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Source link: http://archive.mises.org/5219/mutualisms-support-for-the-exploitation-of-labor-and-state-coercion/

Mutualism’s Support for the Exploitation of Labor and State Coercion

June 23, 2006 by

Mutualism claims to oppose the exploitation of labor, i.e., the theft of any part of its product. But when it comes to labor that has been mixed with land, it turns a blind eye and comes out foursquare on the side of the exploiter.

Thus, to elaborate on the case I presented in my last post, “Mutualism: A Philosophy for Thieves,” let us imagine that our legitimate land owner—legitimate even by Carson’s standards—has spent several years clearing or draining his land, pulling out stumps, removing rocks and boulders, digging a well, building a barn and a house, and putting up fences to keep in his livestock. It is this land that he agrees to rent to a tenant, or, what is not too different, sell on a thirty-year mortgage, which he himself will carry, on the understanding that every year for thirty years he will receive a payment of interest and principal.
The tenant or mortgagee signs a contractual agreement promising to pay rent, or interest and principal, and takes possession of the property. Being a secret mutualist, however, he thereupon proclaims that the property is now his, on the basis of the mutualist doctrine that, in Carson’s words, “occupancy and use is the only legitimate standard for establishing ownership of land.”

This is a clear theft not only of the land, but also of the product of labor. A worker has toiled for years and is now arbitrarily deprived of the benefit of his labor, and this in the name of the protection of the rights of workers!

Mutualists cannot help but be uncomfortable with cases of this kind. And because of this, they don’t mention them. Instead, they assert that land is unique, because it is not the product of labor. But in all cases of this kind, which are so common as actually to be the norm, major features of the land clearly are the product of labor.

After he has been robbed, mutualists tell the worker to be content with getting the thief’s moveable property, but not “his” real estate. Well, farmhouses, barns, wells, and the improvements in the ground itself that are products of labor, are not moveable. And yet they are just as much the product of labor as any manufactured product. And the worker who created them has the only legitimate claim to them in these circumstances.

The mutualist fraudster who has violated his contract is clearly a vicious exploiter of labor. And Mutualism is on his side.

Mutualists pretend that there will be communities in which such behavior is accepted and routine, and chide opponents for their lack of knowledge of anthropology for not understanding this. They do not care to admit that the only thing which can enforce such a practice is the threat of physical force against those who would put an end to it, i.e., for all practical purposes, the existence of some form of tyrannical state. Yes, mutualists are “anarchists” who turn out to be statists!

It is possible to see why this must be so by starting with a condition in which there is no government. In this state of affairs, our exploited worker-victim easily proves to his neighbors that a “lying, thieving mutualist” has stolen his land and deprived him of the benefit of years of work. If his neighbors have neither been lobotomized nor castrated, they will probably contemplate lynching this “mutualist.” In any case, they proceed with our victim to his land and are ready forcibly to evict the “mutualist.” What will stop them from doing so and thus putting an end to any practice of Mutualism’s depraved concept of “property rights”?

The only thing that will stop them is the threat or actuality of greater force exerted by mutualists, i.e., by a mutualist armed gang. If the mutualist gang has its way, it constitutes a de facto mutualist state, which must continue in existence indefinitely in order to uphold the mutualist concept of “property rights.”

Mutualism thus ends in nothing more than a state dedicated to the violation of property rights.

And, of course, it is worth pointing out that there is nothing genuinely “mutual” about “Mutualism.” It is a system designed to protect thieves, who gain at the expense of victims, who lose. Mutuality of gains requires the enforcement of voluntary contracts. It requires that the tenant or mortgagee pay the landowner or mortgagor what he has promised to pay. He gains, and only by honoring his contract can the other party gain too. Abiding by contractual agreements can legitimately be called “mutualism.” In contrast, the doctrine of “Mutualism” is a self-desecration.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site www.capitalism.net is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

{ 24 comments }

Wild Pegasus June 23, 2006 at 4:39 pm

The contract is void because the purchaser did not bargain in good faith.

- Josh

Kevin Carson June 24, 2006 at 12:37 am
Dan June 24, 2006 at 1:32 am

Kevin,

“But any system of property rules requires a majority consensus of people willing to enforce each other’s rights under that system”

True, but which set of rules are more in tune with man’s nature, e.g. which would man be more naturally inclined to accept?

I think maybe you give too much credence to some idea that people are feeble sheep, and that we have nothing to do with this rent system at all. You mistakenly think that man stands by haplessly as the “exploitive” system of rents continues because of the state while avoiding the possibility that people currently accept it as a rightful form of contract and if no system at all were in place, they would by nature accept it over the mutualist rent-is-theft system.

The case is not irrelevant, and it deserves a more straightforward response than a sort of “I’m going to avoid the question with a fallacy by concentrating solely on your fallacy and ignoring the question” answer.

In your eyes, who has been stolen from here? The man who labored on the property, and then lost such labor through his ill-conceived rent/mortgage plan? Or the mutualist who by your standards has rightfully appropriated the property by use regardless of any rental/mortgage contracts agreed upon?

Kevin Carson June 24, 2006 at 1:54 am

Dan,

As a matter of fact, I’ve argued in the past that any post-state system is likely to be a panarchy of local property rights systems, and that there’s no reason they can’t coexist peacefully. In sparsely settled areas the default system is likely to be occupancy-and-use just because the cost of keeping squatters off vacant land is likely to be greater than any potential returns on the land. But I don’t doubt that the local consensus on the rules of the game will vary from one settled community to another.

I started out, when I began researching Mutualist Political Economy, from a simple Ingalls-Tucker position that occupancy-and-use tenure was the self-evidently right set of rules for private property, and that Lockean rules were an imposition of “law-made” property on “labor-made” property (as Nock put it). But in the process of researching the section on land issues in the book, I became a lot less dogmatic and began to stress the areas of commonality between radical Lockeans like Rothbard and followers of the Ingalls-Tucker doctrine like myself. I was heavily influenced by “Hogeye” Bill Orton’s argument that no specific set of property rules could be logically deduced from the axiom of self-ownership, and that all required some conventional template of rules within which the principle of self-ownership could operate. I decided, in the process, that rival systems of property rules, including mutualist, could only be argued on consequentialist grounds.

But Reisman’s example I can’t help but consider irrelevant, because it starts from such an implausible set of assumptions. I don’t think the case would ever arise in a community where the majority of people accepted mutualist rules as normal and local juries enforced those rules.

I *do* consider the South Central Farmers case to be important, on the contrary, because their rights are arguably being violated under the terms of the *Lockean* system of rules, without any need to recur to an outside set of rules like mutualism. If it were an ordinary case of a landlord evicting tenant farmers, as much of a violation of mutualist standards as I’d consider it to be, I still wouldn’t have bothered blogging about it because it would be such a dog-bites-man story.

quasibill June 24, 2006 at 7:55 am

“True, but which set of rules are more in tune with man’s nature, e.g. which would man be more naturally inclined to accept?”

Well, and I’m sure this was the reference in Resiman’s sneer at anthropology, there ARE examples in history of non-Lockean property systems in realty. Very stable ones, at that. So those who argue that Hoppe’s vision of property rights in realty is the only one that could arise naturally have a steep hill to climb. Furthermore, it is more of a Randian argument than an Austrian one – that there is some objective value system common to all people, in all places, at all times. The larger you try to make such a value system (the more aspects of life you try to encompass) the more you talk like an objectivist, and the less you talk like an Austrian believer in subjective value.

Heck, the common law was very close to free market law, and it’s not the Hoppeian/Randian system of absolute contract/private property enforcement. That in itself should give pause to Reisman and his cohorts. But you can never question the faith of fundamentalist true believers. If you do, they just call you evil, or a criminal, or a Marxist.

TGGP June 24, 2006 at 8:59 am

Kevin, I’ll agree that George has been almost deliberately obtuse in the past, but you’re avoiding the issue. You keep saying that the community should establish what is right. What kind of stance is that for an advocate of a system? Shouldn’t you be explaining WHY the community should prefer mutualism in situations like this? Let’s imagine that the “community” never really established if they are Rand or Proudhon fans. The man who rented out his land is complaining to you about what just happened and saying he plans on driving that no good varmint off his land. Would you tell him that the contract he agreed to shouldn’t be allowed in the first place? Would you say that the deceit on the part of his tenant was justified? Keep in mind that you could play a pivotal role in the evolution of this community. I don’t know about you, but I wouldn’t be able to judge contracts I wasn’t involved in as long as I thought no coercion was used in its creation, and I hold people to their words as liars and thieves even if the law declares their deal invalid. If a drug dealer receives a shipment from his supplier on the condition that he repay it by some certain time and he does not fulfill his end of the bargain, to me he is a thief whose actions will result in bloodshed, regardless of the fact that drugs are illegal.

Shawn P. Wilbur June 24, 2006 at 10:16 am

TGGP,

Mutualists aren’t likely to respond directly to Reisman’s example, because we’re generally pretty supportive of individual contracts. Reisman appears convinced that mutualist are all of the “lying, thieving” variety (and “statists,” etc…), but it strikes me that what he is describing is simply theft (by his terms) or at least breach of contract (by terms I’m guessing most mutualists would accept.) It’s not mutualism. It’s not what you’ll find promoted in the work Proudhon, Greene, Warren, Tucker, Ingalls, Carson, or any mutualist I know. Carson’s notion of a “panarchy” of economic solutions is one widely held, even in “social anarchist” circles. When social anarchists (such as the authors of An Anarchist FAQ criticize mutualists, it is generally because they don’t believe mutualism would be sustainable. I’m guessing both you and I might have similar suspicions about anarchist communism. But this is a very different set of issues than this “philosophy of thieves” business, which never manages to touch the substantive differences between the various market anarchist approaches.

geoist June 24, 2006 at 12:09 pm

In economics, “land” refers specifically to geographical location, not to improvements (More generally, it refers to any natural resource which is in inherently fixed supply, including EM spectrum, etc.). The tenant still has to pay rent for the improvements; in practice, the landlord can either sell the improvements to him or post a surety that he’s going to demolish them, with tenant paying their depreciated value.

Mutualism is basically Georgism without rent collection.

TGGP June 24, 2006 at 2:34 pm

Shawn, if mutualists accept all voluntary contracts, what is the difference between them an anarcho-capitalists? Do they just suspect that once anarchy is in place no one will want to charge rent or interest or take wages, or that no one will be able to because capital will not be amassed on such a large scale? From my reading of both Carson’s posts and the responses of others, some kinds of contracts will be considered invalid under mutualism. As an advocate of mutualism I would expect Carson to explain why the example should not be considered theft, rather than just saying that Lockeans will decide one way and Mutualists another.

Jacob June 24, 2006 at 3:09 pm

Even Lockean communities might consider use/possession when judging disputed ownership of land, structures, and artifacts alike.

For many things, the original work will deteriorate with time. The successive users/possessors may maintain, improve, or protect the land, structures, or artifacts in question. (With historical and archaeological remains, classical ‘improvement’ would not apply, but curation, cataloguing and research would take their place). The original creator’s share depreciates with time, and the successive users’ share (usually) accumulates with time.

In addition, it’s easier to identify recent users than sufficiently ancient owners. Since most latifundia derive from older theft, favoring possession (by squatters) over title (by latifundists) tends to compensate for the older theft.

Special circumstances may always apply.

Shawn P. Wilbur June 24, 2006 at 3:13 pm

TGGP,

Since neither “mutualist” nor “anarcho-capitalist” are used in entirely consistent ways, sometimes there is little or no difference, beyond the relationships individuals have with the various anarchist/libertarian traditions. These most recent debates seem to be largely driven by the opposition of market libertarians on the an-cap side, who accept Hoppe’s a priori derivation of property rights, and thus believe there is only one theory of property that can work, and market libertarians on the mutualist side, who either believe that there are multiple adequate systems or that there are no ultimately adequate systems, and that property norms are going to have to be worked out, at least to some degree, locally. I know the second position sounds messy and inefficient to those who have convinced themselves of the first position, but there is an honest, reasoned difference of opinion here, and the different working hypotheses about property rights color the ways we all approach the question. The major difference in these debates is one of preference. Mutualists believe that there will certainly be some individuals interested in living in communities free from all those things we used to call “usury.” We know that we, at least, desire this. There are probably also differences in our basic understandings of things like the nature of human agency, the adequacy of “self-ownership” as a concept, etc. I’m probably about 180 degrees from Hoppe on many of these issues, but still espouse anarchism and the free market. Part of what seems to be going on here is that folks like Reisman don’t believe that the positions that Carson or I hold can be held consistently (and, of course, they probably couldn’t if the premises were, say, Hoppe’s premises), but rather than simply saying, “Mutualists have a system that doesn’t hold up,” all sorts of covert, evil aims and motives are attributed.

To answer the example as directly as possible (though I speak only for myself): it is quite possible that by “occupancy and use” standards mutualist communities might or might not consider Reisman’s example one of theft, but it is pretty certain that they would consider it a breach of contract, as long as there was no “force or fraud” involved. The situation is unlikely to rise as a natural outcome of mutualism (which seems to be Reisman’s contention) because property standards would be common knowledge, because mutualists honor both voluntary contracts and the right to be “wrong” by community standards, and because force and fraud are explicitly no-nos for pretty much every variety of anarchism.

Paul Edwards June 24, 2006 at 7:38 pm

Kevin,

“I was heavily influenced by “Hogeye” Bill Orton’s argument that no specific set of property rules could be logically deduced from the axiom of self-ownership, and that all required some conventional template of rules within which the principle of self-ownership could operate. I decided, in the process, that rival systems of property rules, including mutualist, could only be argued on consequentialist grounds.”

I have been mulling over the mutualist’s references to the “axiom of self-ownership”, and how it does not appear to the mutualist, to lead us to any logical singular conclusion regarding the necessity of any other particular private property concepts.

The problem, in my opinion, is you have malformed the question to the point of asking the wrong question entirely, making the answer you arrive at unsuitable for any theoretical or practical purposes. Political philosophy, ethics, and the pursuit of ethical norms is NOT at all, at root, a struggle to deduce from the axiom of self-ownership, a set of property rules. Formulating the question this way is a tangential distraction.

The goal we are seeking to achieve is this: recognizing the fact of scarcity in valuable means which humans will come into violent physical conflict over due to a desire to control these means exclusively, what norms can we justifiable establish which can make conflict avoidance possible. How can we establish with consistency, priority in a right to exclusive control over any given resource of one person over another?

That is the question. The acknowledgement of self-ownership is only part of the answer to this question. The anarcho-libertarian ethic has been proven to be the exclusive answer to this problem. Through self-ownership, acknowledgement of original appropriation of previously unowned resources as a means of obtaining ownership, acknowledgement of rights to exclusive control over such appropriated resources, (which is private property ownership), and rights of contract by private property owners, together provide a set of norms for people to objectively link imbordered resources to themselves to demonstrate a priority right to exclusive control over these resources, over ANY late-comer. I stress any latecomer, including someone who has a different idea of what constitutes property ownership. This ensures the possibility of conflict avoidance. It’s pretty straight forward.

No other norms achieve the possibility of conflict avoidance, and therefore, all other norms encourage conflict. Covenants and contracts can be used to tune a community to the specific values of the individuals, but it is necessary they be derived from the root of the libertarian ethic.

Kevin Carson June 25, 2006 at 12:59 pm

TGGP,

Well, as I tried to point out above, my advocacy for mutualist property ownership has shifted from absolutist to consequentialist grounds over the past several years. I say that “the community should establish what is right” in the sense that any property rights system depends to a large degree on convention. But I still advocate mutualist property rules on the grounds that they tend to promote certain ethical values better than competing property systems.

For example, I believe it deals most adequately with the ethical problems attending the fact that the supply of land is fixed, or at best very, very inelastic. Given the fact that “they ain’t making any more of it,” it’s best that the largest proportion of people possible have access to vacant land. It’s also good, for cultural reasons, that the largest proportion of people possible have access to the economic independence and security that comes from the small ownership of property.

I also concede that the strict application of Lockean rules would go a significant way in promoting these same values, although not as far as the Ingalls-Tucker doctrine. Most vacant land under the present system, arguably, was never homesteaded by labor and derives entirely from state grants of title. So consistently applying Lockean rules to the present system would be a big step in the right direction.

And, as Shawn Wilbur points out above, it’s a matter of community preference. The closest thing I can see as a governing principle of post-state society is a meta-agreement to live and let live. I can’t imagine any particular anti-state ideology gaining hegemony in the period leading up to the collapse of state capitalism.

On the issue of repugnant contracts, would you enforce a contract by which someone sold himself into slavery, if no coercion were involved in making it?

Jacob,

Latifundia are one example of how even strict application of Lockean standards would have revolutionary implications. It might also be possible to apply Lockean standards to some of the non-western property systems quasibill refers to: e.g. collective homesteading of hunting grounds, as a common, by the semi-nomadic tribes using them. And in any system, Lockean included, a jury decision would be an ad hoc application of general principles to the case at hand, aimed at producing the least unjust outcome in hard cases; it’s hard to see how possession wouldn’t come into consideration.

And even in the event that a community bases its property law on the Ingalls-Tucker doctrine, the implementation will involve a lot of convention and seeming arbitrariness–exactly the same as the Lockean system does now.

Paul Edwards,

You seem to be addressing the evaluation of contending property rules systems from a consequentialist perspective yourself, rather than deriving them from any moral axiom. I would argue that any property system (or a good many, anyway) can promote peace and stability, and solve the problem of scarce resources, if it is applied consistently and operates with a reasonable degree of predictability. The main necessity, for maintaining peace and stability, is recognition of a common set of norms for allocating property in the event of a dispute. I would also argue that markets can arise in virtually any property system (even syndicalist or libertarian communist, although I don’t favor them), given the agreement on a set of property rules prior to exchange.

TGGP June 25, 2006 at 1:13 pm

Kevin, I’m a consequentialist myself, so I don’t hold that against you. On the issue of repugnant contracts, like I said earlier I agree with Walter Block except over the issue of moral responsibility. So yes, I WOULD enforce contracts in which people sold themselves into slavery.

Paul Edwards June 25, 2006 at 4:44 pm

Kevin,

“You seem to be addressing the evaluation of contending property rules systems from a consequentialist perspective yourself, rather than deriving them from any moral axiom.”

I don’t see how you come to this conclusion. I pointed out two things. Before one can arrive at an answer to a question, one must recognize the question. And secondly, you have failed to recognize the question.

“I would argue that any property system (or a good many, anyway) can promote peace and stability, and solve the problem of scarce resources, if it is applied consistently and operates with a reasonable degree of predictability.”

What I am saying is firstly, the question must be framed in this way, before we can decide if you are correct or not. It cannot be framed in some abstract and irrelevant form as you have such as “how do we derive private property rights from the axiom of self-ownership?”

“The main necessity, for maintaining peace and stability, is recognition of a common set of norms for allocating property in the event of a dispute.”

There is more required than that. These norms must be universalizable, and justifiable; not just recognized by the majority, but justifiable even from the perspective of members of a minority.

“I would also argue that markets can arise in virtually any property system (even syndicalist or libertarian communist, although I don’t favor them), given the agreement on a set of property rules prior to exchange.”

Sure, markets (black markets that is) can arise literally in any system, even under a repressive totalitarian Stalinist regime. But this is not to say that these systems all encourage markets equally. Nor are they able to nor intended to. Nor are these systems equally justified unless undertaken voluntarily under the anarcho-libertarian ethic that I am advocating.

Kevin Carson June 26, 2006 at 12:00 am

Paul,

Your standard of universalizability sounds, to me at least, something like being logically deducible from some moral axiom. So I guess I my calling you a consequentialist was a misreading. In fact, the idea that some single property rights system is universally valid based on human nature sounds like a natural law-based system. Not that I have any problems with ethical systems grounded in natural law. I just don’t think a specific property rights system can be justified that way.

To get back to what quasibill was saying, non-Lockean systems seem to have arisen spontaneously in a lot of cultures, and persisted with a high degree of stability. For example, the village communism that seems to date back to the early neolithic in much of the world, that survived into modern times in the form of the European open field system and the Russian mir. They were generally destabilized or stamped out from above, not by problems from within. Arguably, the state overlay a preexisting natural order, in the cases of manorialism over the open field system, Tsarist autocracy over the mir, and the “Asiatic mode” over Indian village communes. And the enclosures, Stolypin, and the British colonial authorities are what destroyed them, respectively.

When I say a market is compatible with any preexisting property system, I don’t mean a black market, but rather an open market operating with the customary allocation of property rights accepted as a given.

Paul Edwards June 26, 2006 at 1:34 am

Hi Carson,

I am not certain how important this aspect of our discussion is to you in terms of your mutualist thesis, but since we have been discussing it, and I think your position is mistaken, I’ll elaborate further:

In your post prior to your last you mentioned:

“I would also argue that markets can arise in virtually any property system (even syndicalist or libertarian communist, although I don’t favor them), given the agreement on a set of property rules prior to exchange.”

Followed by the following in your last post:

“When I say a market is compatible with any preexisting property system, I don’t mean a black market, but rather an open market operating with the customary allocation of property rights accepted as a given.”

I want to focus on what Mises had to say with which I agree, on the realities, in particular, of the syndicalist ideals, that you suggest are compatible with a free market for instance:

Mises on syndicalism (Human Action):

On the summation of the syndicalist ideal: “Eliminate the idle parasites, the entrepreneurs and capitalists, and give their “unearned incomes” to the workers! Nothing could be simpler.”

On the intellectual credibility of the philosophy: “…one cannot take the syndicalist program seriously, and nobody ever has. Nobody has been so confused and injudicious as to advocate syndicalism openly as a social system.”

On correcting the fallacy behind the syndicalist ideal: “The entrepreneurs and capitalists are not irresponsible autocrats. They are unconditionally subject to the sovereignty of the consumers.”

How the syndicalist misapprehends the facts of economics: “Thus the syndicalist ignores the essential problems of entrepreneurship: providing the capital for new industries and the expansion of already existing industries, restricting branches for the products demand for which drops, technological improvement.”

On the immorality behind the syndicalist idea: “It is not unfair to call syndicalism the economic philosophy of short-sighted people, of those adamant conservatives who look askance upon any innovation and are so blinded by envy that they call down curses upon those who provide them with more, better, and cheaper products. They are like patients who grudge the doctor his success in curing them of a malady.”

His ultimate judgement of the economic viability of syndicalism: “There cannot be any question of realizing the syndicalist ideal according to which the proceeds of an enterprise should completely go to the employees and nothing should be left for interest on the capital invested and profits. If one wants to abolish what is called “unearned income,” one must adopt socialism.”

The implementation of syndicalism requires the adoption of socialism. Socialism requires a state and the abolition of the market (ergo black markets) and elimination of property in the means of production. It turns out that fewer ethics than we might have thought, are compatible with free markets.

Paul Edwards June 26, 2006 at 1:35 am

(Dummy moi: I meant to address you as Kevin! Sorry)

quasibill June 26, 2006 at 7:26 am

Paul,

Before I can respond to your last post, I’d need to know what you define as syndicalism – I have a feeling it’s a loaded term.

As an aside, it seems to me that Carson’s view of history meshes better with Austrian thought, while Edwards’s is more Chicagoan. Carson looks at the common property, as recognized in the pre-existing societies, and declares that it should have been respected, and not violated by aggression (via the state). Edwards’s necessary implication is that as long as someone ended up with private property rights after the transaction, the initial allocation of rights was irrelevant.

Paul Edwards June 26, 2006 at 12:00 pm

Quasibill,

“I’d need to know what you define as syndicalism – I have a feeling it’s a loaded term.”

Most of my post consists of excerpts from Mises’s “Human Action” where he describes syndicalism in brilliant and living colors. It is this Misesian definition which is my understanding of syndicalism.

http://mises.org/humanaction/pdf/HumanActionScholars.pdf

“it seems to me that Carson’s view of history meshes better with Austrian thought, while Edwards’s is more Chicagoan.”

My position is based more on praxeology than history. While I recognize that non-libertarian cultures have existed and persisted with their coercive and despotic states for a long time, my focus is on what ethic is justified, and what economic view is most correct. These issues must be dealt with on a theoretical basis, while realizing that in praxeological questions, what is correct in theory is also correct in practice.

“Carson looks at the common property, as recognized in the pre-existing societies, and declares that it should have been respected, and not violated by aggression (via the state). Edwards’s necessary implication is that as long as someone ended up with private property rights after the transaction, the initial allocation of rights was irrelevant.”

I don’t see how you can attribute to me holding a Chicagoan rather than an Austrian ethic. The only norms I advocate are the Austrian/libertarian ones of homesteading, self-ownership, private property ownership, and contract. The homesteading principle combined with voluntary contract stipulates the only manner in which resources can rightfully come under the exclusive control (become property) of an individual. Under this ethic, there is no opening available for any form of late-coming decree speaking would-be confiscators of previously owned property. This is hardly a Chicagoan view which holds that there can be other considerations over first use and contract which can dictate ownership.

Kevin Carson June 26, 2006 at 1:31 pm

Paul,

In dealing with Mises’ statements on syndicalism, I have to start out by rejecting his terminology. First of all, syndicalism is just another variety of socialism. And second, Mises was buying into a severe distortion of the term “socialism” by Engels and the other state socialists. I don’t share Mises’ (and your) description of socialism as something that requires a state.

It’s worth pointing out that even Engels treated state ownership and planning as only necessary, and not sufficient, conditions of socialism. The central defining characteristic of socialism was the political and economic power of the workers themselves. So (as he argued in Anti-Duhring) nationalization of large parts of the economy *might* be a step toward socialism, *if* the state and the nationalized industry were later seized by the working class. But such nationalization was likely to be actually carried out by the capitalist class, acting through the state, to achieve the stability and predictability and assured profit that Gabriel Kolko described as “political capitalism.”

Engels himself, though, distorted “socialism” a great deal from the original understanding of the term.

The original socialist movement certainly included some statist subcurrents, like St.Simonism. But it also included the market-oriented “Ricardian socialism” of Thomas Hodgskin (a mentor of Herbert Spencer) and voluntaryists like Josiah Warren, and a whole host of other strands emphasizing markets and cooperatives. Check out Benjamin Tucker’s “State Socialism and Anarchism” for a comparison of the statist and free market strands of socialism from an American individualist perspective.

On Mises’ substantive comments, I’m not sure what he means by saying no one ever has taken syndicalism seriously. The CGT and CNT certainly seem to have done so, in my opinion.

On the role of entrepreneurs and their being subject to consumer sovereignty, my impression of such arguments in Human Action was that Mises took a rather schematized and ahistoric view of things. For example, his view of entrepreneurship seems to be an abstract construct in which ownership and strategic decisionmaking are concentrated in a unitary actor, without any significant problems of bounded rationality or opportunism. In real world capitalism, on the other hand, things like the separation of ownership from control and the corporate form have distorted things almost beyond recognition from Mises’ abstract analysis.

For over a hundred years, since the corporate transformation of the economy and the cartelization of most industries into oligopoly markets, the effect of state intervention has been to significantly reduce the competitive disadvantage of inefficiency and along with it the market incentive toward entrepreneurship.

I don’t dispute the importance of entrepreneurship. I doubt whether most syndicalists have conceptualized it in these explicit terms, but I think their actual critique of the present system was that owners of large concentrations of wealth were able to derive rentier incomes without any significant entrepreneurship, and that managerial elites ran corporations as bureaucracies without the need for much entrepreneurship themselves. To the extent that they did exercise entrepreneurship, their innovations were an anemic shadow of those that would be carried out under worker self-management.

I doubt that the syndicalists would put it this way themselves, either, but the ideal system for entrepreneurship is one in which the organization of production, product development, and analysis of market feedback are united in the same people. Tom Peters has advocated cross-disciplinary, self-directed teams as a way of achieving this, with R&D people working directly with workers on the shop floor to reduce turnaround time. But what Peters advocates is essentially an artificial simulation, within the corporate environment, of what would naturally exist in a market economy of small worker cooperatives.

The ideal, from the perspective of reducing moral hazard and bounded rationality, and promoting innovation, is an enterprise in which decision-making power is combined with direct knowledge of the production process: where the transaction costs of aggregating “idiosyncratic knowledge” (as Hayek put it) are minimized, and positive and negative incentives are internalized in the same actors. Barry Stein argued in Size, Efficiency, and Community Enterprise that the greatest improvements to the production process came not from qualitative leaps, but from incremental improvements; and that the best ideas for such incremental improvements came from those directly engaged in the process. And numerous studies on the history of major inventions have shown that most of them came from individual tinkerers or from small “skunk works.” Under a corporate hierarchy, those engaged in the production process are completely divorced from the authority to put their ideas into effect without going through a dozen layers of bureaucracy, but they interalize none of the productivity gains from them when they *are* put into effect.

Paul Edwards June 26, 2006 at 3:08 pm

Kevin,

“In dealing with Mises’ statements on syndicalism, I have to start out by rejecting his terminology. First of all, syndicalism is just another variety of socialism.”

Actually, Mises concluded exactly as you: syndicalism is socialism.

“And second, Mises was buying into a severe distortion of the term “socialism” by Engels and the other state socialists. I don’t share Mises’ (and your) description of socialism as something that requires a state.”

That’s fair enough, but the problem is your definition of socialism is so at variance with its common definition, that it seems certain to add confusion to any discussion.

“It’s worth pointing out that even Engels treated state ownership and planning as only necessary, and not sufficient, conditions of socialism.”

I think Mises agreed that state ownership and planning are necessary conditions of socialism.

“The central defining characteristic of socialism was the political and economic power of the workers themselves.”

It is political power that concerns us. It puts in the hands of one special interest such as “the workers” unjustifiable power over other groups such as capitalists and property owners. It is what leads to unethical property violations, conflict and ultimately poverty.

“So (as he argued in Anti-Duhring) nationalization of large parts of the economy *might* be a step toward socialism, *if* the state and the nationalized industry were later seized by the working class. But such nationalization was likely to be actually carried out by the capitalist class, acting through the state, to achieve the stability and predictability and assured profit that Gabriel Kolko described as “political capitalism.”"

Regardless of which special interest is at the helm, we are talking about an unethical confiscation of property by what will always amount to an oligarchy of political power.

“Engels himself, though, distorted “socialism” a great deal from the original understanding of the term.

“The original socialist movement certainly included some statist subcurrents, like St.Simonism. But it also included the market-oriented “Ricardian socialism” of Thomas Hodgskin (a mentor of Herbert Spencer) and voluntaryists like Josiah Warren, and a whole host of other strands emphasizing markets and cooperatives. Check out Benjamin Tucker’s “State Socialism and Anarchism” for a comparison of the statist and free market strands of socialism from an American individualist perspective.”

The problem I have with the individualist anarchists is their economics is weak, leading them to promote unviable economic systems under anarchy. This is the problem the A-C camp has with other anarchists in general. They neglect economic realities. That human nature is such that without coercion, only a capitalistic or at least a free market economy can and will emerge under complete freedom. These other economies essentially require a coercive state to implement and maintain in the long run.

“On Mises’ substantive comments, I’m not sure what he means by saying no one ever has taken syndicalism seriously. The CGT and CNT certainly seem to have done so, in my opinion.”

I thought it was interesting comment, too. What I think he meant was that no one who had a respectable grip on the subject of economics has taken syndicalism seriously.

“On the role of entrepreneurs and their being subject to consumer sovereignty, my impression of such arguments in Human Action was that Mises took a rather schematized and ahistoric view of things. For example, his view of entrepreneurship seems to be an abstract construct in which ownership and strategic decisionmaking are concentrated in a unitary actor, without any significant problems of bounded rationality or opportunism.”

Mises’s approach was praxeological. Baring coercive interventions of the state, his conclusions regarding the entrepreneur are naturally correct. However, that state hampering of the market renders it non-free and subject to the political entrepreneur can also be predicted praxeologically. This isn’t a strike against the entrepreneur as much as it is a strike against the state.

“In real world capitalism, on the other hand, things like the separation of ownership from control and the corporate form have distorted things almost beyond recognition from Mises’ abstract analysis.”

It is the state which distorts things, but not beyond recognition. It is well understood how business forms corrupt and coercive alliances with the state to create unnatural cartels and monopolies that harm the consumer and benefit the state and those colluding with it.

“For over a hundred years, since the corporate transformation of the economy and the cartelization of most industries into oligopoly markets, the effect of state intervention has been to significantly reduce the competitive disadvantage of inefficiency and along with it the market incentive toward entrepreneurship.”

We agree.

“I don’t dispute the importance of entrepreneurship. I doubt whether most syndicalists have conceptualized it in these explicit terms, but I think their actual critique of the present system was that owners of large concentrations of wealth were able to derive rentier incomes without any significant entrepreneurship, and that managerial elites ran corporations as bureaucracies without the need for much entrepreneurship themselves.”

Many coercive, socialistic, and statist plans and arguments are put forward on the very odd basis that previous coercive, socialistic, and statist plans have resulted in business-state collusion resulting in monopoly and harm to the consumer. I think it makes more sense to recognize private property ownership, cease to advocate coercion, theft and the state, and recognize the libertarian A-C ethic as the only true and just ethic.

“To the extent that they did exercise entrepreneurship, their innovations were an anemic shadow of those that would be carried out under worker self-management.”

I don’t know why you think so. I think Mises puts the counter argument in a very clear and convincing way. In the free market, if the worker wants to perform the entrepreneurial role, then he can and will. There is no one coercively stopping him. If a worker wants to save and invest in profit seeking ventures, he can and will, and as he does, he becomes the capitalist. And if the worker wishes to take his pay from other people’s savings, before the product goes to market, and buy things today, and forgo participation in the entrepreneurial and capitalistic process, he is free to do this as well. There is no need for coercion to keep certain people out of any role, and to coerce others into such roles.

“I doubt that the syndicalists would put it this way themselves, either, but the ideal system for entrepreneurship is one in which the organization of production, product development, and analysis of market feedback are united in the same people.”

I disagree. Economics clearly shows that the optimal system is where those who excel in and prefer certain economic roles should perform those roles and should not be excluded from or coercively forced into such roles.

“Tom Peters has advocated cross-disciplinary, self-directed teams as a way of achieving this, with R&D people working directly with workers on the shop floor to reduce turnaround time. But what Peters advocates is essentially an artificial simulation, within the corporate environment, of what would naturally exist in a market economy of small worker cooperatives.”

As long as we promote a truly free market, what emerges will be optimal and ideal.

“The ideal, from the perspective of reducing moral hazard and bounded rationality, and promoting innovation, is an enterprise in which decision-making power is combined with direct knowledge of the production process: where the transaction costs of aggregating “idiosyncratic knowledge” (as Hayek put it) are minimized, and positive and negative incentives are internalized in the same actors. Barry Stein argued in Size, Efficiency, and Community Enterprise that the greatest improvements to the production process came not from qualitative leaps, but from incremental improvements; and that the best ideas for such incremental improvements came from those directly engaged in the process. And numerous studies on the history of major inventions have shown that most of them came from individual tinkerers or from small “skunk works.” Under a corporate hierarchy, those engaged in the production process are completely divorced from the authority to put their ideas into effect without going through a dozen layers of bureaucracy, but they interalize none of the productivity gains from them when they *are* put into effect.”

This is fine. However, remember the important point that Mises was trying to make with this: “Thus the syndicalist ignores the essential problems of entrepreneurship: providing the capital for new industries and the expansion of already existing industries, restricting branches for the products demand for which drops, technological improvement.”

There is more to the entrepreneur than the optimal daily management of a business. In fact, it is almost nothing to do with this. It is the directing of capital to its most profitable and therefore most socially beneficial applications. It is the speculative aspect of the entrepreneur that cannot be replaced by factory workers, and this is part of what the syndicalist misses.

Kevin Carson June 26, 2006 at 9:30 pm

“I think Mises agreed that state ownership and planning are necessary conditions of socialism.”

But he went beyond Engels in equating them with socialism.

Re your other comments on combining the entrepreneurial, managerial, and production functions, I agree that a free market *would* promote the optimum division of labor in these roles, and that the decision as to whether to combine entrepreneurship with labor should be left to the free decision of the people involved. They certainly shouldn’t be forced into these roles.

My argument is that state capitalism creates a separation of these roles far beyond what would exist in a free market. At present, they are so separated that the costs of aggregating their distributed information for any coherent decision making process is very high. Corporate bureaucracies react very slowly both to market information about consumer desires and to internal information about the production process. Stovepiping of separate functions greatly increases the turnaround time required to coordinate market feedback, product development, and the production process.

Again, I have no objection to the idea of entrepreneurship. But I believe a genuine market economy, of small-scale production for local markets, would be much more conducive to vesting the entrepreneurial functions in the producers.

Jay November 9, 2009 at 2:05 pm

I will admit that none of the three systems is perfect whether it be mutualism, capitalism, or socialism. You give an extreme example. But an extreme example could go the other way from a Lockean/capitalistic perspective. Say you have a person who “owns” land with their claim of title being an inheritance. The only thing they have done is receive it in Daddy’s will. They turn around and quickly rent it out. The renter works the land diligently for years making massive improvements and producing crops or something of recognized value on the land. 10 years later, the landlord says “I’m not renewing your lease, you will have to leave at its termination”. Both your example as well as mine illustrate that neither pure mutualism, nor pure capitalism are perfect systems. I lean toward a mutualist system but I can see some advantages within capitalism for economic growth (not state capitalism) and some aspects where it may actually be more equitable. I think if we could move the nucleus way from the state system, especially the Federal government in the US and empower local communities that would be a good thing. Then if we could have a blending of capitalism and mutualism that also would be good. Such as a mixture of sole proprietors, partnerships, worker cooperatives, and some capitalist corporations that would be ideal. Maybe property law should be a blending of mutualist and Lockean principles. One key thing that could be done would be to shorten the time on adverse possession laws. I also support renter cooperatives and housing cooperatives as low cost housing options for low income people over government housing or landlord housing. I know a big thing for anarco capitalists is competition within policing and court systems. To some extent I agree but don’t support totally private systems with no accountability from the community or voice from the people. I do support an expansion of private arbitration and meditation systems as well as citizen militias for policing rather then relying on professional state police forces. I also in fine with more private security if that is what people want to pay for.

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