Tag Archives: Free Market

Is Anarchism a form of social Darwinism?

Chaos
Image by nickwheeleroz via Flickr

I can foresee that a common criticism against my explanation of how an anarchist society would look like, will be to compare it to social Darwinism. That I’m suggesting that we let society run along and let natural selection choose who gets to live and prosper. One might bring forth the counter example of the “Free Markets” and how letting them run unmanaged and unhindered (as their proponents suggest) has ended up with disastrous results.

But I’m not suggesting anything like that. I have made it very clear that I put far more weight to the utilitarian result of the simple rules we choose for the basis of our society. In short, the end result needs to be the maximization of all human happiness and the society we try to create is simply the means to this. This is very far from the idea that we should choose a set of rules and stick to them, come what may.

In fact this is why the free markets fail so miserably. The central idea of the “free market” is similar to mine in the sense that they suggest that we should stick to some simple rules and let the rest fall in place around them. Those rules are a combination of respect for private property, respect for contractual agreements, and non-aggression. Proponents of such combinations claim follow two kind of argumentative paths. Either that the principles of a free market are a natural law or that they bring a utilitarian result in regards to more freedom (which we assume would make people happier).

But none of these can be sufficiently proven. It’s impossible to display the existence of this “Natural Law” as it’s usually based either on religious underpinnings or personal delusions and it’s impossible to display the utilitarian results of free market principles because of the chaos theory. The best one can predict about a future free market society is that it will have those principles. It will respect PP, contracts and non-aggression.

But such a society could range from a human paradise of countless small farmers/artisans in an egalitarian formation, to a dystopia of mega-corporations controlling all the resource and 99% of humans being subsistence wage-slaves with no rights except the right to serve a boss. This is more problematic when seen through an utilitarian perspective (for freedom) because some of the principles can easily lead to the antithesis of freedom, such as the loss of freedom one has while working for a boss or the capacity to engage in slave-contracts. The fact that whenever a laissez-faire conception was attempted it ended up in huge human misery only serves to question their capacity to achieve their ideal goal.

However, what I am proposing is not simply to choose some rules that I claim will lead to a better result but rather to choose rules that tautologically will lead to that result. A society based on democratic values will be democratic. A society based on possessive ownership will be possessive and so on. What this means is that if there is a value that we believe should exist in a future society, we should be making that value a core rule to be espoused, promoted and defended by itself. Not as a possible result of some other value. For example: to suggest we all follow “sticky” ownership rules because it will lead to freedom of speech is misguided. It will serve us far better to follow freedom of speech itself because only then will we be sure that it will lead to a society which values freedom of speech.

Furthermore, I’m not even suggesting we select some concepts monolithically. I do not say we should choose those values and also a value to never change them. As I explained in my previous post, it might well be the case that at some indefinite point in the future, Anarchism will be sub-optimal itself. I cannot even imagine such a scenario but I can accept the possibility. Therefore, we should always be open to changing our core ruleset when the situation requires it and this should be done in the same way as before: Directly embrace the value that we would like to have in the future.

This is another way by which anarchism differs from social Darwinism and free markets, which say that the values themselves should never be changed and we should simply let societal evolution and natural selection to take their toll. But this is simply giving up one of the most basic and useful features of humans: Our ability to change our environment (which includes societal rules) as a means of adaptation. Therefore it’s not surprising that social Darwinism is such an utter failure in regards to human happiness.

In short, Anarchism or at least the Chaotic conception of Anarchism (Chaos Anarchism? Chanarchism?) that I promote, is not a form of social Darwinism because we control our environment instead of us being controlled by it.

I can foresee that a common criticism against my explanation of how an anarchist society would look like, will be to compare it to social Darwinism. That I’m suggesting that we let society run along and let natural selection choose who gets to live and prosper. One might bring forth the counter example of the “Free Markets” and how letting them run unmanaged and unhindered (as their proponents suggest) has ended up with disastrous results.

But I’m not suggesting anything like that. I have made it very clear that I put far more weight to the utilitarian result of the simple rules we choose for the basis of our society. In short, the end result needs to be the maximization of all human happiness and the society we try to create is simply the means to this. This is very far from the idea that we should choose a set of rules and stick to them, come what may.

In fact this is why the free markets fail so miserably. The central idea of the “free market” is similar to mine in the sense that they suggest that we should stick to some simple rules and let the rest fall in place around them. Those rules are a combination of respect for private property, respect for contractual agreements, and non-aggression. Proponents of such combinations claim follow two kind of argumentative paths. Either that the principles of a free market are a natural law or that they bring a utilitarian result in regards to more freedom (which we assume would make people happier).

But none of these can be sufficiently proven. It’s impossible to display the existence of this “Natural Law” as it’s usually based either on religious underpinnings or personal delusions and it’s impossible to display the utilitarian results of free market principles because of the chaos theory. The best one can predict about a future free market society is that it will have those principles. It will respect PP, contracts and non-aggression.

But such a society could range from a human paradise of countless small farmers/artisans in an egalitarian formation, to a dystopia of mega-corporations controlling all the resource and 99% of humans being subsistence wage-slaves with no rights except the right to serve as boss. This is more problematic when seen through an utilitarian perspective (for freedom) because some of the principles can easily lead to the antithesis of freedom, such as the loss of freedom one has while working for a boss or the capacity to engage in slave-contracts. The fact that whenever a laissez-faire conception was attempted it ended up in huge human misery only serves to question their capacity to achieve their ideal goal.

However, what I am proposing is not

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A Right-Libertarian primer to Libertarian Socialism

RedblackstarflagI’ve been discussing with Right-“Libertarians” lately quite a bit, especially after the Division by Zer0 was linked from a related social network as well as in Reddit. Unfortunately it seems that while most Libertarian Socialists are aware of the positions of such opponents, it’s very rare for propertarians to be familiar with LibSoc positions, leading to the same tired old arguments that one hopes the AFAQ would have prevented by now.

I’ve been arguing against those points so often lately that I’m really getting tired of repeating myself every time some propertarian jumps to the same conclusions just because they don’t know better. As such, I’ve decided to write this primer which will simply be a list of relevant links touching on all such common points raised. I’m hoping it will serve as a handy link to give to those unfamiliar with LibSoc and avoid needless repetition.

Isn’t Libertarian Socialism An Oxymoron?

By far the most common reply once someone first hears about it. It’s also the most telling since it shows that the one asking it is very unfamiliar with LibSoc and thus a perfect candidate for a link to this primer.

Abolishing Private Property

You will certainly be confused about what LibSocs are talking about if you do not realize the way that they use the term “Private Property”, what they mean by the abolition thereof, what Possession is and the fundamental differences between them

Free Markets and Socialism

Private Property is usually presupposed in the existence of the free markets and/or liberty but this is not required. Unfortunately from this presupposition one then makes the straw-man argument that socialists wish to coercively prevent free markets or voluntary exchange. This is false. Not only are there forms of socialism which are compatible with Free Markets such as Mutualism but even communists wouldn’t try to stop it actively.

The Labour Theory of Value

Libertarian Socialists as a rule tend to support the Labour Theory of Value in some form (although that’s not always the case). Right-Libertarians are trigger happy in accusing them of supporting debunked theories based on a argument from authority (the authority of Boehm Bawerk mainly). But the reason why socialists still support the LTV is because we see it as the most scientific way to describe the capitalist mode of production and because the criticisms brought against it are generally weak.

Why can’t we all just get along?

A very common point makde, especially from those calling themselves “Anarcho-Capitalists” is the request to put aside our differences and work together to topple the state. They do not understand why LibSocs want nothing to do with them.

Human Nature

Ah, human nature. The favourite argument of every two-bit authoritarian. There has never been a concept more used from each and every political camp as an ultimate trump-card against all other social theories.

In Closing

I will try to keep this primer up to date with newer or better posts and I’ll be adding more classic questions once I get annoyed at them enough. Please do recommend more such subjects and provide links for them as well. I will be happy to improve this guide as much as possible.

Other than that, link, tweet and share far and wide. Hopefully we might avoid wasting so much time explaining the same concepts over and over again.

As for any right-“libertarian” having reached this point, I hope that by now you have a better understanding of LibSoc concepts and we can avoid rehashing the same stuff with both sides getting increasingly annoyed at the apparent obtuseness of the other. Hopefully this will help the dialogue between us to be constructive rather than an exercise in frustration. I hope you too will share this article to people from your side that you notice are ignorant of the fundamentals.

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Why are you a Market Anarchist?

colourful spices in a french market
Image by GavinBell via Flickr

In recent posts I’ve been arguing a lot with various strands of Free Market Anarchists on the benefits of using such a free market approach and on trusting in them to achieve a better result for the society. The more I discuss, the more it dawns to me that there is a fundamental distinction between them and it basically relates to the reasons why one embraced Free Market Anarchy as a social theory.

The way I see it, there are two different reasons why one can end up being a Market Anarchist.

  1. Free Markets are the best way to achieve liberty.
  2. Liberty is the Free Markets.

Proponents of the first type are generally the ones who are far more interested in achieving the most personal liberty rather than in the specific system they will use to do so. This is the utilitarian perspective which considers that the best result for humanity as a whole is by maximizing each person’s individual liberty and are under the belief that free markets facilitate exactly that. I generally have no problem with this type of Market Anarchist as sooner or later they will come to the conclusion that the best way to maximize individual liberty is by achieving egalitarianism as well and thus turn socialist. This seems to be the way most Mutualists I’ve spoken with think of it at least.

In short, for the first type, Liberty and by necessary extension Equality are the most important part, the end goal. The Free Markets are merely the best way they believe we have to achieve this result. Such a perspective is open minded. Given enough arguments and solid criticism showing that the free markets cannot, in fact, achieve this goal, that person will discard this belief and embrace something that can. That is not to say that all will, but the fact that they are open about it is what will facilitate dialogue and constructive discussion.

It is the second path to Free Market Anarchism that I find flawed.

The latter type are nominally for liberty as well but they have a very distorted view of it. One seems to start again from questing for the best way to achieve liberty but then somehow is quickly immersed in Free Market rhetoric from the likes of the Austrian school of Economics. Using theoretical proofs of “working (propertarian) free markets” based on pure logic and unrealistic assumptions, the concept of liberty is conflated with the concept of propertarian free markets. It becomes dogma.

The original question of “what maximizes liberty?” is forgotten. All arguing commences from the position “Libertarianism is the Free Markets” which ends up misrepresenting the position of anyone who argues against this as authoritarian and easily devolves into flamewars. Even worse, when the logical consequences of such a perspective are pointed out as non-libertarian, an extreme rationalization kicks in to turn black into white. “It’s libertarian as long as it’s voluntary“, “It’s libertarian if no fraud or violence is involved.” etc etc. It is through such a distortion that the clear, authoritarian nature of a hierarchical relationship such as the one between boss and wage-worker can be rationalized away as “libertarian”, even though the worker maintains no freedom while working. It is through such a distortion that voluntary slavery can be defended as “libertarian.”

If the original question is brought up again, if the original economic assumptions are challenged, I very often receive a fallacious responses of a religious fervor. The most common being an argument from authority, most usually the authority of the Austrian school of economics naturally. When that fails, the most common fallback arguments I see is either the abstraction of the free market to the irrelevant or the trounce card of arguing for private property rights (and by extension Free markets to control distribution) via the Natural Law concept.

So the main difference between these two paths to Market Anarchism can be separated between Utilitarian and Ideological perspective. The Utilitarian perspective starts from the trying to achieve a utilitarian result, discovers that maximizing liberty is a necessary part of it and considers that free market anarchism is the best way to achieve this. The ideological perspective on the other hand starts from various asserted axioms, eg “Private Property rights are an objective reality”,  “The Non-Aggression principle leads to greater liberty”, “Free Markets are Pareto Efficient” etc and finds that Free Market Anti-Statism is the ideology that brings them all together in one package.

Thus, whatever the practical result of such a Free Market Anti-Statism might be is irrelevant as it has already been defined to be “Libertarian.” And it is this exact reason why I often find it so frustrating to discuss with (or even read) the latter type of Market Anarchist, as something that is obviously authoritarian or exploitative in nature is ignored at best (“It can only happen via the state”) or defended at worst (Slave Contracts).

But there is one particular argument I hear from the ideological market anarchist. When I point to a very possible authoritarian result of propertarian markets, such as sexual harassment in the workplace, crypto-feudalism or simply widespread wage-slavery, a common response (right after defending it as “voluntary”) is to claim “Oh that would probably never happen without the state anyway”. But then I have to ask: Why do you care about that? Whether that comes to be or not should not matter at all as long as it is the result of the “free market” should it?

In these market anarchists I see a strained dualism, where that person really wants to have a generally libertarian society, where hierarchy and authority are minimal if not abolished but at the other hand, just cannot bring themselves to consider discarding the propertarian free markets concept as all. It manifests itself in expressions such as “Certainly the worker has to sacrifice his liberty as a wage-slave and certainly sweatshop wage-slavery is not a good result but in a truly free market, the increased competition would give all workers such a competitive advantage that sweatshops could never exist and most people would be able to be self-employed if they really wanted to.”

If you would not like to see widespread wage-slavery, propertarian feudalism, hierarchy from 3rd institutions etc then why do you not start from this position in the first place? Why don’t you start by considering a socioeconomic system which would make such possibilities systematically impossible. Perhaps this will be possible via the free markets. Perhaps you’ll have to abolish private property. Perhaps you’ll have to move away from the markets altogether. But as long as your basic results are achieved, you shouldn’t care anyway, right?

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Free Markets are libertarian but libertarianism is not the Free Markets

Carrots and other vegetables for sale at Balla...
Image via Wikipedia

Just thought I’d throw this out there since this idea, that the only way to have libertarianism is to have a free market economy, keeps popping up from people coming from the right. It’s even more annoying when the same people also insist that the only way to have free markets is in a propertarian system where hierarchies of landlords and bosses wouldn’t affect the “libertarianism” of the society at all. Oh no.

Yes, a truly free market is a libertarian concept as it is based on the condition that people freely trade with each other, but then you still have to define what a truly free market is. Not all markets are free and the existence of a market is not enough or even necessary for liberty. A free society might choose voluntarily to avoid money and markets if the individuals within it so wish thankyouverymuch.

This confusion imho arises from the common misconceptions of people on the right about “human nature” and “natural human societies.” Specifically there is the impression that humans societies will naturally default to a market economy and thus some kind of coercion will be necessary to stop people from “freely trading with each other.” From this assumption spring all the automatic accusations against libertarian socialists of being “statists”, “authoritarians” etc which when directed against Anarchists can be just a tad annoying.

In fact, this argument is ridiculously common. From my experience, it’s so common that in discussions you’ll have with a free market proponent (anarchist or minarchist) where you mention that your idea of a future society will not include free markets, there a very high probability that their next response will be something like this:

How are you going to stop people from trading then? Are you going to forbit it forcefully? Will you use your “people’s army?”. Authoritarian! Statist!

Seriously people. We don’t care if you trade to your heart’s content in your own free societies, but just because we can visualise one where people have decided not to subject themselves to social darwinism does not automatically make it less libertarian. Markets will not be even explicitly forbidden in a communist society in the first place, people within it will be free to trade just as well, make up their own paper currency or whatever other such nonsense. We simply expect that nobody will wish to do so as it will be wholly unnecessary and alienating for the participants.

The only thing LibSocs would ever actively oppose is attempts to re-introduce hierarchies once more into human existence. It is not oppressive to oppose all oppression.

So can you please cut it out already with the misguided accusations? I’d be really appreciated and I can guarantee it will help your dialogue with us be constructive rather than devolving into a flamewar.

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The Kudos economy and some criticism.

Kudos Burgerville
Image by daftgirly via Flickr

William Gillis writes an interesting post about the differences between Capitalist and Communistic ownership rights and gives a different perspective of how market theorists misunderstand the criticisms Anarcho-communists are directing at Private Property. It’s a bit thick to parse but I think it’s worth a read especially on how he takes the distinction between property and possession to a different dimension and the 2 pointed critiques of Private Property.

Of course there are some parts I have to disagree, for one:

Obviously however, just because such differing economic approaches might make better software for a fraction of the energy Microsoft spends doesn’t mean that it can do things like move goods between locations to satisfy demand efficiently or signal all the costs of one consumption versus another. Without the capacity to assign value to spatial/physical relationships (as with the realm of actors and objects) one can’t concretely mediate between those relationships

This particular part is, I believe, making the mistake merging two different concepts of a capitalist economy. Production and distribution. William accepts that socialized production seems to be much more efficient than the capitalist mode of production but he then proceeds to criticize the former for not achieving efficient distribution. But this is something unrelated to the productive process so I assume he’s attempting to criticize an explicitly Communist (or moneyless) way of distribution (as opposed to collectivist or syndicalist which might still retain money).

The problem is here again some of the assumptions of free market theory. The assumption that free markets satisfy demands and the assumption that the price mechanism passes along the correct signals. Unfortunately none of these assumptions are right as  the markets can only satisfy effective demand and the signals ignore externalized costs and don’t provide enough information. By not basing transactions on prices, but simply on pure supply & demand (as would be the case in a communist society) both of these issues are avoided for demand is based on people’s needs and the productive process and democratic control of it ensure that the supply is analogous to the costs.

The second criticism I have is directed towards this sentence

Anti-capitalists often disingenuously blur the distinction between wealth and coercive power — wealth and/or disequilibria in wealth do not inherently have to grant any capacity for social control — but it’s certainly true that direct pursuits of power and wealth share the same form.

I don’t think it’s disingenuous at all as anti-capitalists are criticizing actually existing capitalism and not theoretical market constructs with wildly different parameters on production and money. In actually existing capitalism as well as in any market based system where money is arbitrary (ie not tied to labour-hours or something as solid) and private property the dominant form of property, the accumulation of wealth is very much a measure of coercive power as it directly limits the options of those who do not get to have any. But no anti-capitalists will consider that wealth is power when in a system which has been specifically setup so as to ensure that wealth is not power. The only problem is that all conceptions of a propertarian economy have not managed to avoid this problem.

Which brings us to the interesting part of Williams conception of a market economy. It looks like something taken out of the Algebraist to tell the truth and I can’t but worry that it’s as much of a fictional concept. You see the idea looks workable, in a theoretically constructed society around the concept of a reputation market, and I do think that if we did get such a system then I (or most communists I assume) really wouldn’t have any issue with it. Nevertheless my main criticism would again lead to ask: How do we get there?

If a labour-time-tied money system is already a difficult concept to grasp and put into practice or even move towards a situation where it can be put into practice, an even more extravagant concept based on reputation just strikes me as half-way impossible. I would be far more interested to see a viable process by which such a system might become a reality until which point, I cannot consider the actual criticisms made by William against anti-capitalists to hold much water, as they were based on comparing them to a utopian construct. Unfortunately I believe such a practice ends up diverging attention from practical issues and solutions (ie criticism of capitalism and ways to fix things) and gives some ammo for market theorists who would twist and grasp any concept in order to prove that “Free Market (Capitalism) works!”

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Quote of the Day: The "Free Market" Recipe

Quoth Kevin Carson

The time-honored “free market” recipe, among the ruling classes, goes like this: 1) rob the producing classes of their traditional property rights in the land, and turn them into tenants at-will of the plutocracy; 2) through coercive controls on the population, like the Combination Laws and Law of Settlement, make it impossible for the producing classes to bargain effectively in the wage market; 3) when the process is complete, talk a lot about how great the free market works, and justify the existing concentration of capital ownership as a result of the superior efficiency of those who came out on top.

So yeah, I’ve been reading his vulgar-libertarianism watch series which is excellent as a general rule, but I just couldn’t avoid quoting this particular part.

Go and read the rest of the pwnage.

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In which I try to clarify LibCom for Stefan Molyneux

really really free market!
Image by Shira Golding via Flickr

Last week in a video from Freedomain Radio was posted in /r/Anarchism with the notice that its host, Stefan Molyneux – apparently an “Anarcho”-Capitalist of some renown – was honestly curious about some aspects of Social Anarchism, such an Anarcho-Communism or Anarcho-Syndicalism,  and wished that “someone competent” from that movement call him to clarify some of his contentions.

Although the fact that he didn’t understand some aspects about this very popular movement and for some reason couldn’t find out sources of clarification (although a wealth of information is at best, one internet search away) was immediately suspect, I decided to take him up on this “challenge” (Yes I do understand it wasn’t a formal challenge, I’m just using this word for lack of a proper alternative).

After some fiddling with the way to call-in1 I’ve finally settled to using Skype to call their landline number and soon it was my turn to speak. You can find the discussion here starting at 22:30 (I’ll post the Youtube vid when Stefan uploads it). I’m not nearly as glib as Stefan and thus you have to suffer through my thick accent and “umm”s as I’m trying to make my point (although hearing my playback, I don’t think I was as muffled as he claimed). Which is incidentally why I have not made any videos 😉

Unfortunately I must say that I was disappointed in the end. While Stefan proclaims his wish to understand the Social Anarchist movement, I got away with the impression that this is simple rhetoric to appear open-minded. I didn’t get the feeling that he was trying to clarify points he was not sure of, but rather throwing various concepts at me in an attempt to trip me up so that he can take over and proceed to claim intellectual superiority, as you will find out he did.

The points we discussed in rapid succession were:

  • Does LibCom discard Property Rights?
  • How can a society progress from Primitivism to LibCom?
  • How does  new industry get created?
  • How would a future LibCom society work?
  • How would you proceed to a future LibCom society?

Now each of these points, especially the last two, takes some explaining and I could only give the vaguest framework in all of the ~15 minutes I was on the phone (of which I spoke for about 7 at best). In the last one especially, arguably the most detailed and important part of Anarchist thought, I was given the whole of 1 minute before being abruptly cut-off mid sentence.

But what irked me most is that after being cut-off Stefan proceeded in a long-winded monologue in which he assumed ignorance of my part of what a LibCom society would look like and proceeded to claim superiority and attack my presumed ignorance of both the details of the future and of how Free Markets really work.

Needless to say he didn’t make any arguments I couldn’t counter, only that I didn’t get a chance. In fact, I found out this way of kicking off your caller and then making a closing statement without allowing a rebuke as a low trick which doesn’t really raise my perception of Stefan a lot. If he really didn’t have enough time for me, then just leave it at that. Don’t silence your opponent so that your argument goes unchallenged.

So here I’m also going to take the opportunity to address what Stefan said after I was disconnected:

1. You need to think in some detail.

Here Stefan made the assumption that I didn’t have any details on my ideas other than some vague concept of “Strikes and so on”. This is in fact quite far from the truth and such an impression was only given due to the short amount of time I was given to express them and the constant switching of subjects which was not allowing me to elaborate more on any one of them. Anarchists have about 150 years of political theory and needless to say that everything that needs it, has been described in as much detail as possible. Further than that, we also have around 100 years of actual, practical experience in social struggle and revolution which the theories have taken into account and been modified accordingly (which is the reason for example why social anarchists reject reformist tactics).

On the opposite side, AnCaps have at best 60 years of theorizing about a future Utopia of free markets and absolutely no idea how to get there. Stefan boasted about his 1 year of thinking about this, which is practically nothing in the larger picture of things. And this is why I was trying to explain that it’s not worth spending so much time visualizing the perfect AnCap world, when you don’t have the progression tackled first.

2. You need to work within the system before you criticize it.

The gist of this argument was basically that unless one is an enepreneur or capitalist, they don’t understand the system and thus they should refrain from criticizing it. Here Stefan considers that since his experiences in this have convinced him of the superiority of the Free Markets, then it’s obvious that someone who criticizes them must not have enough experience to make an educated criticism.

Of course he realized the trap he put himself into, when he admitted that he could also be called on criticizing the government while not being a politician. He attempted to get out of this by claiming he has enough experience in working with the govt and being educated by them that he can now make an accurate criticism. However he misses the point that Anarchist and all other critics of the Capitalist system have as much of “peripheral” experience of the Capitalist system and the markets as he has of the State. We too have worked for Entepreneurs. We too have had to suffer “market discipline”. We too have been educated and propagandized ad infinitum by a system which treats Capitalism as the natural state of affairs. The indoctrination towards this is as big, if not bigger than the indoctrination towards Statism.

And thus Stefan’s contention can be turned back upon him. If he wished to support the system, he should try becoming a wage-slave on a third world country to see how privileged he is currently. Or he should take an unskilled job at a MacPosition  to see how superior the entepreneurs and bosses really are. There’s lots of experiences that Stefan has not lived in order to judge Capitalism as a good system, Experiences which the Anarchists and other Socialists have lived through, which is incidentally why the movement was started: From experiencing the true nature of the system as the majority of the world does rather than the privileged few.

He also did a grave mistake of pointing out programming and web developing as an example of the free market (that one should experience). A mistake that undermines his own position as an “Anarcho”-Capitalist. You see the environment he works in, is a peculiar one because it differs from a capitalist system in some very important variables. The most important one, is that the workers own the means of production. Programming languages are free. Web Servers are free. Replication is free. The only cost one has to start their own business online is the small cost to get a hosting plan, and most often than not, not even that2!

As such, to point to the internet as a free market paradise is to concede that a truly free market can only work via Socialism, much like Mutualists have been claiming for ages. In fact, what Stefan sees and is inspired of, is the kind of thing Tucker was seeing in the 19th century, when the land was free and people could start their own homestead or business at very small upfront cost and retain it. However, this is not Capitalism, as much as Molyneux would like to redefine it. Not only that, but actual Capitalism constricts such a development as it is inherently destabilizing to it. It happened in Tucker’s age and it is also happening3 now in the internet.

In closing, I came out of this discussion disillusioned. For all of Stefan’s proclaimed wish to understand and speak with the other side, it seems to me that he only wishes to score some easy points with his internet audience. If he wasn’t, he wouldn’t have been so eager to kick me off his show with vague suggestions of a one-on-one talk without even bothering to learn who I am! It seems to me that instead of actually understanding what I said, he was all to eager to misrepresent Social Anarchism and cover that by continuously repeating his “wish to understand.”

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  1. Blogradio’s builtin call-in feature sucks in GNU/Linux. I don’t know why this is so but calling via it, the voice reaches me as if in slow-motion. /rant []
  2. All because of Free Software naturally []
  3. or at least, the Powers That Be are working towards it. See Patents, Copyrights, Net Neutrality etc []

It's not the end that's important but how we get there.

A group of Chinese migrant labourers arrive at...
Image by AFP/Getty Images via Daylife

I’ve spend a hefty chunk of the last 3 days arguing with various strands of market anarchists1 where the discussion mainly centered around the form and limitations of the future society.

This is a main trend I’ve noticed from those Anarchists and “Anarchists” who espouse mainly the Austrian analysis of economics; the trend to emphasise a future possible reality and how in the ideal situation the free market would work in the best possible manner. However, in an idealized society, any system can work. Anyone can in their head imagine all the necessary factors that will have to exist in order to make the system run.

The problem however is that reality never conforms to the ideal. Any perfect system imagined in our head will always fall far shorter than practice and this is not because the person thinking about it is stupid, but simply due the sheer immensity of factors one must account for. One will always consider the problems he is most familiar with and their solutions, but for every situation one resolves, there’s a 100 we haven’t thought of and another 100 we can’t even consider because they will only appear in the future.

These kind of ideal systems are utopias. They work only because they are a shortened version of reality, only detailed to the extend that the original thinker and his followers have thought about potential problems and their solutions.

And the reasons why Utopias fail, is because the thinkers have wasted all their time imagining how the end result might be, and very little to plan how to get there. But the second part is the only thing that matters. In fact, I would go as far as to say that the particulars of any future society are almost not important at all. It’s the base that’s important. The main idea that permeates the future society that we want to achieve is enough to be painted in rough colours, and let the future people add the details

To speak for myself, I suggest egalitarianism. A future society where people will be equal in power. I maintain that as long as equality in power exists, coercion (active and passive) will be impossible and as a result true freedom will flourish. This a broad stroke, but it’s enough. And the benefit of such broad strokes is that it allows people to concentrate on getting the baseline right, rather than bickering over the details. It also directs the energy to the part that is most important. Getting there.

However, market anarchists seem to miss 2 important points: The difficulty of using free market tactics to get rid of distortions of power and the fact that the means strongly colour the ends.

The first part is almost obvious from today’s society. In a free market where (gross) inequality exist, the power keeps flowing towards the powerful. This happens because money is power, and in any market exchange between unequal individuals will benefit the strongest over the weakest. This allows the strongest to use all means at their disposal in order to protect their position, and one of those means is the state.

As such, it is silly to expect these people, the ruling class, to embrace the Free Market, to voluntary reduce the protectionism they enjoy and the like. If they start to do so, then it can only be because it is to their benefit. But it is equally silly to expect free market tactics to work immediately post-revolution. A revolutionary society will not immediately arrive at the end of the road, in fact the biggest challenge will only be starting. That path will be the most crucial, with counter-revolutionaries waiting for a chance to return to the old system, relics of the previous society standing which will need to be dismantled and many people who still think by the old values.

To attempt and go directly to a free market economy at this point would be to ignore the fact that the free markets exarberate inequality.

Which leads us to the second problem. Mainly that the path ones takes is what defines the end one will have. If we have a revolution, the methods by which it will happen will define the immediate post-revolutionary organizations we will have. And those organizational methods will define how the society will slowly evolve to its newer form.

To give you an example, if a revolution happens due to syndicalist action (say larger and larger strikes and takeovers) then these unions will be the classic form around which a society will condense as the heat of action cools down.  People will then continue working with the organizational form which has proven successful to them, forming federations and confederations of syndics and so on. Thus, they will have small incentive to switch to a system they are not familiar with.

This poses a tricky problem for those who envision a different kind of ideal society. Taking market anarchism again, if we accept that free market tactics and rhetoric cannot take down the current system (because they will promote the current distribution of power), then this means that market anarchists will have to support another type of organization that has a chance of revolt. But once this happens, people will still need to deal and extinguish relics of the previous system, on which a free market cannot stand (as it needs an idea society remember?).

So at which point will these piggy-backing market anarchists get to put their system into action? If they wait until the system solidifies in an anarchist form, it will be already too late. The system will be communist, syndicalist or whatever. There will be no further reason for reform. If they try to take over soon after the revolution, then the lingering inequalities and mentality will take hold and possibly defeat the whole thing.

The only chance then left for idealists, is to somehow prove that they have some means of provoking an anarchist revolution in the first place which will then be able to progress towards the perfect free market. Or to expect that a future non-market society will be so unstable that it will voluntarily cry out for the free market. To tell the truth, the later does not really worry me, as long as market anarchist support a social revolution now. And the former has not yet, provided any convincing (to me) methodology.

For those idealists of the free market though, who do not see any path towards it; to stick to the ideology is simply useless. If you can’t figure out how to achieve it (and no, I do not consider begging the government to be a viable tactic) then you might as well not waste your time thinking about it. If you think you can only get there once the socialists have created an egalitarian society, then start struggling for that and don’t waste our time about the Free Market.

And if you are of those few that think there is a way through free market tactics, then you’d better have a damn good excuse on why these tactics can work, even though the free market theory is only valid for a very particular society in the first place.

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  1. I will use this term to define those who support a stateless society where usury (wage-labour, rent & interest) is possible and a free market handles distribution []

Why the Free Markets concept is useless

Law of Diminishing Marginal Utility
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It is something I stumble onto extremely regularly lately, people who claim that only a free market economy would be capable of efficiently allocating resources, or maximizing the utility of most people. That any other system will by definition lead to disutility.

This is a very bold claim, and one is well justified in asking what proof we have that such a system would indeed have this result. And this is where the problems start. The most common answer, especially from proponents of the Austrian school of economics or people accepting most of their arguments, is that this is not provable. Rather, this is based on logical deductions from axioms.

This capability of the markets is then contrasted with mathematical proof. That is, the fact that free markets would lead to efficient allocation etc is as solid as saying 2+2=4.

However, if this kind of argument is espoused, then a major flaw appears. Mainly that mathematics, and other axiomatic concepts, cannot tell us anything useful in isolation from reality and empirical evidence. To give you an example, to claim that markets are axiomatically defined as always leading to pareto efficiency does not tell us anything about which system humans should organize their societies around. It simply means that the concept of the markets is separated from what is commonly referred as the markets now.

Under this kind of proof, the market can easily be, say, a communist society. But if whatever will lead to Pareto efficiency will automatically be a “free market”, as humans we still face the problem of discovering which kind of system will lead to Pareto efficiency. To turn around and say that the free markets will, and by that imply a very particular system based on particular property rights and laws, is an equivocation fallacy.

The problem of course, is not that some concepts have been turned into axioms, as by itself this practice wouldn’t lead to any normative conclusions, much like pure mathematics can’t either. The problem comes because Free Market economists have attempted to sneak descriptive concepts as axioms, something which would allow them to make claims about reality. For example, the idea that a human always acts to fulfill his strongest desire first.

But the problem with such an act, is that these descriptive facts have been conceived out of pure air. Without empirical proof, any such “axioms” introduced run the problem of having minor errors, minor facts that the original thinker didn’t know about. And as most people know, the slightest error in a purely logical edifice, can lead to a wholly wrong result.

Which is why actual science requires empirical observation, repeatability and falsification as it attempts to iron out errors of human thought or modify the facts, ever so slightly, so as to make the rest of the logical deductions from the facts, as solid and correct as possible.

Proponents of the Free Markets do not do this however. They start from a few basic premises, a few of which should have been empirically tested before being accepted, and then build based on pure logic from there. They then claim that like mathematics, the result, as long as no errors in the calculation have been found, cannot be anything but correct.

And most importantly, real empirical data that refutes the results, is not used to find errors in the premises, but rather dismissed. It is claimed that if logical results do not match the reality, then there’s some factor in reality that skews them (what it is, is not important but it’s most likely the government). But this is the problem! What exactly is the factor might be critical, as the factor might be that one of the “axioms” is wrong!

Market Anarchists would have us believe that a free markets within a very particular society would work for the best result and thus, we as humans should aim for this particular society structure. But this is not proven. It is asserted. It starts from the premise that a Free Market works in a particular way and that is based on assumption of how reality and particularly human psychology works!

So why is the concept of the Free Markets useless? If “Free Markets” is defined as being a utilitarian result, then anything that achieves this result is a “Free Market”, and to find that “anything” we’ll again need to use empirical evidence. If Free Market is logically concluded from a few premises to lead to a utilitarian result in a particular society, then unless these few premises are empirically proven, we cannot and should not trust the results, nor aim for that particular society.

In the end, the Free Market concept is useless because it tries to prescribe reality independently of any empirical evidence. And like all other such independent concepts, like mathematics or language it can either tell us nothing, or lead us to the wrong path based on equivocations.

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