The Iron Fist Behind Exchange: The Problems With The Freed Market

A few comments

Quote:

There are many strange trends among people who call themselves "Anarchists", one of them being the peculiar Center For A Stateless Society which combines the individualist Anarchism of Benjamin Tucker with "free market" economics.

As Tucker advocated "free market" economics, C4SS can hardly be said to "combine" them. The problem is that some on C4SS are not individualist-anarchists at all but rather "anarcho"-capitalists, using this as a means of injecting propertarianism into anarchism....

Quote:

The book makes the fallowing argument: The property of capitalists to means of production and land is based on state power which backs it up. [...] If the state was abolished capitalism would too go by the waste side and a true "freed market" would be allowed to grow with the true free exchange of goods.

This, surely, is basic to all schools of anarchism? The state defends capitalist property and property rights, intervenes to skew the market against the proletariat, etc. As it stands, you admit as much later. The question is whether just removing the state and capitalist property rights are sufficient to end exploitation and create a better society.

Some of the individualists recognised that wage-labour itself had to go, and so supported co-operatives -- but Tucker envisioned some kind of non-exploitative wage-labour and so showed a lack of understanding of Proudhon's theory of exploitation (which takes place within production).

They also failed to discuss the negative impact of market forces -- competition resulting in pressures which result in over-work, etc.

Quote:

I think it would be a stretch to call this credo any kind of "socialism" because it makes no commitment to common ownership of production and the product of social labor (the kind of free exchange of goods that is imagined here would be rendered impossible through this).

Yes, if you define "socialism" as communism, then, yes, they are not socialists. However, not all socialists have been communists. It is socialist in-so-far as it recognises that labour is exploited under capitalism and they seek to ensure the worker receives the full product of their labour.

I don't think that Tucker's position would end exploitation, however if you take Lum and others who are more mutualist then they would end exploitation as workers would sell the product of their labour. Whether that is the best form of socialism you can get is another matter.

Quote:

The "free market" is an invention of capitalist ideology which serves the function of keeping people's attitude to the system favorable. If people believe that capitalism is a series of voluntary exchanges where goods and services flow freely then they are less likely to buy the notion that capitalism is at all oppressive, or unfair.

Which is why the likes of Milton Friedman talk of market relations rather than workplace ones -- but that is somewhat beside the point, in this case, as Kevin Carson is well aware of the oppressive nature of wage-labour.

Quote:

1: Firms can not operate without monopolistic practices. Firms have to enforce some kind of monopoly to survive. If they didn't the price of any commodity could be bid down to nothing and the market would effectively cease to exist.

What school of economics argues that? None... the argument is that without state intervention the price of a commodity would drop to its LABOUR costs, with the worker getting the market price of their product. As noted, Tucker does not address why this would happen -- unlike Proudhon. And given Carson argues that co-operatives would replace individual ownership, you are not really addressing his argument.

Quote:

2: Firms can't cover the majority of their costs. The costs of transportation, resource replenishment, and pollution clean up can not be efficiently internalized by a firm. This means that the state has to use tax money to cover these costs. Every firm in the market is propped up by the state.

In this I guess there is a valid point -- the need for "common goods" such as infrastructure. Proudhon argued for an industrial-economic and communal federations to build and run these. The Tucker school is reduced to firms using their income to build or pay for such services. Would this work?

Quote:

Getting rid of the state and the capitalist property norms it enforces doesn't deal with any of these problems. In fact the number of these functions that require the state such as covering costs and enforcing semi-monopolies such as patents would make this "freed market" society just as impossible as free market capitalism.

Tucker and Carson are clear that patents would not be enforced, so I'm not sure why you are inventing a strawman here...

Quote:

Reworking the concept of the "free", or "freed" market into an anti-capitalist one doesn't change the fact that it is effectively an ideological mechanism for the capitalist system based on an impossible myth. There is not, there never was, and there never will be a "free", or "freed" market.

As noted, you have not actually addressed the argument being made by Carson or Tucker...

Quote:

This argument also tacitly assumes that the market could create a society of freely associated producers, who aren't exploited, or oppressed by the economic set up. This is also untrue. The market is based on exclusion. It can only exist if the product of social production is appropriated for a specific party and then held ransom for an item of equal value. The extraction of the product of the labor of others and the coercion necessary to accomplish it, are inherent to the market system.

This is a mess. Mutualism argues that workers should "own" their product -- and so sell it on the market. It is hardly the "extraction of the product of the labour of OTHERS." Now, Proudhon explicitly argued that the means of production must be socially owned to achieve this (and so no wage-labour) while Tucker postulates non-exploitative wage-labour (wishful nonsense, given Proudhon's theory of exploitation).

So if workers are freely associated (no owning class, as all are workers) and they exchange the product of their labour with other freely associated workers, how can exploitation and oppression occur? There is no boss ordering the workers about nor monopolising the product of their labour...

Quote:

The state is needed to enforce this coercive and monopolistic set up just as it is needed to enforce the control capitalists have over land and production. The latter is simply an extension of the integration of more resources and labor into the market.

How is a worker not freely giving the product of their toil "coercice and monopolistic"? Should all be forced to be communists? If so, then it is hardly libertarian...

Quote:

The means of production and land are the property of the few who can afford to buy and sell them precisely because they are commodities for sale on the market.

Now, that depends on the individualists in question. Some recognise that associated labour means all participate in decision making, so property is essentially socialised. Tucker, in constrast, does not conclude this and so cannot achieve his socialis goal. Carson does raise the contradiction in Tucker's position and favours co-operatives, but I'm not sure whether he has fully addressed this issue.

Quote:

It is completely unclear how there is going to be a post-capitalist society with no capitalist property relations, but also the full integration of production into the market. Really, the freed market analysis ignores the basis for capitalist relations. It assumes that capitalism is made up of a series of state enforced property relations. If this is true then to abolish capitalism, all that is required is to abolish the state and with it those property relations.

I don't think that a market economy with occupancy and use of land, no patent enforcement, etc. in which self-employed workers and co-operatives sell their product is that hard to envision -- unless you equate markets with capitalism, of course.

Quote:

In reality capitalism is simply the extension of the market fully into production. Once production itself, and people's ability to work in it, are bought and sold, capitalism has come into existence bringing with it the state and coercive property relations.

You do realise that this contradicts your previous assumptions? This was precisely Proudhon's (and post-1857 Marx's) point. Capitalism is based on the separation of the worker from the means of production, so they sell not the product of their labour but the labour-power itself.

Quote:

Creating a post-capitalist society of free producers would require abolishing the market. Social production would need to be socially managed and consumed so as to eliminate private appropriation of the social product. This would eliminate any place for the private buying and selling of the market.

Why? This is pure assertion. You have not explained why workers selling the product of their labour is such an evil that it requires forcing everyone to be communist, whether they want it or not. Why is, say, a peasant-farmer selling the milk they have extracted from their cattle the same as capitalism (where the peasant-worker is paid a fraction of their labour by the landlord)?

Quote:

Freed market anti-capitalism is a confused set of ideas.

This critique, I would say, is what is confused -- not least as it has not really addressed what Carson is arguing nor does it concentrate on the key issues with Tucker's ideas.

Quote:

It ignores the real basis for capitalism's existence (the market) and attempts to preserve it while buying into the capitalist ideology of the "free market".

Markets have existed before capitalism, the question is whether it should out-live it. The analysis above does not provide a key analysis why it should not. It also does not address the issue of freedom -- it seems to suggest that we all will be communists, which can only really be achieved quickly in one way (and it is not libertarian). We have to convince others of the problems within even non-capitalist markets, and this is not even touched upon here. Instead we get strawman arguments.

Quote:

By ignoring that capitalism is the generalization of market relations this analysis, in fact, stipulates that capitalism is simply a series of state imposed restrictions on the market.

This could be argued against Tucker at his worse, but Carson does understand the issue of wage-labour far better than Tucker (or others on C4SS).

Quote:

This allows freed market anti-capitalists to argue that a free, post-capitalist society, would be one with a truly free market, when the task is actually to do away with the market all together.

Yes, I agree with the conclusion -- but getting rid of the market can only be done by libertarian means. Given that you have not explained why, say, the artisan selling the toys she created by hand is "coercice and monopolistic" but others just taking them (by force) is not, I think that more work needs to be done for the critique to strike home.

So, there is a need to show that Tucker's position cannot achive its stated socialist goal -- it cannot ensure the worker receives the full-product of their labour for exploitation occurs within production, after the contract is signed. Even the strengthening of the workers' position on the labour market cannot achieve this -- for capitalism would soon slump, increasing unemployment. Only expropriation can do this.

Then there is the need to discuss why expropriating the workplace and running it as a co-operative has its issues. Ending exploitation and oppression within the workplace needs free entry (i.e., socialisation), to ensure the end of wage-labour. However, what of the market forces produced by selling the product of that collective labour? Can they not result in unwanted pressures on the workers, unneeded and harmful inequalities, etc.?

Finally, you cannot really make sweeping suggestions that socialism needs the end of all markets. Not all socialists argued that -- and you have to recognise that any post-revolutionary society will see a range of experimentations. Free communism would be ironic if you don't have a choice! And as it stands, Kropotkin, Malatesta, etc. all recognised that people who don't exploit the labour of others would be left alone and convinced to be communists by the power of example.

Anyway, I address many of these questions in "An Anarchist FAQ," particularly section G.

Hi Anarcho, I think you have fundamentally failed to read my piece as clearly intended. You have broken it up into fragmentary points and ignored the way they come together in a full argument as well as the point that that argument even serves. I find this frustrating because it allows you to claim that I have not explained a point I make when I actually have and you have simply ignored that explanation because you have read the article as a series of quotes rather than a paper trying to make an over all argument. You have also gone into the article with the assumption that I am making my critique based on "what Anarchists have thought about the subject historically" when I am actually approaching the subject based on an Anarchist interpretation of the actual realities independent of what specific Anarchists have historically thought. This makes your repeated appeals to what people who have called themselves "socialists" have argued and what Tucker has argued (you seem to think that because I mentioned his name once that I'm trying to evaluate his views) misplaced on a basic level. I am not concerned with what Tucker, or Proudhon, or whoever thought about markets because this is not a piece of Anarchological scholarship. It is an analysis of "freed market anti-capitalism" as presented in "The Iron Fist Behind The Invisible Hand" from an Anarcho-syndicalist-Libertarian Communist point of view.

Since you have missed my whole argument I will make it once again in short form in this reply:

The market is the basic unit of capitalism. Capitalism exists because the productive resources of society and human labor power are brought into the market as commodities to be bought and sold. Yes, you can have a market in a society that is not capitalist, but the market is the basic unit of capitalism so preserving it means preserving a basic, foundational relation of capitalist society. You can have states and class divisions in a non-capitalist society as well, this doesn't mean that they should survive capitalism. Further, the market only exists through the private appropriation of the product of social labor.

The market is not when each of us has something the other wants so we give away one thing in exchange for the other. The market is a system of social production. Thus what is produced within the market is the product of collective labor. In the market the product of that social labor is appropriated by the person who has control over the immediate production process of the finished good. This producer then holds this product ransom for compensation that must be gained through trans-actions elsewhere that themselves require labor to carry out. Thus the market is based on exploitation. The state must intervene to protect these monopolistic property relations with it's coercive apparatuses.

The conclusion that fallows from this is that "markets, not capitalism" is a confused sentiment that will only result in a society which has not reached freedom and equality. This system may not be capitalist, but it will contain many capitalist mechanisms of exploitation and will certainly not be a society of freely associated producers. This fact is compounded by the additional reality of the free market being impossible. It is precisely because the free market proposed by Carson would explicitly imply the abolition of state intervention to enforce things such as patents that such a set up would not be feasible. The state will need to intervene to enforce semi-monopolies and cover the majority of production costs. You mockingly asked "what economist says this??", this is shown in detail in the passage I cited in the bibliography to my article in sociologist Immanuel Wallerstein's "World Systems Analysis: An Introduction".

The subject of "freedom" is indeed important here. Of coarse the abolition of market relations should not be accomplished by gulaging anyone who sells a chair they made, or something. The fact that I have to explain this makes me feel as though I am talking to an Anarcho-capitalist rather than a fellow libertarian socialist. The point I made in the article (which you indeed missed) was that the market would be made obsolete by a libertarian socialist society. A society where social production is managed and consumed collectively would have to be a society where the product of that production is also managed and consumed collectively. How will we have democratic organization of social production without democratic organization of what it produces? This would leave no room for property relations that would allow the immediate producers of a finished good to charge a fee for those goods in search of personal profit.

Since you are very interested in what Anarchists historically thought about this subject I would submit "On Exchange" by Joseph Dejacque and Errico Malatesta's "Note On Individualism". Dejacque argues that Proudhon's argument for the abolition of exploitative property is contradicted by his advocacy for market relations among cooperatives since this would require charging a ransom for goods people are seeking to acquire. Malatesta argues that while those who may have individual holdings which they can maintain by themselves should be left alone, the only way to create freedom in social production would be collective self-management through cooperation among the producers. In these works these two classical Anarchist thinkers make the classic Anarchist Communist argument that a libertarian socialist society would effectively phase out buying and selling on the market. There are also two modern articles, one from the Anarcho-syndicalist historian Vadim Damier and the other from the Anarcho-syndicalist organization in Britain, Solidarity Federation, which argue respectively that a libertarian socialist society would entail self-managed organization of the product of production as well as production itself. See "The Economy Of Freedom" and "The Economics Of Freedom".

Quote:

Hi Anarcho, I think you have fundamentally failed to read my piece as clearly intended. You have broken it up into fragmentary points and ignored the way they come together in a full argument as well as the point that that argument even serves.

Given that I went through your piece in order, I would say that I have presented its problems well.

Quote:

I find this frustrating because it allows you to claim that I have not explained a point I make when I actually have and you have simply ignored that explanation because you have read the article as a series of quotes rather than a paper trying to make an over all argument.

As noted, your argument really did not address the ideas of the people who were critiquing. I simply noted where you failed to do so.

Quote:

You have also gone into the article with the assumption that I am making my critique based on "what Anarchists have thought about the subject historically" when I am actually approaching the subject based on an Anarchist interpretation of the actual realities independent of what specific Anarchists have historically thought.

And I noted that you simply failed to address what these people actually argued, both now and in the past. In terms of "actual realties," given that individualist anarchism has never existed it is hard to know what you mean. If you are talking about the "actual realities" of capitalism, then that hardly addresses the individualist position as they seek to transform this system.

Quote:

This makes your repeated appeals to what people who have called themselves "socialists" have argued and what Tucker has argued (you seem to think that because I mentioned his name once that I'm trying to evaluate his views) misplaced on a basic level.

Whose views are you then trying to evaluate, if not the people who mention?

Quote:

I am not concerned with what Tucker, or Proudhon, or whoever thought about markets because this is not a piece of Anarchological scholarship. It is an analysis of "freed market anti-capitalism" as presented in "The Iron Fist Behind The Invisible Hand" from an Anarcho-syndicalist-Libertarian Communist point of view.

Given that Carson, the author of that piece, is writing from a Tucker-Proudhon influenced position, it makes sense to understand his position before trying to critique it. If you don't, then you simply are attacking a strawman.... as I noted. Now, to present an anarcho-communist critique which goes beyond ritualistic denouncements of "markets" then it would make sens to understand the position being critiqued and show its flaws, which you did not do.

Quote:

Since you have missed my whole argument I will make it once again in short form in this reply:

Okay, so as well as not addressing the ideas of the people you initially critiqued you will also ignore my points?

Quote:

The market is the basic unit of capitalism. Capitalism exists because the productive resources of society and human labor power are brought into the market as commodities to be bought and sold.

Markets pre-date capitalism but, yes, capitalism exists when wage-labour exists -- when there is a class of people who have only their labour to sell and a class who own the means of production. Which means that if workers own their means of production then capitalism does not exist, it would be mutualist-socialism if they sell the products of their labour.

Quote:

Yes, you can have a market in a society that is not capitalist, but the market is the basic unit of capitalism so preserving it means preserving a basic, foundational relation of capitalist society.

You do realise you have just contradicted yourself here, right? And what of, say, the Stalinist regimes -- does state-capitalism not exist? That is, that a regime can exist where "the market" can be replaced by central planning?

Quote:

You can have states and class divisions in a non-capitalist society as well, this doesn't mean that they should survive capitalism. Further, the market only exists through the private appropriation of the product of social labor.

Sorry, but no -- a market could and has existed with individuals selling the product of their own individual labour. It could also exist if groups of workers sold the product of their collective -- social -- labour. Neither mean a class system.

Quote:

The market is not when each of us has something the other wants so we give away one thing in exchange for the other. The market is a system of social production. Thus what is produced within the market is the product of collective labor.

Hardly, unles by "social production" you mean production within a society. After all, it is perfectly possible that after a social revolution not everyone will want to be communists -- does this mean, given your arguments above, they these people should be forced to be communists?

Quote:

In the market the product of that social labor is appropriated by the person who has control over the immediate production process of the finished good. This producer then holds this product ransom for compensation that must be gained through trans-actions elsewhere that themselves require labor to carry out. Thus the market is based on exploitation.

Er, no. The usual definition of "exploitation" in the socialist tradition is when workers are paid less than the value of the products they create because they have sold their labour and liberty to a boss. This exploitation occurs in production, not exchange, due to wage-labour. In this, both Proudhon and Marx (at least post-1857) were agreed.

Now, apparently, workers are exploited when they sell the product of their labour? How is that possible? Or do you mean their exploit others? who? those who buy their products? So the exchange of goods by workers between themselves is now "exploitation"?

Quote:

The state must intervene to protect these monopolistic property relations with it's coercive apparatuses.

So a society of workers' co-operatives would need a state to protect "monopolistic property relations," or workers selling the product of their labour? Hmmh. not sure any state has developed for this reason.

Quote:

The conclusion that fallows from this is that "markets, not capitalism" is a confused sentiment that will only result in a society which has not reached freedom and equality.

No, the conclusion which follows is that the critique is confused and only results from not addressing the ideas of the people you seem to be addressing, but failing.

Quote:

This system may not be capitalist, but it will contain many capitalist mechanisms of exploitation and will certainly not be a society of freely associated producers.

If the means of production are socialised and workers join associations as equals (rather than masters-servants), then it is a society of freely asociated producers. It is not, of course, communism -- but you have given no positive reason to favour (libertarian) communism over mutualism

Quote:

This fact is compounded by the additional reality of the free market being impossible

Well, assertion does not equate to proving...

Quote:

It is precisely because the free market proposed by Carson would explicitly imply the abolition of state intervention to enforce things such as patents that such a set up would not be feasible. The state will need to intervene to enforce semi-monopolies and cover the majority of production costs.

Sorry, but I'm at a lose to understand what this means... what "semi-monopolies"? and "cover the majority of production costs"?

Quote:

You mockingly asked "what economist says this??", this is shown in detail in the passage I cited in the bibliography to my article in sociologist Immanuel Wallerstein's "World Systems Analysis: An Introduction".

Oh, right, I did not read the book you did not mention, My bad.

And, btw, no economist argues what you suggested in the article above.

Quote:

The subject of "freedom" is indeed important here. Of coarse the abolition of market relations should not be accomplished by gulaging anyone who sells a chair they made, or something.

Nice to know -- but the tenor of your arguments suggested otherwise.

Quote:

The fact that I have to explain this makes me feel as though I am talking to an Anarcho-capitalist rather than a fellow libertarian socialist.

Oh, that is very droll... but if asking why a worker selling a chair equates to a "monopoly" evokes the sense of "anarcho"-capitalism when asked by a well-known critic of that nonsense would, perhaps, invoke questions on how the argument being made is coming across...

Quote:

The point I made in the article (which you indeed missed) was that the market would be made obsolete by a libertarian socialist society. A society where social production is managed and consumed collectively would have to be a society where the product of that production is also managed and consumed collectively.

And the point I made is such a society needs to be advocated by positive arguments rather than strawmen arguments against others. Proclaiming "markets" are "monopolistic" does suggest that every form of buying and selling must be eliminated -- but libertairian communism must be voluntary, so others need to won over by positive arguments and by example. This means buying and selling will continue post revolution and so hardly "exploitation" and "monopolistic"...

Quote:

How will we have democratic organization of social production without democratic organization of what it produces? This would leave no room for property relations that would allow the immediate producers of a finished good to charge a fee for those goods in search of personal profit.

So everyone has to be a communist then? What is it? Either you have forced communism or there IS "room" for "property relations" in a libertarian socialist society. Sadly, you do not seem to realise the contradictions within your position -- contradictions, I would say, which flow from not seriously addressing the ideas of the people you critique.

Quote:

Since you are very interested in what Anarchists historically thought about this subject I would submit "On Exchange" by Joseph Dejacque and Errico Malatesta's "Note On Individualism".

You do realise I'm repeating Malatesta's arguments? As for Dejacque, he presented a positive argument for communism and recognised the need for a mutualist transition period...

Quote:

Dejacque argues that Proudhon's argument for the abolition of exploitative property is contradicted by his advocacy for market relations among cooperatives since this would require charging a ransom for goods people are seeking to acquire.

And yet he also advocated mutualism as a transition period...

Quote:

Malatesta argues that while those who may have individual holdings which they can maintain by themselves should be left alone, the only way to create freedom in social production would be collective self-management through cooperation among the producers.

As noted, I'm repeating Malatesta's position... as he said, "free" communism would be ironic if you did not have a choice of an alternative. Unfortunately, while paying lip-service to this your argument suggests that any alternative arrangement would be "exploitation," "monopolist," etc. -- and we cannot have that, can we?

Quote:

In these works these two classical Anarchist thinkers make the classic Anarchist Communist argument that a libertarian socialist society would effectively phase out buying and selling on the market.

Phase out? So "exploitation" and "monopolisation" would be the outcome of a social revolution, at least at first? Anyway, as I noted in my original reply, those who wish to sell the product of their labour have to be convinced by example and by experience that libertairian communism is better -- that cannot really be done by proclaiming their desire to sell their product "exploitation" and "monopolist".

Quote:

There are also two modern articles, one from the Anarcho-syndicalist historian Vadim Damier and the other from the Anarcho-syndicalist organization in Britain, Solidarity Federation, which argue respectively that a libertarian socialist society would entail self-managed organization of the product of production as well as production itself. See "The Economy Of Freedom" and "The Economics Of Freedom".

Well, you could read something I wrote on the issue in An Anarchist FAQ:

I.3.7 What about people who do not want to join a syndicate?

and:

I.5.7 What if I don't want to join a commune?

Now, as originally noted you have simply not addressed the ideas of the people you claim to be critiquing. Rather, the argument is little more than a series of claims no how bad exchange is, any form of exchange, and so confuses markets with capitalism. This is something the "anarcho"-capitalists like to do, as they like to draw attention away from the hierarchical relations within production which capitalism creates (as I discuss in section F of An Anarchist FAQ). As it stands, such an approach comes across as quite authoritarian -- as it equates some one selling a chair with a capitalist.

Marx did this sort of thing in 1847 against Proudhon (amongst other nonsense), but by 1867 and Capital he saw the error of this. As I suggested above, this kind of analysis ends with the reader inferring some authoritarian positions -- sadly, your reply does not quite address this, but I am happy to see you would let that worker sell that chair (even given how terible this apparently this...)

Quote:

it is perfectly possible that after a social revolution not everyone will want to be communists

Proof that the "free markets not capitalism" thing hinges on a view of revolution as a giant magic "Reset" button

Quote:

This exploitation occurs in production, not exchange, due to wage-labour. In this, both Proudhon and Marx (at least post-1857) were agreed.

"It is just as pious as it is stupid to wish that exchange value would not develop into capital, nor labour which produces exchange value into wage labour." - Karl Marx, Grundrisse, The Chapter on Capital, 1858