can work together against the state and capitalism, achieving not only the goals they share, but also their more specific aims.

In the economic sense, the anarcho-communist societies would be outside the network of independent producers, since there would be no exchanges even in crypto-currencies. But certainly they would be connected by ties of trust and mutual aid. For example, the network could supply products and services for free through those members that so wished.

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Hobby Lobby — A Question of Agency on Feed 44

C4SS Feed 44 presents Kevin Carson‘s “Hobby Lobby — A Question of Agency” read James Tuttle and edited by Nick Ford.

To repeat, there were a lot of people whose agency was at stake here besides the Green family’s — in particular, the 70% majority of Hobby Lobby’s workers who are women. who may have been having a hard time finding work and accepted employment at Hobby Lobby because they really needed a job, who were glad to get health coverage — and who may someday desperately need “morning after” contraception. I felt sick about these people in a way after Monday’s ruling that I never would have about the Green family.

And questions of free association aside, an economic system in which a small wealthy family can wind up in the one-sided position of exercising their own agency at the expense of 13,000 others is a system that’s broken, sick and rotten.

The system we live in, in legal theory, is based on freedom of contract, and the idea that tenants and landlords, software users and sellers, and workers and employers are equal parties to a contract. But we all know that’s nonsense. We feel it in our bones.

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From the Cat to the Crescent

On Wednesday I participated in a Philosophy Club panel on “Politics and Philosophy” at the Coffee Cat; I argued that the anti-authoritarian structure of philosophical inquiry made philosophy into an anarchist enterprise.

Tomorrow morning I speak at the Students for Liberty New Orleans Regional Conference on “Liberty Through the Lens of Virtue.” Longtime readers can guess the general content: virtue ethics, classical eudaimonism, unity of virtue, thick libertarianism.

A Matter of Life and Death on Feed 44

C4SS Feed 44 presents Jason Lee Byas‘ “A Matter of Life and Death” from the Students for a Stateless Society‘s Volume 1, Issue 3 of THE NEW LEVELLER read by Trevor Hultner and edited by Nick Ford.

Even more fundamentally, both aggression and domination beat back the thing that makes us distinct from the dead. In so far as we are living, breathing human beings, we act according to our own will. Our choices are our own, and what we create are products of our own minds.

By falling under the control of someone else, that breath of life leaves us. We become instruments no more alive than the tools we ourselves work with.

Of course, because only life can create life, and only to the extent that people are free can any growth occur, we are never fully under the control of others. Nor could we be. Our Schrödinger society is a patchwork of periods where we live, die, and live again.

We spend our truly waking days in gardens among graveyards. Gardens that have either grown for the future harvests of our masters, or (more often) in everyday resistance to their demands.

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To Paul Krugman: Thou Art the Man

Paul Krugman, in denouncing the excessive market power of Amazon (“Amazon’s Monopsony is Not OK,” New York Times, October 19), proclaims that the Robber Baron Era ended when “we as a nation” put an end to it.

There’s a powerful story in the book of 2 Samuel about the prophet Nathan confronting King David after he arranged the death of Uriah the Hittite and took his wife Bathsheba for himself. Nathan told David of a rich man, with enormous herds, who had a guest to feed. The man, to spare himself killing one of his own many livestock, instead stole and slaughtered the pet lamb of the poor man next door (which, the Bible says, he fed from his own plate and loved like a daughter). Upon hearing this David became outraged and swore “As the LORD liveth, the man who hath done this thing shall surely die.” And Nathan replied: “Thou art the man.”

Not only did the rule of Robber Barons in fact never end, but in denouncing them Krugman reveals himself as one of their foremost apologists.

Far from bringing Robber Baron rule to an end, the Progressive Era stabilized it in a web of government protections and subsidies. For example, the FTC’s treatment of below-cost dumping as a “unfair trade” practice, by outlawing price wars, made stable oligopoly markets possible for the first time.

Let me state up front that, while Amazon doesn’t actually qualify as a monopsonist (that is, a market actor with monopoly buying power that can unilaterally set terms for sellers) it is at least an oligopsonist (in this case the largest of a relatively small number of major buyers/distributors). As an anarchist who viscerally hates large corporations, and hates perhaps even more all kinds of proprietary, walled garden platforms, I’d much prefer to see an open-source or cooperatively owned platform taking over Amazon’s current role.

But that being said, if Krugman wants to fight Amazon, he’s picked a mighty peculiar hill to die on. Specifically, he objects to Amazon’s use of its market power as a buyer to force down the prices of traditional publishers like Hachette. But those prices are themselves enormously bloated to begin with, because of the monopoly premiums attendant on copyright. Amazon’s use of its purchasing power to shave off that monopoly premium is analogous to, say, Medicare D using its market power as a large-scale purchaser to negotiate down the price of prescription drugs under patent. (Of course we know Medicare doesn’t actually do this, or hardly does it, because of the drug companies’ lobbying power.)

Support for draconian “intellectual property” laws, like the WIPO Copyright Treaty, the Uruguay Round TRIPS accord, the Digital Millennium Copyright Act, and the “intellectual property” components of all the so-called “Free Trade Agreements” proposed over the past decade or so, are strongly supported by both Republicans and Democrats. But the Democrats have an especially close relationship with proprietary content industries — the RIAA, MPAA and Microsoft are at the core of the Democratic coalition.

To repeat, the Robber Baron Era never ended. And far from being the Robber Barons’ enemy, the US government has been their chief tool for survival to this day. And perhaps the single most important function of the US government in upholding corporate power is enforcing “intellectual property,” so central to the business models of the proprietary content industries in the Democratic coalition. The most profitable industries in the global economy — entertainment, software, biotech, pharma, electronics — all depend on “intellectual property.” “Intellectual property” is central to the dominant industrial model by which Western corporations outsource all actual production to independent shops working on contract, but use patents or trademarks to retain monopoly rights over disposal of the product.

And perhaps more importantly “intellectual property” is at the heart of the business model of the new “green capitalism” or “progressive capitalism” personified by “patriotic billionaires” like Bill Gates, Warren Buffett and their ilk. Their business model depends on using “intellectual property” to enclose new, green technologies as a source of monopoly rents, or — as in Buffett’s case — using heavily subsidized “smart grid” infrastructure to make his wind farms profitable.

The Robber Barons are with us just as much as ever, their power depends entirely on the capitalist state, and “progressives” like Paul Krugman — wittingly or unwittingly — are their shills.

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A Plea for Public Property on Feed 44

C4SS Feed 44 presents “A Plea for Public Property” from the book Markets Not Capitalism, written by Roderick T. Long, read by Stephanie Murphy and edited by Nick Ford.

For many libertarians, the most important argument for private property is what Garret Hardin has labeled “the tragedy of the commons” (though the basic idea goes back to Aristotle). Most resources are rivalrous—that is to say, the use of the resource by one person diminishes the amount, or the value, of that resource for others. If a rivalrous resource is also public property, meaning that no member of the public may be excluded from its use, there will be no incentive to conserve or improve the resource (why bother to sow what others may freely reap?); on the contrary, the resource will be overused and swiftly exhausted, since the inability to exclude other users makes it risky to defer consumption (why bother to save what others may freely spend?). Hence private property is needed in order to prevent depletion of resources.

It might be argued that this the-more-the-merrier effect occurs only with goods that are wholly or largely nonphysical, but could never apply to more concrete resources like land. As Carol Rose and David Schmidtz have shown, [4] however, although any physical resource is finite and so inevitably has some tragedy-of-the-commons aspects, many resources have “comedy-of-the-commons” aspects as well, and in some cases the latter may outweigh the former, thus making public property more efficient than private property.

For instance (to adapt one of Carol Rose’s examples), suppose that a public fair is a comedy-of-the-commons good; the more people who participate, the better (within certain limits, at any rate). Imagine two such fairs, one held on private property and the other on public. The private owner has an incentive to exclude all participants who do not pay him a certain fee; thus the fair is deprived of all the participants who cannot afford the fee. (I am assuming that the purpose of the fair is primarily social rather than commercial, so that impecunious participants would bring as much value to the fair as wealthy ones.) The fair held on public property will thus be more successful than the one held on private property.

Yet, it may be objected, so long as a comedy-of-the-commons good still has some rivalrous, tragedy-of-the-commons aspects, it will be depleted, and thus the comedy-of-the-commons benefits will be lost anyway. But this assumes that privatization is the only way to prevent overuse. In fact, however, most societies throughout history have had common areas whose users were successfully restrained by social mores, peer pressure, and the like.

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Send Molinari/C4SS/ALL to Libertopia!

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Libertopia 2014 is coming up, Nov. 13-16. We – that’s the unholy triumvirate of the Molinari Institute, the Center for a Stateless Society, and the Alliance of the Libertarian Left (specifically the ALL Distro) – are hoping, as in years past, to have a presence at the conference, but we’re a bit tighter for finances than usual.

$400 gets us a booth for literature, outreach, and subversive convo; if you’d like to make a contribution toward this worthy goal, please visit our GoFundMe page.

Elections and the Technocratic Ideology on Feed 44

C4SS Feed 44 presents Erick Vasconcelos‘ “Elections and the Technocratic Ideology” read by Christopher King and edited by Nick Ford.

It’s not about being governed or not, it’s about who is going to do the governing. Who would we want to sit on the Iron Throne if not a “specialist?” Someone who wouldn’t be driven by politico-ideological passions, but by the “industrial values” Veblen cherished. Someone to oil up the gears of this great machinery that is society.

That is all hogwash, of course, because when we talk about politics, we talk about ideology — about prioritizing, about choosing one collective goal as preferable to another. However, there are no macro social ends, at least not apart from a sum of individual goals or as a mere metaphor. Which is also the reason why it isn’t possible to put public management under the control of experts, because the very definition of what constitutes “public management” is an ideological question subject to political negotiation and resistance.

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