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Thread: Capitalism Versus Free Enterprise

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    Capitalism Versus Free Enterprise

    Capitalism Versus Free Enterprise

    A Review of Kevin A. Carson's "The Iron Fist Behind the Invisible Hand"


    Every so often in the history of liberty a book or pamphlet has come along that has revolutionized libertarian thought and practice. One of these is Thomas Paine's "Common Sense" which was largely responsible for popularizing the ideals of the Enlightenment and the American Revolution. Another is Lysander Spooner's "No Treason" which utterly demolishes the absurd "social contract" theory on which constitutionalist states are ostensibly based. Hans Hermann Hoppe's recent work "Democracy: The God That Failed" thoroughly refutes the notion that modern democratic statism can be reconciled with liberty or even represents an improvement upon earlier monarchical states. Now comes Kevin Carson's "The Iron Fist Behind the Invisible Hand".(1) Just as Hoppe has revolutionized modern political philosophy by drawing and expanding upon the work of the late Murray N. Rothbard and his teacher, Ludwig von Mises, Carson has, in the space of twenty-four pages, revolutionized political economy by expounding upon the work of Rothbard and another of his influences, the nineteenth century individualist-anarchist Benjamin R. Tucker.
    Historically, anarchists have been divided on the question of markets. Traditional anarcho-socialists have typically rejected the market seeing it as nothing more than a source of predatory competition, concentration of economic power and exploitation. Most classical continental European anarchists, particularly the Kropotkinists, sought to abolish the market altogether in favor of a decentralized collection of autarchist communes based on production for subsistence, although some traditional anarcho-communists accepted the idea of free exchange or barter between independent communal units.

    Some American and British anarchists, such as Tucker or John Henry MacKay, preferred a lassez faire variation of anarchism consisting of small property owners operating on a stateless free market. Some of the differences between communist and individualist anarchists seem to be more of a cultural than economic nature. Anarcho-communists tended to be concentrated in nations, such as Russia or Spain, where industrial capitalism was far less advanced and the old feudal order remained largely intact. The anarcho-communist ideal was largely based on the concept of the peasant village community collectively operating its own agricultural economy minus the external exploitation of the feudal landlords. In nations where the Industrial Revolution had really taken root and the market economy had really begun to expand, such as England or America, anarchists were more likely to idealize the small merchant, craftsman or farmer, hence the individualist character of Anglo-American anarchism.
    This dichotomy between communist and individualist anarchists continues to the present day. If anything, the differences have become even more pronounced. While the anarchists of old often argued fervently over ideological differences (Tucker and Johann Most refused to recognize one another as "true" anarchists), a mutual admiration frequently existed between the communist and individualist camps. Tucker was an admirer of the European anarchists Proudhon and Bakunin and translated their works into English and his anarchist journal, Liberty, published the writings not only of anarcho-socialists but also of outright Fabians or Marxists, such as George Bernard Shaw. Today, the two camps largely disavow one another. Most contemporary free market anarchists think of themselves as "anarcho-capitalists", whereas Tucker regarded himself as a socialist, and most anarcho-socialists of today reject free market anarchists as mere apologists for corporate power.

    Carson ably demonstrates that the division between contemporary anarchists on economic matters need not be as wide as it seems. Like the anarcho-capitalists, Carson favors a genuinely stateless free market. However, he argues effectively that the economic arrangements that an authentic free market economy would likely produce are remarkably similar to those typically advocated by anarcho-socialists. Serious free market economists, such as Rothbard, have long recognized that the corporatist structure of modern "Big Business" rests on state intervention rather than lassez faire. The state creates the fictitious legal infrastructure of corporate "personhood". The state protects and assists corporations by means of limited liability laws, subsidies, government contracts, loans, guarantees, bailouts, purchases of goods, price controls, regulatory privilege, grants of monopolies, protectionist tariffs and trade policies, bankruptcy laws, military intervention to gain access to international markets and protect foreign investments, regulating or prohibiting organized labor activity, eminent domain, discriminatory taxation, ignoring corporate crimes and countless other forms of state-imposed favors and privileges.

    Carson traces the development of modern corporate states all the way back to the late medieval period. In those days, the feudal structure, which originated from the military conquest of traditional agricultural communities and the imposition of an artificial aristocracy of external state-privileged exploiters, was in the process of breaking down. The free cities of the era began to appear as points of light on the broader feudal map. The market economy was growing, innovative technologies were coming into existence and the common people were obtaining more opportunities to claim their rightful status as free individuals. The ruling class was put on the defensive and sought to reestablish itself by fully expropriating traditional peasant lands and militarily conquering the free cities. The dispossessed peasants, no longer having any means of autonomy or self-sufficiency, were forced to migrate towards industrial centers and into the slave-like factory system. The state intervened to make sure that labor discipline was maintained by such methods as severly restricting the freedom of migration and suppressing efforts at self-organization by the laborers. The old feudal elites reinvented themselves as a new industrial capitalist ruling class by means of mercantilist economic policies which tended to concentrate wealth. In early America, for example, it was the northeastern mercantilists consisting of banking, shipping and land magnates led by Alexander Hamilton who initiated the Federalist coup against the libertarian Articles of Confederation and established the centralist presidential state for the purpose of advancing mercantilist commercial interests.

    Carson's central thesis is that "capitalism", defined in the traditional Marxist/socialist/left-anarchist sense of separation of labor from ownership and the subordination of labor to capital, would largely be impossible under genuine free market arrangements. Most Americans are accustomed to thinking of capitalism and free enterprise as being one and the same. This is certainly the perspective taught in the state's educational institutions and promoted by the corporate media. Carson lambasts fake populism of the type promulgated by corporate-sponsored afternoon talk radio which ignores the role of corporations, banks and other elite economic interests in fostering statism and instead works to channel the hostility of the working and middle classes away from the elites for whom most state intervention is actually done and towards the lower classes and the urban poor in a type of "divide and conquer" strategy. According to this ideology, the real enemies of free enterprise and proponents of statism are welfare recipients and the residents of homeless shelters and public housing projects. But it is the ruling class that is the primary beneficiary of state intervention. The primary role of such intervention is to redistribute wealth upward and centralize economic power. The tools used to obtain these objectives are as old as modern corporate states themselves. These tools include the state-imposed money monopoly, patents and subsidies.



    Read on:
    http://www.attackthesystem.com/capitalism.html

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    Re: Capitalism Versus Free Enterprise

    These arguments on what Capitalism is and isn't vex me more than anything else. If it means nothing more than the private ownership of the means of production, and what follows from this, it is a free-market. One thing I value Ayn Rand for, other than her switching of the "ought" of capitalist moral philosophy from "utility maximisation" to "individual survival", is that she utterly demolished the conventional definition of the word, which was maligned with inconsistency, and re-defined it.

    I have no problem with fairness as such, but this implies a standard ; if we are to accept the Marxists's standard, laissez-faire cannot stand on its own feet. If we accept the principle that any state of affairs that arises from truly non-coerced (in positive terms), voluntary arrangements is fair, then the word has meaning to me. The non-aggression axiom and all that it implies, for me, are fairness.

    Now, here is something that confuses me a little. Rothbard outlined a very good principle for appropriation (which can be reinforced by Nozick's arguments on the matter). If Rothbard is indeed correct, what should be done with the property of those who acquired it via State coercion? Surely, many of the title-holders are merely the heirs to it ; should it be taken from them and made available on a free-market? Or should they be allowed to keep it? Without the State one would surmise that their economic power would disintegrate.

    Finally, although I agree with anarcho-capitalism on nearly every level, I wonder how practical is polycentric law that its advocates constantly expound? Monocentric anarcho-capitalism (i.e. "minarchism", as advocated by Rand) would seem far more viable to me.

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    Re: Capitalism Versus Free Enterprise

    a very interesting article

    to be blunt about how it got me thinking, I will say that I have critizisms toward free enterprise, Capitalism and Marxism alike

    Statistic federalism, the means to global conformity and morality( nasty tyranny we could all do without) helps its tyrannical grip with free trade treaties, statist monopolies, and with marxist-progressivism's help also uses welfare and state intervention to create nanny states

    in such a disorderly monopolized system(free market) where the prices and wealth of everything is decided by the masses and in cases of free trade on a global scale(and in the case of enron, a system easily manipulated)

    such a system will eventually collapse and eat away at itself and be replaced with a better alternative to all three

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    for those unfamiliar with the reference

    Quote Originally Posted by SineNomine
    One thing I value Ayn Rand for, other than her switching of the "ought" of capitalist moral philosophy from "utility maximisation" to "individual survival", is that she utterly demolished the conventional definition of the word, which was maligned with inconsistency, and re-defined it.

    I have no problem with fairness as such, but this implies a standard ; if we are to accept the Marxists's standard, laissez-faire cannot stand on its own feet. If we accept the principle that any state of affairs that arises from truly non-coerced (in positive terms), voluntary arrangements is fair, then the word has meaning to me. The non-aggression axiom and all that it implies, for me, are fairness.
    http://www.aynrand.org/site/PageServ...ism_essentials

    http://www.aynrand.org/site/PageServ...jectivism_pobs

    http://objectivism101.com/IOP/Chart.html

    http://wiki.objectivismonline.net/wiki/Main_Page

    http://objectivism101.com/

    http://www.objectivistcenter.org/cth...jectivism.aspx

    http://www.objectivistcenter.org/ct-1330-Questions_FAQ.aspx

    http://en.wikipedia.org/wiki/Objectivism_%28Ayn_Rand%29

    http://www.objectivism.net/order_cdrom.htm

    here is the economics text-book
    that i helped proof-read
    for my professor
    (he was one of miss rand's closest associates).


    Will Durant
    "How many a debate would have been deflated into a paragraph
    if the disputants had dared to define their terms."
    http://www.willdurant.com/articles.htm

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    Re: Capitalism Versus Free Enterprise

    Quote Originally Posted by SineNomine View Post
    Now, here is something that confuses me a little. Rothbard outlined a very good principle for appropriation (which can be reinforced by Nozick's arguments on the matter). If Rothbard is indeed correct, what should be done with the property of those who acquired it via State coercion? Surely, many of the title-holders are merely the heirs to it ; should it be taken from them and made available on a free-market? Or should they be allowed to keep it? Without the State one would surmise that their economic power would disintegrate.
    Rothbard applied the home-steading principle to state-held land, to support all attempts to return state-held property to private hands.

    Abolishing government ownership of assets puts them implicitly into an unowned status, thus ready to be homesteaded and converted into private ownership. Therefore the workers in a state weapons factory homestead and own the factory, the teachers & staff own the school, and so on.

    If a record of ownership exists then an attempt must be made to restore that property to the original pre-confiscation owner, or their heir.

    Walter Block goes further, he has the descendants of black slaves holding a legitimate claim upon the property of where their forefathers worked, as their labour was "stolen" from them, so the descendant of a black slave would be allowed to pursue a case against the descendant of a white slave owner.

    In my opinion, this is problematic.


    Finally, although I agree with anarcho-capitalism on nearly every level, I wonder how practical is polycentric law that its advocates constantly expound? Monocentric anarcho-capitalism (i.e. "minarchism", as advocated by Rand) would seem far more viable to me.
    Hoppe/Rothbard may respond along the lines of, the law will be a "Natural Law", based around property rights, restitution and non-aggression, from the universality of those natural rights, the law is derived and is not man-made.

    I think the difference between anarcho-capitalism/minarchism is over-stated, conceivably a private landowner under free market capitalism could own an area of land the size of Belgium and rule as he sees fit, in essence as a king, with his own law code. Co-existing near to smaller parcels of land owned/operated by multi-national businesses, syndicalist communes, primivitist-green communes, privately-owned racial communes (f.e., English only, no Germans/Finns/Blacks, etc), as well as small states/territories we have today such as Hong Kong, Monaco, places like Wales would likely stay whole.

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    Re: Capitalism Versus Free Enterprise

    Quote Originally Posted by sheriff skullface View Post
    in such a disorderly monopolized system(free market) where the prices and wealth of everything is decided by the masses and in cases of free trade on a global scale(and in the case of enron, a system easily manipulated)
    such a system will eventually collapse and eat away at itself and be replaced with a better alternative to all three
    You see, here is the problem. It is ultimately the masses that must benefit from goods. However, this is a slight delusion - goods are almost always created first for the wealthy elite, and if the elite takes to them they are mass-produced for the public at large, provided there is a profit in so doing (demand is not at all easy to calculate, even with intricate mathematic formulae, as it is wholly subjective). This allows initially expensive goods to eventually become available en-masse (e.g. automobile). Now when you put some agency from above in control of prices, and abolish the free-market, you get nonsense results such as the USSR, precisely because the free-market is the only true means of cost-calculation. It is most efficient at what it does. Complexity is not an argument in favour of regulation - the opposite. Primitive societies are much easier to control than modern-day civilisations. So were I to be unprincipled, I'd say follow the example of many monarchs and establish a laissez-faire dictatorship (not fascism). Your concerns are most likely racial ; a Monarch is a private property owner of sorts, and therefore may exclude negative elements from his realm.

    Also, as the article Josef posted states, large corporations such as Enron would likely suffer massive catastrophe subject to a complete abolition of government aid and fiat. Needless to say there will be powerful firms, but most likely regional as opposed to multinational, and usually efficient as opposed to bloated.

    Quote Originally Posted by OneFrenchSaxon View Post
    Walter Block goes further, he has the descendants of black slaves holding a legitimate claim upon the property of where their forefathers worked, as their labour was "stolen" from them, so the descendant of a black slave would be allowed to pursue a case against the descendant of a white slave owner.
    In my opinion, this is problematic.
    It might be necessary though - give the blacks their share, and from there on disassociate completely. I raised this question because I am curious as to what Rothbard & co. think should be done to businesses whose wealth is State-derived. Many of them will crumble without State-aid, but to insure they do not threaten a laissez-faire anarchism I would say it is best they are slowly done away with (perhaps through a brief period of ultraminimal minarchism). Their profits are illegitimate.

    Hoppe/Rothbard may respond along the lines of, the law will be a "Natural Law", based around property rights, restitution and non-aggression, from the universality of those natural rights, the law is derived and is not man-made.
    Something along the line that that the law is natural in that it derives from man's nature qua man, and therefore uses an ought-justification similar to Rand's Objectivism (ie an individual's survival being the only proper rational end of any system)?

    I think the difference between anarcho-capitalism/minarchism is over-stated, conceivably a private landowner under free market capitalism could own an area of land the size of Belgium and rule as he sees fit, in essence as a king, with his own law code. Co-existing near to smaller parcels of land owned/operated by multi-national businesses, syndicalist communes, primivitist-green communes, privately-owned racial communes (f.e., English only, no Germans/Finns/Blacks, etc), as well as small states/territories we have today such as Hong Kong, Monaco, places like Wales would likely stay whole.
    As far as I see it, the difference between minarchism and anarcho-capitalism is nothing but one of monocentric and polycentric law respectively. If minarchism allows voluntariness, it is essentially nothing but a monocentric variant of anarcho-capitalism. Rand would argue that the system would cover everyone, even if voluntary, due to a mechanism similar to price-discrimination.

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