So I’m happy to say that Markets Not Capitalism is now available for sale on the shelves of my favorite bookstore, The Gnu’s Room, here in Auburn. The Gnu’s Room has also very generously agreed to host a local author reading / discussion / book-signing / market anarchist hootenanny this Wednesday, November 30^th. I’ll be there to do a brief talk and a reading; and Roderick Long will be there to do much the same. Books will be sold, books will be signed, discussion to be had, caffeine to be consumed. Come on down! Invite yr friends!

Here’s the schedule:

Here’s the event description from The Gnu’s Room:

Co-Editor Charles Johnson and major contributor Roderick Long to the book Markets Not Capitalism (2011) will be at The Gnu’s Room for a discussion of the topics addressed in the book. The economic crisis needs fresh new responses, which emphasize the ways in which poverty and economic inequality have resulted from collusion between government and big business, which has enriched a few corporate giants at the expense of the rest of us. Rather than turning back to politics, the authors argue that working people must begin to free themselves of the mistakes of the past, and work together to take back control over their own lives and livelihoods through individual freedom, mutual exchange, and nonviolent grassroots social activism.

Here’s Juan Cole, Informed Comment 2011-08-12: Paul, Santorum and the Sixth War (on Iran):^[1]

A significant stream within [Right-wing] libertarianism theorizes war as the ultimate in this racket, whereby some companies use government to throw enormous sums to themselves by waging wars abroad and invoking patriotic themes. This analysis is remarkably similar to that of Left anarchists such as Noam Chomsky.

The difference is that for anarcho-syndicalists like Chomsky, the good guys of history are the workers and ordinary folk, whereas for Libertarians, it is entrepreneurs. Both theories depend on a naive reading of social interest. Right anarchists seem not to be able to perceive that without government, corporations would reduce us all to living in company towns on bad wages and would constantly be purveying to us bad banking, tainted food, dangerous drugs, etc. I mean, they behave that way when they can get away with it even when there is supposed government oversight, usually by capturing the government oversight agency that should be regulating them and then defanging it (e.g. BP and the Minerals Management Service). On the environment, private companies would never ever curb emissions without government intervention because of the problem of the commons. (Tellingly, Ron Paul calls global climate change a “hoax.”)

And, what makes the Libertarians think that if there were no governments or only weak governments, the corporations would not just wage the wars themselves? The East India Companies of Britain and the Netherlands behaved that way. India was not conquered by the British government, but by the East India Company. Likewise what is now Indonesia was a project of the Dutch East India Company. Libertarians have difficulty imagining warmongering corporations who pursue war all on their own without any government involvement.

And below, in comments on the post:

The theory that big corporations exist only because of government, and that monopoly capitalism is a result of government, is wrong. In fact, it is so obviously wrong and ahistorical (the biggest corporations and the strongest monopolies have occurred in the most laissez-faire societies) that it bewilders me how intelligent people ever came to believe it.

Well, you know, when left-libertarians get into arguments with progressives about this sort of thing, and we point out that, historically speaking, American-style capitalism did not really arise in anything resembling a free market — that there never has been anything resembling a free market — and when we point to the actual history of regulatory capture, legal monopoly, state subsidy, government dependence, etc. that historically lies behind commercial empires like the East India Companies (government-chartered and government-protected monopolies), British Petroleum (until recently a wholly owned subsidiary of the United Kingdom), Standard Oil and its descendents, Ma Bell and its descendents, General Electric, J.P Morgan-Chase, Bank of America, General Motors, etc. etc. etc. — and which created and sustained the family fortuens of the Rockefellers, Carnegies, Vanderbilts, Morgans, Goulds, ibn-Sauds, et al. — the response to this discussion of the historical sources of actually-existing capitalism is always met by a purely hypothetical alternative history, in which, it is alleged, such titanic concentrations of wealth, even though they actually arose in a system of privilege that had nothing to do with free markets, would still have arisen and maintained themselves just as well under purely hypothetical conditions of laissez-faire, even without all the concentrating, insulating, and subsidizing efforts that the manorial and corporate states have so energetically made on their behalf. If this claim is argued for at all, it is not argued for historically, since, of course, there are no historical examples of it ever having happened. It is instead argued for apriori, based on well, why wouldn’t they sorts of appeals to the nastiness of businessmen^[2], and the occasional reference to ahistorical hypotheticals or game-theoretic models, like Garret Hardin’s Tragedy of the Commons^[3] Then left-libertarians are accused of being naive.

But if we respond to this hypothetical speculation by adding on, alongside the history we have already discussed, some more general, apriori economic reasons to believe that stable monopolies and cartels cannot maintain themselves without government privilege, that freed markets would tend to dissipate concentrated fortunes, and that they would systematically contain and undermine, rather than entrenching, monopolies and cartels, then we are accused of utopian theorizing, and told that our view of markets is ahistorical.

Apparently we can’t win. Maybe that’s the point; but I think a rhetorical victory that actually engaged with the historical arguments being offered, or with the apriori arguments being offered, rather than simply waving them off as either nonexistent or obviously beneath the notice of intelligent people, might be a more satisfying achievement.

1. ^[1] Cole’s post is, structurally speaking, a post about how Juan Cole agrees with Ron Paul, and disagrees with Rick Santorum’s belligerent idiocy, on Iran. But Juan Cole cannot simply write a post about how he agrees with Ron Paul, just like that. So instead he spends about a third of the post talking about how he thinks that Right-wing libertarianism is a lot of rubbish with a dangerously naive view of corporate power. Which is not in an of itself a problem — right-wing libertarianism is a lot of rubbish with a dangerously naive view of corporate power. And I certainly have nothing against criticizing Chairman Ron’s version of it. But if your criticism of Ron Paul is based on the assertion that he is a Right anarchist — and that what makes him an anarchist is that he [wants] the least government possible then you are about to say something that has probably nothing really to do with, and certainly is not an accurate representation of either Ron Paul or Anarchism. And if you think that Ron Paul is an example of a Right anarchist, and Noam Chomsky is the best example you can think up for a Left anarchist, then I must gently suggest that you are talking outside of your area of expertise. ↩
2. ^[2] As if a freed market meant nothing more than that businessmen will act however they please — as if there were no other social forces that could possibly be activated within a freed market. ↩
3. ^[3] There is actually quite a lot of good economic literature demonstrating how and why real-world common-pool resources don’t simply get obliterated, as Hardin predicts they must be, in the absence of individualized ownership or top-down legal regulation. See for example the work of the Ostroms. ↩

tl;dr. There’s two beautiful new booklets available for ordering from the ALL Distro. This month’s Market Anarchy is a collection of five contemporary pieces on spontaneous order and freed-market social movements. This month’s Anarchist Classic is a sleek new edition of the oldest known English-language Anarchist tract. You can get one free sample copy of either series (or both) to check out, if you’re considering a monthly subscription for individual copies or monthly packs to distribute in the radical space of your choice. Sound good? Contact me for details. Also, we have some new ALL buttons, now available through the distro page.

Scatter tracts, like raindrops, over the land….

—William Lloyd Garrison, The Liberator, March 1831.

Two things.

1. The Lit

First, I’m happy to announce that earlier this week I mailed out the first orders of this month’s newest additions to the Alliance of the Libertarian Left Artwork & Agitprop Distro. Issue #18 of the now-monthly Market Anarchy Zine Series is a collection of five contemporary pieces on spontaneous order and freed-market social movements. Issue #6 of the Anarchist Classics Zine Series is as classic as it gets — the earliest known extended defense of philosophical Anarchism in the English language.

Market Anarchy #18 (Apr’11). Spontaneous Order. Five Theses on Freed-Market Social Movements and Self-Regulating Anarchy Sheldon Richman, Charles Johnson, and David D’Amato (2011)

In “Five Theses on Freed-Market Social Movements and Self-Regulating Anarchy,” Sheldon Richman, Charles Johnson, and David D’Amato look at the social and economic possibilities for social order to emerge without the need to impose social control – for spontaneous order and people-powered social movements against capitalism, racism, and ecocide within an anarchic freed market. Richman’s “Regulation Red Herring” discusses the demand for “regulation” and the power of unplanned spontan- eous order; Johnson’s “We Are Market Forces” considers the meaning of “market forces” and the possibilities for DIY social change in a self-regulating market anarchy; and in “I Oppose Civil Rights Acts because I Support Civil Rights Movements,” “The Free Market’s Regulatory Model,” and “The Clean Water Act vs. Clean Water,” Johnson and D’Amato apply the analysis to freed-market social activism against racism and environmental destruction. In a freed market, who will stop markets from running riot and doing crazy things? And who will stop the rich and powerful from running roughshod over everyone else? We will. In a freed market, if someone in the market exploits workers or chisels customers, if she produces things that are degrading or dangerous or uses methods that are environmentally destructive, it’s vital to remember that you do not have to just let the market take its course — because the market is not something outside of us; we are market forces…. When liberals or Progressives wonder who will check the power of the capitalists and the bureaucratic corporations, their answer is—a politically-appointed, even less accountable bureaucracy. The libertarian answer is—the power of the people, organized with our fellow workers into fighting unions, strikes and slow-downs, organized boycotts, and… alternative institutions…. [I]f you want regulations that check destructive corporate power, that put a stop to abuse or exploitation or the trashing of the environment, don’t lobby—organize! $1.50 for 1; $1/ea in bulk.

Anarchist Classics #6 (Apr’11). Vindication of Natural Society Anonymous (1756)

The “Vindication of Natural Society,” published anonymously in 1756, is the earliest known English-language tract to offer an extended defense of philosophical Anarchism – arguing for a peaceful social order based upon individual conscience and mutual agreement, without legal constraint or political authority. It was later discovered to have been written by Edmund Burke, then a radical Anglo-Irish journalist. This booklet is based on the original edition of the Vindication, which appeared anonymously and without further explanation. In later editions, after his authorship was discovered, Burke, who had retreated from his earlier views and begun a new career as a member of Parliament, added a new Preface, in which he disowned his anarchistic conclusions and stated that the entire argument was originally intended as satire. Many Anarchist readers, however, point out that the vigorous, coherent argument of the “Vindication” does not read like satire, and take Burke’s later disavowal as careerist damage control.[1] In any case, whatever the authorial intent, the “Vindication” went on to become a major influence on early English-speaking Anarchists such as William Godwin and the mutualist followers of Josiah Warren. To prove, that these Sort of policed Societies are a Violation offered to Nature, and a Constraint upon the human Mind, it needs only to look upon the sanguinary Measures, and Instruments of Violence which are every where used to support them. Let us take a Review of the Dungeons, Whips, Chains, Racks, Gibbets, with which every Society is abundantly stored, by which hundreds of Victims are annually offered up to support a dozen or two in Pride and Madness, and Millions in an abject Servitude, and Dependence…. I acknowledge indeed, the Necessity of such a Proceeding in such Institutions; but I must have a very mean Opinion of Institutions where such Proceedings are necessary…. I now plead for Natural Society against Politicians, and for Natural Reason against all…. My Antagonists have already done as much as I could desire…. The Monarchic, Aristocratical, and Popular Parti­zans have been jointly laying their Axes to the Root of all Government, and have in their Turns proved each other absurd and inconvenient. In vain you tell me that Artificial Government is good, but that I fall out only with the Abuse. The Thing! the Thing itself is the Abuse! $2.00 for 1; $1.50/ea in bulk.

As I mentioned last month, both the Market Anarchy Zine Series and the new Anarchist Classics Zine Series have become regular monthly publications. One issue in each series is published every month. I’ve been working out the publication schedules, and from here on out, new issues will be announced (and made available for pre-order) around the first Friday of every month. Issues will be mailed out to subscribers and pre-orderers during the third week of the month.

As before, I hope that the new projects and the regular publishing schedule will help out ALL locals, hometown radicals and market anarchists out to make a point. I can provide nicely printed copies at low cost; and for those who want super-low-cost zines to give away for free or just prefer to DIY, I’ll also be providing regular access to ready-to-print electronic copies to anyone who subscribes, orders or donates to the project. (For details on ready-to-print electronic copies, see below.)

As always, you can order individual copies, sampler packs, or bulk orders for tabling, infoshop-stocking, and other special events. You can also set up a monthly subscription for individual copies, or for bulk packets for distributing through your ALL local, at outreach tables, or through local radical libraries and infoshops. If you’re considering subscribing, you can contact me to request a free sample copy for you to check out, compliments of the Distro; then, if you like it, continue the subscription for the rest of the year at the following rates:

Market Anarchy Zine Series
Delivered each month	Individuals	Bulk Distribution Packets
	$1.50/issue (= $18/year)	No. of copies ✕ 80¢/issue (= N ✕ $9.60/year)
Anarchist Classics Zine Series
Delivered each month	Individuals	Bulk Distribution Packets
	$2.25/issue (= $27/year)	No. of copies ✕ $1.25/issue (= N ✕ $15/year)

For details on all your options (including ready-to-print electronic versions, customization with local contact information, and discounts for quarterly shipments), see Market Anarchy Mailed Monthly.

Prices include shipping & handling costs. If you decide not to continue the subscription, the sample issue is yours to keep. Intrigued? Contact me forthwith and we’ll get something worked out.

2. The Buttons

Second, I am also happy to announce that we have three big new 2.25″ ALL buttons available for order through the Distro. One is a revised version of a button we’ve had since 2009; the other two are brand new designs.

ALL (Libertarian Left). 2.25″ $1.50 for 1; 75¢/ea in bulk

Free Market Anticapitalist (anarchy & solidarity / no bailouts no bosses no bureaucrats) 2.25″ $1.50 for 1; 75¢/ea in bulk

No War No State (think anarchy for peaceful alternatives) 2.25″ $1.50 for 1; 75¢/ea in bulk

Enjoy!

See also:

• GT 2011-03-31: Market Anarchy Mailed Monthly
• GT 2010-02-17: The present anarchy of our commerce: booklets and buttons for March 2010
• GT 2007-11-23: The present anarchy of our commerce: t-shirts

1. ^[1] See, for example, the preface and appendix added by English Warrenites in their edition of the Vindication, The Inherent Evils of All State Governments Demonstrated (1850), or Rothbard’s Note on Burke’s Vindication of the Natural Society (sic). Radical readers of the Vindication have tended to conclude that Burke simply was a proto-Anarchist in 1756, and that he then abandoned the position in the interests of political power. For a convincing argument that the author of the Vindication was really using the anonymous tract as a space to explore ideas that he found compelling, but was not ready to embrace, see Roderick Long’s discussion in Burke’s Semi-Serious Anarchism part the first and part the second. ↩

I’d like to close my remarks with some considerations about why we need to even have this discussion. When a libertarian like Gary or Sheldon comes out for free markets, but against capitalism, he’s often met with the charge that he’s just playing with words, or trying to change the vocabulary of our [sic] message in a misguided ploy to appeal to people who do not share our [sic] economic views.^[1] There is not much to say to that, except to point out that the use of capitalism really is more complicated than that. There are several meanings attached to the word, which have coexisted historically. Those meanings are often conflated and confused with each other, and capitalism₁, the peculiar technical use of the term by pro-capitalist libertarians to refer strictly to free markets — free markets in the very broadest sense, markets as spaces of unbounded social experimentation) is only one of these among many, neither the original use nor the use that’s most commonly used today. Free market anti-capitalists aren’t trying to change anything; we’re using the word capitalism in a perfectly traditional and reasonable sense, straight out of ordinary language, when we use it to describe the political privileges we’re against (capitalism₂) and the nasty structural consequences of those privileges (capitalism₃).

But the worry at this point may be whether it’s even worth it to fight over that particular patch of ground. To be sure, equivocal uses and conflation of terms is a bad thing — it’s important to distinguish the different meanings of capitalism, to be clear on what we mean, and to get clear what our interlocutors mean, when we use the term. But once you’ve done the distinguishing, is it worth spending any great effort on arguing about the label capitalism, rather than just breaking out the subscripts where necessary and moving on? If the argument about capitalism has helped draw out some of the economic and historical points that I’ve been concentrating on in these remarks, then that may be of some genuine use to libertarian dialogue. But once those points are drawn out, aren’t they the important thing, not the terminological dispute? And aren’t they something that nominally pro-capitalist libertarians would also immediately object to, if asked? All libertarians, even nominally pro-capitalist libertarians, oppose corporate welfare, government monopolies, regulatory cartels, and markets rigged in favor of big business. So why worry so much about the terminology?^[2]

I certainly sympathize with the impulse — I’m an Analytic philosopher by training, and subscripting is one of the favorite tools of my trade; if I have to choose between debates about the word capitalism and debates over the state-corporatist interventions I’ve been discussing, I think the latter is always going to be a lot more important. Further, when we are trying to understand what other people have said about markets or capitalism, it’s important to remember that considerations of charity absolutely call for this kind of approach — when a libertarian writer praises capitalism meaning freed markets, or when a libertarian writer condemns capitalism, meaning capitalism₂ or capitalism₃, the best thing to do is just take them on their own terms and interpret their argument accordingly.

But there’s a lot to argue about here that’s not just about labels, and it’s not always clear that that’s something that we all readily agree on. What about when it’s not clear that the writer has really consistently held onto the distinction between free markets and actually-existing capitalism?^[3] What about when we’re not just talking about single positions on isolated policy proposals, but talking about the bigger picture of how it all works — not just the individual pieces but the gestalt picture that they form when fitted together? When, that is, it really starts to matter not only how a writer would answer a list of questions if asked, but also which questions she thinks to ask in the first place — which features of the situation immediately come to mind for analysis and criticism, and which features are kept as background or afterthoughts?

To put a finer point on it, let’s consider not only how we should understand others’ word choices (which calls for interpretive charity, in part, because it’s not up to us), but also how we ourselves should choose words to describe our own position (which certainly is). Rhetoric is a complicated art, and intimately related to the context of the particular conversation you’re having. I haven’t had space in my remarks to survey all the considerations, or even most of the important ones, about the rhetorical question of which meaning of capitalism to favor, or whether simply to abandon the term. But before I leave off, I do want to touch briefly on one consideration — the question of paradigm cases, of what sorts of examples we take as typical, or characteristic, or especially illustrative of what free markets are and how they work.^[4] When we’re looking at the broader picture, at how political and economic structures play off of each other, we’re talking about a structure that has a foreground and a background — more important and less important features. And one of the important questions is not just what may be encompassed by the verbal definitions given for our terminology, but also what sorts of paradigm cases for markets and voluntary society the terminology might suggest, and whether the paradigm cases that it suggests really are good paradigm cases — whether they reveal something important about free societies, or whether they conceal or obscure it. I would argue that identifying a free market position with capitalism — even if you are absolutely clear that you mean capitalism₁, that this encompasses all kinds of market exchange and all kinds of voluntary social experimentation outside the cash nexus — offers a particular picture of what’s important about and characteristic of a free society, and that this picture tends to obscure a lot more than it reveals.

This is where the question of labels and terms move beyond mere semantics, and has some real cognitive import. The question is how we picture freed-market activity — whether our model is something that looks a lot like business as usual, with a few changes here and there around the edges, or whether our model is something radically different, or radically beyond anything that currently prevails in this rigidified, monopolized market. Do we conceive of and explain markets on the model of a commercial strip mall: sanitized, centralized, regimented, officious, and dominated by a few powerful proprietors and their short list of favored partners, to whom everyone else relates as either an employee or a consumer? Or do we instead look at the revolutionary potential of truly free markets to make things messy — how markets, without the pervasive control of state licensure requirements, regulation, inspections, paperwork, taxes, fees, and the rest, so often look more like traditional image of a bazaar: decentralized, diverse, informal, flexible, pervaded by haggling, and kept together by the spontaneous order of countless small-time independent operators, who quickly and easily shift between the roles of customer, merchant, contract laborer, and more?^[5] When we choose a term that is historically so closely attached to workplace hierarchy and big business, and a term which linguistically connected with the business of professional capitalists (that is, people in the business of renting out accumulated capital), this naturally influences the kind of examples that come to mind, fetishizing the business of professionalized capitalists at the expense of more informal and simply non-commercial forms of ownership, experimentation and exchange. It tends to rig the understanding of markets towards an exclusive focus on the cash nexus; and it tends to rig the understanding of the cash nexus towards an exclusive focus on the most comfortably capitalistic — hierarchical, centralized, formalized and businesslike — sorts of enterprises, as if these were so many features of the natural landscape in a market, rather than the visible results of concerted government force.

Freeing the freed market from the banner of capitalism, on the other hand, and identifying markets with the opposition to mercantile privilege, the expropriation of labor, and the resulting concentrations of wealth in the hands of a select class, brings a whole new set of considerations and examples into the foreground. These new paradigm cases for free markets are deply important if they encourage a wider and richer conception of what’s in a market, a conception which doesn’t just theoretically include mutualistic alternatives and social experimentation outside the cash nexus (as some sort of bare possibility or marginal phenomenon), but actually encourages us to see how these forms of free association and exchange might take on a prominent, even explosive role in an economy freed from the rigged markets and many monopolies of state-supported corporate capitalism. The free market anti-capitalist holds that it’s precisely because of those rigged markets that we have the strip mall rather than the bazaar, and precisely because we have the strip mall rather than the bazaar that so many working-class folks find themselves on the skids, confined to ghettoes, caught in precarious situations, and dependent on a highly rigidified capitalists’ market.

Since this cruel predicament is so central to how most people experience the market in everyday life, it’s vital that advocates of free markets take a position that clearly reveals, and marks out as important, different, positive, disruptive possibilities for the kind of free society that we advocate. If we choose terminology that highlights this reality rather than obscuring it, which makes it clear that the problem is not the fact of market exchange but rather the deformation of market exchange by political privilege to actually existing capitalists, at the expense of dispossessed workers, and which suggests paradigms that revolutionary transformations that freed markets without those privileges, we’ll have chosen well.

1. ^[1] Jackson Reeves, quoted by Walter Block in Capitalism Yesterday, Capitalism Today, Capitalism Tomorrow, Capitalism Forever. ↩
2. ^[2] I’d be more happy with this suggestion if it actually seemed to be going both ways — that is, if the people calling for us to move away from mere semantics actually were willing to split the difference and let each side have their terminology, as long as they are clear about it. What actually tends to happen, though, is that nominally pro-capitalist libertarians often use complaints about semantics to insist that readers understand what they mean by capitalism (capitalism₁), but then turn around and start bickering as soon as some nominally anti-capitalist writer uses capitalism as a term of criticism, rather than actively trying to figure out whether they might be criticizing capitalism₂ or capitalism₃, or showing any willingness themselves to subscript and move on when it’s a question of appreciating what nominal anti-capitalists might be saying with the terminology that they are accustomed to use. Without that willingness, the complaints about semantic arguments look more opportunistic than principled, and that suggests that there may be something more at stake here than the complainants would like to let on. ↩
3. ^[3] For examples, see the critical discussion in Roderick Long (2008-11-10) Corporations Versus the Market, Kevin Carson, Vulgar Libertarianism Watch, Part 1 et seq., GT 2005-03-23: El pueblo unido jamás será vencido! etc. ↩
4. ^[4] In grammar, a paradigm (from the Greek, to show beside) is an illustration of a grammatical rule by using an example — e.g. when a student learning Spanish is taught how to conjugate -ar verbs by giving her the a series of parallel examples (hablar: hablo, hablas, habla, hablamos, habláis, hablan; tomar: tomo, tomas, toma, tomamos, tomáis, toman, etc.); the purpose of the examples is to illustrate the principle so that the student can apply it by analogy with other stems. ↩
5. ^[5] The images of the strip mall and the bazaar are taken from my concluding paragraph in Scratching By: How Government Creates Poverty as We Know It. Those images were inspired by and modified from Eric Raymond’s use of The Cathedral and the Bazaar to explain and defend hacker culture and open-source software. ↩

I’ve spent a fair amount of time in these remarks discussing the general outlines of the thesis that the cash-nexus is artificially expanded, and forcibly deformed, into the patterns of actually-existing capitalism, by means of government privilege to big players; and discussing the many monopolies (once the Big Four; now the Big Nine, at least) that provide some of the most pervasive and intense points of force that dispossess working people, favor big, centralized forms of business, and coercively favor capitalistic, formalized, commercialized uses of resources over non-commercialized alternatives.^[1] One of the objections which may have occurred to you by now is that government intervention in the economy goes in more than one direction. It may be true that the monopolies Tucker and I have named tend to benefit entrenched players and conventionally capitalistic arrangements. But what about government regulations that benefit poor people (such as government welfare schemes) small players (such as, say, Small Business Administration loans), or which are supposed to regulate and control large-scale, concentrated forms of enterprise (such as antitrust legislation)?

I would respond, first, that this kind of response seems to suggest an unusual faith in the efficacy of government regulation and welfare state programs to achieve their stated ends. In fact, as I’ve already suggested, much of the “progressive” regulatory structure, supposedly aimed at curbing big business, has largely served to cartelize big business, and to create large fixed costs which tend to drive out potential competitors from the rigged markets in which they have entrenched themselves. Historical work by Gabriel Kolko (in The Triumph of Conservatism) and Butler Shaffer (In Restraint of Trade) has, I think, convincingly shown that these regulatory measures mainly served to rigidify the positions of existing market incumbents and to bail out failing cartelists so as to prevent freedom from disrupting a well-regulated market. And there are good a priori reasons – from the public choice analysis of the incentives faced by politically-appointed regulators — to believe that such regulatory efforts will always be highly prone to capture by the concentrated interests of market incumbents, to be wielded against the dispersed interests of consumers, workers, and would-be start-up competitors.

Second, it is important to keep in mind questions of priority and scale. While I object to SBA loans, antitrust legislation, social welfare programs, and other government interventions as much as any other free marketeer, I think that in this age of trillion-dollar bank bailouts it ought to be clear that, even if government is putting its finger on both sides of the scale, one finger is pushing down a lot harder than the other.

You may also be concerned that I have had so little to say, so far, about some of the conventional explanations that free market economists have offered for the efficiency and scalability of capitalistic arrangements – arguments based, for example, on the division of labor, or on economies of scale, or the gains from trade. But I am not denying the value of either the division of labor, or gains from trade; I am suggesting that labor and trade might be organized along different lines than they are currently organized, in alternative forms of specialization and trade such as co-ops, worker-managed firms, or independent contracting, with comparatively less centralization of decision-making, less hierarchy, less management, and, in many cases, more trade and entrepreneurial independence among the workers involved. Centralized, capitalistic forms of organization are only one sort of cash nexus among many others. And the cash nexus itself is only one way of facilitating a division of labor and a mutually-beneficial exchange can take place; returning to the broader sense of markets as a space of social experimentation, there are all kinds of other social experiments, not necessarily based on quid pro quo exchanges or on cash media, that provide places for people to meet, work and swap.

It is also common for pro-capitalist libertarians to point to economies of scale as an economic reason for believing that large, centralized corporations, industrial agribusiness, et cetera would survive even without the government subsidies and monopolies they currently enjoy. But while I’d hardly deny the importance of economies of scale, I think it is important to remember that economies of scale represent a trade-off between gains and losses. There are diseconomies of scale, just as there are economies of scale – as scale increases, so do the costs of communication and management within the larger workforce, the costs of maintaining heavier equipment, the difficulty of accounting and efficiently allocating resources as more transactions are internalized within the firm, and the difficulty of regearing such a large mechanism to respond to new challenges from new competitors and changing market conditions.^[2] The question is not whether or not there are economies of scale; there are, and there is also a point at which the economies of scale are outweighed by the diseconomies. The question is where that point is; and whether, in a free market, the equilibrium point would tend to shift towards smaller scales, or towards larger scales. When government monopolies and rigged markets artificially encourage large, consolidated, bureaucratic forms of organization — organizations which can better afford the high fixed costs imposed by regulatory requirements, can better lobby for subsidies, can better capture regulatory bodies and use them to advance their own interests, etc. — that shifts the balance by forcing up the rewards of scale. When the same measures punish small competitors in favor of market incumbents, and especially when it punishes informal, small-scale community or personal uses of scarce resources, in favor of formalized commercial uses, government forcibly pushes the diseconomies of scale down, by suppressing competitors who might eat the eggs of the political-economic dinosaurs. In both cases, the most pervasive and far-reaching forms of government economic intervention tend to deform economic life towards formalization, commercialization, consolidation, hyperthyroidal scale and the complex hierarchy that’s needed to manage it. Not because these things are naturally demanded by economies of scale, but rather because they grow out of control when the costs of scale are socialized and the competitive pressures and alternatives burned out by government monopoly.

1. ^[1] For more on the last point, see Three notes for the critics of the critics of apologists for Wal-Mart. ↩
2. ^[2] For a detailed discussion of the diseconomies of scale, see Kevin Carson (2007), Economic Calculation in the Corporate Commonwealth. ↩