Introduction to “Markets, not Corporatism”

Original untranslated version by
Gary Chartier & Charles Johnson

Translated from Marxian to Rothbardian by Hogeye Bill
Rothbard-bird

Anarcho-capitalists believe in market exchange, not in economic privilege. They believe in free markets, not in corporatism. What makes them anarchists is their belief in a fully free and consensual society - a society in which order is achieved not through legal force or political government, but through free agreements and voluntary cooperation on a basis of equality of rights. What makes them anarcho-capitalists is their recognition of free market exchange as a vital medium for peacefully anarchic social order. But the markets they envision are not like the privilege-riddled “markets” we see around us to- day. Markets laboring under government and corporatism are pervaded by persistent poverty, ecological destruction, radical inequalities of wealth, and concentrated power in the hands of corporations, bosses, and landlords. The consensus view is that exploitation - whether of human beings or of nature - is simply the natural result of markets left unleashed. The consensus view holds that private property, competitive pressure, and the profit motive must - whether for good or for ill - inevitably lead to “corporatist” wage labor, to the concentration of wealth and social power in the hands of a select class, or to business practices based on growth at all costs and the devil take the hindmost.

Anarcho-capitalists dissent. They argue that economic privilege is a real and pervasive social problem, but that the problem is not a problem of private property, competition, or profits per se. It is not a problem of the market form but of markets deformed - deformed by the long shadow of historical injustices and the ongoing, continuous exercise of legal privilege on behalf of capital. The anarcho-capitalist tradition is radically pro-market and anti-corporatist – reflecting its consistent concern with the deeply political character of corporatist power, the dependence of economic elites on the tolerance or active support of the state, the permeable barriers between political and economic elites, and the cultural embeddedness of hierarchies established and maintained by state-perpetrated and state-sanctioned violence.

The Market Form

This book is intended as an extended introduction to the economic and social theory of anarcho-capitalism. Anarcho-capitalism is a radically individualist and anti-corporatist social movement. Like other anarchists, market anarchists are radical advocates of individual liberty and mutual consent in every aspect of social life - thus rejecting all forms of domination and government as invasions against liberty and violations of human dignity. The anarcho-capitalists’ distinct contribution to anarchist thought is their analysis of the market form as a core component of a thoroughly free and equal society - their understanding of the revolutionary possibilities inherent in market relationships freed from government and corporatist privilege, and their insights into the structures of political privilege and control that deform actually-existing markets and uphold exploitation in spite of the naturally equilibrating tendencies of market processes. Since they insist on so sharp a distinction between the market form as such and the economic features of actually-existing “capitalism,” it is important to carefully distinguish the key features of markets as anarcho-capitalists understand them. The social relationships that anarcho-capitalists explicitly defend, and hope to free from all forms of government control, are relationships based on:

1  Ownership of property, especially decentralized individual ownership, not only of personal possessions but also of land, homes, natural resources, tools, and capital goods;

2  Contract and voluntary exchange of goods and services, by individuals or groups, on the expectation of mutual beneit;

3  Free competition among all buyers and sellers - in price, quality, and all other aspects of exchange - without ex ante restraints or burdensome barriers to entry;

4  Entrepreneurial discovery, undertaken not only to compete in existing markets but also in order to discover and develop new opportunities for economic or social beneit; and

5  Spontaneous order, recognized as a significant and positive coordinating force - in which decentralized negotiations, exchanges, and entrepreneurship converge to produce large-scale coordination without, or beyond the capacity of, any deliberate plans or explicit common blueprints for social or economic development.

Anarcho-capitalists do not limit ownership to standard capitalist sticky property. Possession and common or collective ownership are not excluded, so long as such arrangements are voluntary. Anarcho-capitalists insist on the importance of contract and market exchange, and on profit-motivated free competition and entrepreneurship, and they not only tolerate but celebrate the unplanned, spontaneous coordination that Marxists deride as the “social anarchy of production.” But anarcho-capitalists are also radically anti-corporatist, and they absolutely reject the belief - common to both the anti-market Left and the statist-capitalist Right - that these five features of the market form must entail a social order of bosses, landlords, centralized corporations, class exploitation, cut-throat business dealings, immiserated workers, structural poverty, or large-scale economic inequality. Anarcho-capitalists insist, instead, on five distinctive claims about markets, freedom, and privilege:

• The centrifugal tendency of markets: Anarcho-capitalists see freed markets, under conditions of free competition, as tending to diffuse wealth and dissolve fortunes – with a centrifugal effect on incomes, property-titles, land, and access to capital – rather than concentrating it in the hands of a socioeconomic elite. Anarcho-capitalists recognize no de jure limits on the extent or kind of wealth that any one person might amass; but they believe that market and social realities will impose much more rigorous de facto pressures against massive inequalities of wealth than any de jure constraint could achieve.

• The radical possibilities of market activism and experimentation: Anarcho-capitalists also see freed markets as a space not only for profit-driven commerce, but also as spaces for social experimentation and hard- driving grassroots activism. They envision “market forces” as including not only the pursuit of narrowly financial gain or maximizing returns to investors, but also the values of friendship, mutual respect, and non-aggression. “Market processes” can - and ought to - include conscious, coordinated efforts to raise consciousness, change economic behavior, and address issues of oppression and justice through nonviolent direct action.

• The rejection of statist-quo economic relations: Anarcho-capitalists sharply distinguish between the defense of the market form and apologetics for actually-existing distributions of wealth and class divisions, since these distributions and divisions hardly emerged as the result of unfettered markets, but rather from the governed, regimented, and privilege-ridden markets that exist today. They see actually-existing distributions of wealth and class divisions as serious and genuine social problems, but not as problems with the market form itself; these are not market problems but ownership problems and coordination problems.

• The regressiveness of regulation: Anarcho-capitalists see coordination problems - problems with an unnatural, destructive, politically-imposed interruption of the free operation of exchange and competition - as the result of continuous, ongoing legal privilege for incumbent capitalists and other well-entrenched economic interests, imposed at the expense of small-scale competitors and the working class.

• Dispossession and rectification: Anarcho-capitalists see economic privilege as partly the result of serious ownership problems - problems with an unnatural, destructive, politically-imposed maldistribution of property titles - produced by the history of political dispossession and expropriation inflicted worldwide by means of war, colonialism, segregation, nationalization and kleptocracy. Markets are not viewed as being maximally free so long as they are darkened by the shadow of mass robbery or the denial of ownership. Anarcho-capitalists emphasize the importance of reasonable rectification of past injustices - including grassroots, anti-corporatist, anti-neoliberal approaches to the privatization (devolution to society) of state-controlled resources; processes for restitution to identifiable victims of injustice; and revolutionary expropriation of property fraudulently claimed by the state and state-entitled monopolists.

The Anarcho-capitalist Tradition

Early anarchist thinkers such as Josiah Warren and Pierre-Joseph Proudhon emphasized the positive, socially harmonizing features of market relationships when they were conducted within a context of equality. Proudhon, for example, wrote that social revolution would abolish the “system of laws” and “principle of authority,” to replace them with the “system of contracts”.[1]

Gustave de Molinari, a protégé of the laissez faire economist Frederic Bastiat, wrote in the seminal anarcho-capitalist essay “The Production of Security” in 1849:

If there is one well-established truth in political economy, it is this: That in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer's best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price. And this: That the interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer. Now in pursuing these principles, one arrives at this rigorous conclusion: That the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition. Whence it follows: That no government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity. - Gustave de Molinari, The Production of Security

Drawing on Molinari’s, Warren’s, and Proudhon’s use of contract and exchange for models of voluntary exchange, distinctive strands of anarcho-capitalism have emerged repeatedly within the broad anarchist tradition, punctuated by crises, collapses, interregnums and resurgences. The history is complex, but it can be roughly divided into three major periods represented in this text:

(i) a “first wave,” represented mainly by “individualist anarchists” and “mutualists” such as Benjamin Tucker, Voltairine de Cleyre, and Dyer Lum, and occupying roughly the period from the American Civil War to 1917;2

(ii) a “second wave,” coinciding with the radicalization of pro-capitalist American libertarians and the resurgence of anarchism as a family of social movements during the radicalism of the 1960s and 1970s, when Murray Rothbard coined the term "anarcho-capitalism."

(iii) a “third wave,” developing as a dissident strand within the anarchist milieu of the 1990s and the post-Seattle movement of the new millennium.

In spite of discontinuities and differences, each wave has typically revived the literature of the earlier waves and drawn explicitly on its themes; what has, in general, united them is their defense of market relationships and their particular emphasis on the revolutionary possibilities inherent in the market form, when it is - to the extent that it is - liberated from legal and social institutions of privilege.

The anti-corporatism of the “first wave” individualists was obvious to them and to many of their contemporaries. Benjamin Tucker famously argued that four monopolies, or clusters of state-guaranteed privileges, were responsible for the power of the corporate elite - the patent monopoly, the effective monopoly created by the state’s distribution of arbitrarily engrossed land to the politically favored and its protection of unjust land titles, the money and credit monopoly, and the monopolistic privileges conferred by tariffs. The economically powerful depended on these monopolies; eliminate them, and the power of the elite would dissolve.

Tucker was committed to the cause of justice for workers in conflict with contemporary crony capitalists, so he clearly identified with the burgeoning socialist movement. But he argued against Marx and other socialists that private property and market relationships could be fruitful and non-exploitative provided that the market-distorting privileges conferred by the four monopolies were eliminated.

The radicalism of Tucker and his compatriots and that of the strand of anarchism they birthed was arguably less apparent after the breaking of the first wave than it was to their contemporaries. Perhaps in part this is because of their disputes with representatives of other anarchist tendencies, whose criticisms of their views have influenced the perceptions of later anarchists.

While many party libertarians endorsed the critique of the state and of state-secured privilege offered by Tucker and his fellow individualists, they often overlooked or rejected the radical implications of the earlier individualists’ class-based analysis of structural injustice. There were, in short, few vocal enthusiasts for the individualists’ brand of anticorporatism in the early-to- mid-twentieth century.

The most radical fringe of the market-oriented strand of the libertarian movement - represented by thinkers like Murray Rothbard and Roy Childs - did embrace the anti-corporatist economics of individualism and mutualism, and coined the term “anarcho-capitalism.” While Rothbard and Childs took a natural rights approach to anarcho-capitalism, David Friedman demonstrated the practicality and economic logic of liberty and freed markets in “The Machinery of Freedom. The future free society they envisioned was a market society - one in which market relationships were radically changed from business as usual, and the end of state control was imagined which would radically transform market forms from the bottom up.

Thus, Rothbard, Childs, and Friedman led the “second wave” of the 1960s, which they attempted to meld with the antiauthoritarian and countercultural strands of the New Left. The antiwar radicals among the libertarians began to rediscover and republish the works of the first wave individualists. Anarcho-capitalists Rothbard and Childs began to question libertarianism’s historical alliance with the Right, and to criticize statist capitalist defenses of big business and existing corporatism. Perhaps the most visible and dramatic example was Karl Hess’s embrace of agorism, i.e. his abandonment of taxed economics in favor of small-scale, community-based, untaxed “agoric” markets.

The “second wave” was followed by a second trough, for anarchism broadly and anarcho-capitalism in particular. By the later 1970s and the 1980s, the anti-corporatist tendency among market-oriented libertarians had largely dissipated or been shouted down by the mainstreaming pro-corporatist politics of well-funded “libertarian” institutions like the Cato Institute and the leadership of the Libertarian Party. But with the end of the Cold War, the realignment of longstanding political coalitions, and the public coming-out of a third wave anarcho-capitalist movement in the 1990s, the intellectual, social stages were set for today’s resurgence of anti-corporatist anarcho-capitalism.

By the beginning of twenty-first century, anti-corporatist descendants of the individualists had grown in number, influence, and visibility. They shared the early individualists’ conviction that markets need not be exploitative. At the same time, they elaborated and defended a distinctively libertarian version of class analysis that extended Tucker’s list of monopolies and highlighted the intersection of state-secured privilege with systematic past and ongoing dispossession and with a range of issues of ecology, culture, and interpersonal power relations. They emphasized the fact that, while genuinely liberated - freed - markets could be empowering, market transactions that occurred in contexts misshapen by past and ongoing injustice could be, not surprisingly, debilitating and oppressive. But the problem, the new individualists (like their predecessors) insisted, lay not with markets but rather with corporatism – with social dominance by economic elites secured by the state.

Corporatism - social dominance by economic elites secured by the state

The solution, then, was the abolition of corporatism through the elimination of legal privileges, including the privileges required for the protection of title to stolen and engrossed assets.

The new wave of anarcho-capitalists have been equally critical of explicitly statist conservatives and progressives, and the faux-libertarians on the right who use the rhetoric of freedom to legitimate corporate privilege or military imperialism. Their criticism of this sort of “vulgar libertarianism” has emphasized that some existing economic relationships are shot through with injustice from top to bottom, and that calls for freedom can readily be used to mask attempts to preserve the freedom of elites to retain wealth acquired through state-tolerated or state-perpetrated violence and state-guaranteed privilege.

The Natural Habitat of the Anarcho-capitalist

This book would not have been possible without the Internet. The reader of Markets Not corporatism will quickly notice that many of the articles do not read quite like chapters in an ordinary book. Many of them are short. Many of them begin in the middle of a dialogue - one of the most frequent opening phrases is “In a recent issue of such-and-such, so-and-so said that...” The contemporary articles often originally appeared online, as posts to a weblog; they refer frequently to past posts or pre-existing discussions, and often criticize on or elaborate comments made by other authors in other venues. While the articles have been reformatted for print, many still read very distinctly like the blog posts that they once were.

But this is not merely an artifact of Internet-based social networks. The history of the individualist and mutualist tradition is largely a history of ephemeral publications, short-lived presses, self-published pamphlets, and small radical papers. The most famous is certainly Benjamin Tucker’s Liberty (1881-1908), but also includes such publications as Hugh Pentecost’s Twentieth Century (1888-1898), as well as “second wave” anarcho-capitalist journals such as Left and Right (1965-1968) and Libertarian Forum (1969-1984). All these publications were short and published frequently; their articles were typically critical rather than comprehensive, idiosyncratic rather than technical in approach and tone. Long-standing, far-reaching debates between papers, correspondents, and the surrounding movement were constant sources of material; where a specific interlocutor was not available for some of these articles, the author might, as in de Cleyre and Slobodinsky’s “The Individualist and the Communist: A Dialogue,” go so far as to invent one. The most famous book-length work from the “first wave” – Tucker’s Instead of a Book, by a Man Too Busy to Write One (1893) – is simply a collection of short articles from Liberty, the majority of which are clearly themselves replies to questions and arguments posed by Liberty’s readers or fellow journal editors. The critical exchanges read very much like those one might encounter today on Blogger or WordPress sites – because, of course, today’s blog is merely a new technological form taken by the small, independent press.

The independent, dialogue-based small press has provided a natural habitat for anarcho-capitalist writing to flourish - whereas liberal and Marxist writing found their most distinctive habitats in declarations, manifestos, and intricate, comprehensive treatises. Why this might be the case is a large question, worth exploring far beyond what the limits of this preface might allow. However, it may be worth noting that anarcho-capitalism has more or less always emerged as a critical and experimental project – on the radical fringes of social movements.

Anarcho-capitalism aims to draw out social truths not by dogmatizing or laying down the law, but rather by allowing as far as possible for the free interplay of ideas and social forces, by looking for the unintended consequences of accepted ideas, by engagement in an open-ended process of experimentation and discovery that permits the constant testing of both ideas and institutions against competitors and bottom-line reality.

The revolutionary anarchist and mutualist Dyer D. Lum (1839-1893) wrote in “The Economics of Anarchy” that a defining feature of market anarchy was the “plasticity” of social and economic arrangements as opposed to the “rigidity” of either statist domination or communist economic schemes. The substance of anarcho-capitalist ideas has arguably shaped the form in which anarcho-capitalist writers feel most at home expressing them. Or perhaps, conversely, the form of the writing may even be what has often made the substance possible: it may be that market anarchist ideas most naturally take shape in the course of dialogue rather than disquisition, in the act of critical give-and-take rather than one-sided monologue. The value of spontaneity, exploratory engagement, and the rigors of the competitive test may be as essential to the formation of anarcho-capitalist ideas in writing as they are to the implementation of those ideas in the world at large.

If so, then these articles must be read with the awareness that they have, to a certain extent, been lifted out of their natural environment. There are longer, sustained treatments of the topics they address, but most articles were originally contributions to longstanding, ongoing projects, and took place in the course of wide-ranging debates. We have collected them in a printed anthology to do a service to the student, the researcher, and anyone else who is curious about alternative approaches in free market economics and anarchist thought. But they are best understood not as identifying the end of the subject, or even really the beginning, but rather as offering an invitation to dive in in medias res, to see anarcho-capitalist ideas emerging from the dialogical process itself - and to participate in the ongoing conversation.


Notes:

[1]  See “Organization of Economic Forces,” General Idea of the Revolution in the Nineteenth Century, ch. 3.

[2]   The exact differences between “individualists” and “mutualists” during the first wave were hardly ever cut and dried; many writers (such as Tucker) used each word at different times to refer to their own position. However, a few differences might be sketched between those who were most frequently called “individualists,” such as Tucker or Yarros, and those who were most frequently called “mutualists,” such as Dyer Lum, Clarence Swartz, or the European followers of Proudhon—in particular, that while both supported the emancipation of workers and ensuring that all workers had access to capital, the “mutualists” tended to emphasize the specific importance of worker-owned co-operatives and direct worker ownership over the means of production, while “individualists” tended to emphasize that under conditions of equal freedom, workers would settle on whatever arrangements of ownership made most sense under the circumstances.

Complicating matters, “mutualism” is now retrospectively used, in the twenty-first century, to refer to most "closet" anarcho-capitalists who use Marxian jargon, or specifically to those (like Kevin Carson) who differ from the so-called “Lockean” position on land ownership, i.e. who believe that land ownership can be based only on personal occupancy and use, ruling out absentee landlordship as undesirable and unworthy of legal protection. “Mutualists” in this sense of the term includes both those who were most frequently called “individualists” during the first wave (such as Tucker) and those who were most frequently called “mutualists” (such as Lum).


Translator’s notes:

The original name of the book was "Markets Not Capitalism."

capitalism/t -> corporatism/t
market anarchist/m -> anarcho-capitalist/m
deleted “left-wing” everywhere
equality -> equality of rights replaced lefty value buzzwords with “friendship, mutual respect, and non-aggression.”
mutual sociality -> voluntary exchange
*private property and* market relationships
deleted silly vulgar lib claims
added Molinari and quote
added David Friedman and MoF book title

AnarchoDollar-sm-tr
Anarchism

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