• Everybody Run, Uncle Grady Has a Gun. Roderick, Austro-Athenian Empire (2010-05-10). The following letter appeared in today's Opelika-Auburn News. (I've restored my original paragraphing, which was altered seemingly at random.) To the Editor: Bob Sanders wonders (May 8th) why we would fear Uncle Grady the tax assessor. Surely the answer is: because Uncle Grady's edicts are ultimately backed up by threats… (Linked Monday 2010-05-10.)

• Reviewing Like It's 2007. rechelon, Human Iterations » Non-Aggression And The Goddamn Primmies (2010-05-10). Communism Reconstituted as Psychotherapy: The Coming Insurrection Everyone knows.  It's really nothing new.  Their attack on Green Capitalism is delicious, while their advocacy of "communes" is without substance, tacked on and arguably specious.  There's a lot of language in it specific to the European intellectual scene.  Honestly, it's a bit… (Linked Monday 2010-05-10.)

I concluded my earlier remarks on rigged markets and captive markets by offering this quick gloss on the free-market anti-capitalist thesis: that the recognizable patterns of capitalist economics result from the fact that certain key markets – importantly, the labor market, housing rental market, and other key markets are rigged markets – and in particular, indirectly-created captive markets, in which working-class folks in need of houses or jobs are driven into a market where they are systematically stripped of resources and alternatives, faced by artificially high costs, and generally constrained to negotiate with incumbent market players who have been placed in an artificially advantageous position over them through repeated government interventions in their favor.

Claims like this – that big government tends to disproportionately benefit big business at the expense of ordinary workers, by creating rigged markets and concentrating access to resources – may be controversial in libertarian circles now; but they are hardly unusual in the long view of libertarian history. Before the 20^th century coalitions against the New Deal and Soviet Communism, libertarian writers, from Smith to Bastiat to Spencer, had little interest in tailoring their politics to conservative or pro-business measurements. They frequently identified capitalists, and their protectionist policies, as among the most dangerous enemies of free exchange and property rights. The individualist Anarchist Benjamin Tucker, writing in 1888,^[1] called for Absolute Free Trade ... laissez faire the universal rule, while describing this doctrine of complete laissez faire and free competition a form of Anarchistic socialism. Let’s bracket discussion of that semantic decision for the moment; the important contribution is Tucker’s identification and analysis of four great areas where government intervention artificially created or encouraged class monopolies – concentrating wealth and access to factors of production into the hands of a politically-select class insulated from competition, and prohibiting workers from organizing mutualistic alternatives. The Big Four monopolies Tucker identified as central to the Gilded Age economy were:

1. The Land Monopoly – government concentration of ownership of land and natural resources through the enforcement of legally-fabricated land titles (such as preferential land grants to politically-connected speculators, or literally feudal land claims in Europe). Since Tucker, the land monopoly, already key to the Gilded Age economy, has radically expanded – with the frequent nationalization of mineral and fossil fuel resources throughout, and the emergence of local zoning codes, complex housing construction codes, land-use restrictions, "Urban Renewal," municipal "development" rackets and Kelo-style eminent domain seizures, and a host of local policies intended to keep real estate prices high and permanently rising. In a freed market, land ownership would be based entirely on labor-based homesteading and consensual transfer, rather than on military conquest, titles of nobility, sweetheart "development" deals, or eminent domain seizures, and land would tend (ceteris paribus) to be more widely distributed, with more small individual ownership, dramatically less expensive, with more ownership free and clear, and could as easily be based on sweat equity and homesteading of unused land, without the need for any commercial cash exchange.

2. The Money Monopoly – government control over the money supply, artificially limiting the issue of money and credit to a government-approved banking cartel. Tucker saw this as the source of both monopoly profits for the incumbent banks, and the artificial restriction of access to capital to those large, established businesses which the large, established banks preferred to deal with, while suppressing competition from mutual credit associations and other means by which workers might be able to pool their own resources and access credit on more advantageous terms than those offered by commercial banks. Tucker, in 1888, was writing about the Money Monopoly before the Federal Reserve or the conversion to a pure fiat currency, before the SEC, FDIC, TARP, banking holidays, bailouts, or the myriad other means by which government has insulated big bankers and financiers from market consequences, or erected regulatory barriers to entry which insulate politically-approved business models from market competition.

3. The Patent Monopoly – government grants of monopoly privileges to patent-holders and copyright holders. Tucker argued that patents and copyrights did not represent a legitimate private property claim for their holders, since it did not protect any tangible property that the patent-holder could be deprived of, but rather prohibited other market actors from peacefully using their own tangible property to offer a good or service that imitated or duplicated the product being offered by the holder of the so-called Intellectual Property. These prohibitions, enforced with the explicit purpose of suppressing market competition and ratcheting up prices, in order to secure a long period of monopoly profits for the IP-holder, now constitute more or less the entire business model of Fortune 500 companies like General Electric, Pfizer, Microsoft, or Disney, and have only gotten longer and harsher in their legal sanctions, as IP monopolists have insisted on the need for more and more insulation from free market competition.

4. The Protective Tariff – Tucker identified the tariff as a monopoly in the sense that it artificially protected politically-favored domestic producers from foreign competition. While the tariff has declined noticeably in political and economic importance since the 1880s, tariffs remain a distorting force within limited domains (for example, agriculture), and the specific mechanism of import tariffs is much less important, for Tucker’s purposes, than the overarching aim of protecting connected incumbents – whether through tariffs on incoming foreign goods, export subsidies to outgoing domestic goods, through political manipulation of fiat currency exchange rates, or through other means.

As I’ve tried to indicate, Tucker’s Big Four remain pervasive, and at least three of those four have in fact dramatically expanded their scope and invasiveness since Tucker’s original description of them. If we were to try to make a similar list of all the major ways in which local, state, federal and foreign governments now intervene to protect incumbent interests and place barriers to entry against potential competitors, there’s no knowing how many monopolies we’d be dealing in; but I think that there are at least four new major monopolies, in addition to Tucker’s original four, which are worthy of special notice for their pervasiveness and importance to the overall structure of the state-regulated economy.

First, the agribusiness monopoly: since the New Deal, an extensive system of government cartels, subsidies to ratchet up prices for sale in American markets, more subsidies to artifically lower prices for export, surplus buy-up programs,^[2] irrigation projects, and the like have tended to ratchet up food prices for local consumers, to make importing and exporting produce over tremendous distances artificially attractive, to distort agricultural production towards the vegetable and animal products that can most successfully attract subsidies and government support projects, to favor large-scale monocrop cultivation over smaller-scale farming, and generally to concentrate agriculture into factory farming and industrialized agribusiness.

Second, the security monopoly: because of government’s massive expansion of standing military forces, and paramilitary police forces, the past century has seen the creation of a gigantic industry full of monopsonistic, government-driven rigged markets, with nominally private companies subsisting largely or entirely on tax-funded government contracts – companies like Lockheed-Martin, General Dynamics, Raytheon, the rest of the military-industrial complex, and the growing number of companies (such as Taser) who cater primarily to government police forces or other Homeland Security agencies.

Third, the infrastructure monopoly: that is, federal, state, or local government monopolization, tax subsidies, and allocation of access to transportation and communications infrastructure. So, for example, the monopoly offers a benefit to big-box retailers like Wal-Mart, whose business models are enabled by, and dependent on, government subsidies to road-building and maintenance, and the resulting artificially low costs of long-haul trucking. Similarly, incumbent media companies have built empires in part because access to broadcast bandwidth has been restricted and politically allocated through the FCC, while access to cable, telephone, and fiber-optic bandwidth has been tightly controlled and restricted through local governments’ monopoly concessions to incumbent cable and telecommunications companies.

Fourth, we might add regulatory protectionism: the proliferation of commercial regulations, government bureaucracy and red tape, business license fees, byzantine tax codes, government-enforced professional licensure cartels and fees (for everything from taxi-driving to hair braiding to interior design) – all of which, cumulatively, tend to benefit established businesses at the expense of new upstarts, to protect those who can afford the fees and lawyers and accountants necessary to meet the requirements from competition by those who cannot, and generally to the poor out of enterpreneurial opportunities, independent professions and more autonomous alternatives to conventional wage labor.

In addition, we should also mention the structural effects of mass criminalization, incarceration, and deportation of socially or economically marginalized people. Activist libertarians have often condemned, on a moral level* the government’s War on Drugs, or Border Apartheid, or other government efforts to criminalize the poor and subject them to imprisonment for victimless crimes. As well they should — these government wars are nothing more than massive violence and cruelty directed against innocent people. But there has not yet been enough recognition of the structural, economic by-products of government policies which, for example, lock 1 out of every 3 African-American men in a cage, potentially for years at a time, taking away years of their working life and permanently stigmatizing them as they try to reenter the labor market and civil society, or which constantly threaten undocumented immigrants with the threat of arrest, imprisonment, and exile from their homes and livelihoods. Such massive government violence, dispossession, and constraint on livelihoods is sure to have massive impacts on the conditions under which many poor and legally-vulnerable people enter into labor markets, housing markets, and all other areas of economic life.

This is, of course, only the beginning. You could easily subdivide some of these monopolies into smaller monopolies; and there are no doubt many more broad classes of monopoly which could be mentioned. But I think that Tucker’s Big Four, which are still present and have mostly grown in their size and importance since Tucker’s day, and these new Big Five, alongside them, get us a lot closer to understanding why so many markets work the way they work. They are, in any case, enough to make the point, and also to raise some likely objections from conventionally pro-capitalist libertarians, which we had better deal with before we spend too much time elaborating on the subject.

I’ll be turning to some of those objections in the next instalment.

1. ^[1]State Socialism and Anarchism: how far they agree and wherein they differ↩
2. ^[2]In particular, the USDA’s massive buy-up programs for school lunches and the military.↩

The government-installed administration at the University of Nevada at Las Vegas says that, what with the current round of massive state budget cuts, and the threat of future cuts one or two years down the line, they don’t have enough money to teach classes in unpopular majors. (Based on recent decisions from administrative committees, UNLV’s — excellent, but small — Women’s Studies program, among others, might just barely manage to escape the axe. For this round of budget cuts.)

But apparently they do have enough money to build a big memorial to dead government soldiers.

Of course they do; it’s a matter of priorities. When the allocation of money for the University is political, it’s always going to favor what’s politically popular over what’s educationally important. And there’s nothing more politically popular than Patriotically Correct monuments to dead government soldiers.

This is, of course, exactly why UNLV should be liberated entirely from government appointments of administration and from the government strings attached to government funding.

Supporters of the Women’s Studies department, and of academics at UNLV broadly, often view the prospect of privatization of the University with horror. I don’t–because if privatization just means turning UNLV over from governmental ownership to non-gvernmental ownership, that could mean a lot of different things. I understand the reaction, if they are thinking of the kind of legislative privateering where the University simply being sold off to the best-connected corporate bidder. What I think is that the University doesn’t belong to the state government in the first place, and so the state government has no right to sell it to anyone; it belongs to the students and the faculty who use it. And privatizing, or if you prefer socializing it, directly into the hands of the campus community is the only just way to dispose of the University.^[1] It’s also the best thing that could possibly happen to education at UNLV. As long as a government-imposed administration is in charge of UNLV, UNLV will be about serving the priorities of administrators, and serving the priorities of the government. UNLV will be about learning and teaching when it’s controlled by learners and teachers; the sooner we end the government occupation of campus, the better.

NV out of UNLV!

See also:

• GT 2007-11-08: Sprachkritik: Privatization
• GT 2004-06-07: Property to the People: the Leftist Case for Privatization

1. ^[1]Of course, a plan like that — just handing the University for free over to those who work and study in it, with no political strings attached, instead of coming up with some scheme to create a subsidized sale to an bureaucratic efficiency-minded corporate management, with lots of lingering state control over what they can do — is almost certainly something that will never come out of a committee of the state legislature. Or rather, it’s something that will never come out of a legislative committee unless they are forced to it by events on the ground. If it’s going to come about, it’s something much more likely to come about by a strategy of campus organizing, concerted strikes by faculty, staff, and students, and student occupations of buildings and facilities, aimed not at legislative influence in Carson city, but at asserting effective physical and cultural control over the campus. But I see the need for people-power tactics, instead of bureaucratic gamesmanship and legislative lobbying, as an advantage of my proposal. Not a weakness.↩

It’s a beautiful Sunday in May, and Shamelessness is in the air.

I’ve been working away in the scriptorium this week, not as diligently as I like, but diligently enough that some things long-planned are beginning to come to fruition. You probably know that the Bits & Pieces on Free Market Anti-Capitalism are coming out (and will continue to come out over the upcoming week). What you may not know, unless you specially follow it, is that I’ve also been steadily at work over at the Fair Use Repository. In particular, I’m happy to announce that, as I suggested I might last week, I’m now happy to announce that the complete text of the November 1914 issue of Mother Earth is now available online at fair-use.org. In particular, if you haven’t yet, I would recommend taking a look at Guy Aldred’s essay That Economic Army (a reprint from the Spur). The obvious aspect of the essay is a long tirade against the hypocrisies of Labour Party politicians and trades unionists who are long since dead. But whether the polemic entertains you or not, underneath it there is also a really interesting analysis of how the pressure of state capitalism seizes and deforms individual people, and entire industries, into gears for the war machine, through what Aldred calls economic conscription, and how this constructs and confines their interests so as to create a shared interest in perpetuating war. (The question of course is how to become the sand in the gears, instead of the oil.) This next week, I’ll be working some more at Mother Earth and Liberty, and completing the first run of Bits & Pieces (that is, getting through the material that was actually presented at the APEE panel), and hopefully coming back around to some related commentary. Also got a big pile of contact information from the last couple weeks’ A-Cafes that needs to be processed.

That’s my Shamelessness for the week. What about y'all? What have you been up to this week? Write anything? Leave a link and a short description for your post in the comments. Or fire away about anything else you might want to talk about.

Like I said in the previous instalment, one of the things that we need to do, and don’t do often enough, is to carefully distinguish the broad meaning of markets as the sum of all voluntary exchanges, and the narrow meaning, and connotations, of markets as the cash nexus, and the particular forms of relationship and mediation which that brings along with it. The importance of consensual society, to any libertarian theory worthy of the name, is obvious. But the social and economic value of the cash nexus, as a social relationship, depends entirely on the context. What is positive and productive in a context of free exchange easily becomes an instrument of alienation and exploitation when it is forced on unwilling participants through government coercion.

In particular, for free-market anti-capitalists, there are at least three specific mechanisms we might mention — mechanisms that are especially important and especially pervasive, by which incumbent big businesses, and capitalistic arrangements broadly, benefit from rigged markets, at the expense of workers, consumers, taxpayers, and mutualistic alternatives to the statist quo:

1. Government monopolies and cartels — in which government penalties directly suppress competition or erect effective barriers to entry against newcomers or substitute goods and services;

2. Regressive redistribution — in which property is directly seized from ordinary workers by government expropriation, and transferred to economically powerful beneficiaries, in the form of tax-funded subsidies and corporate welfare, taxpayer-backed sweetheart loans, Kelo-style eminent domain transfers, &c.; and

3. Captive Markets — in which demand for a good is created, or artificially ratcheted up, by government coercion — which can mean a direct mandate with penalties inflicted on those who do not buy in; or a situation in which market actors are driven into a market on artificially disadvantageous terms as an indirect (perhaps even unintended) ripple-effect of prior government interventions.

As an easy example of a directly-imposed captive market, consider the demand for corporate car insurance. When state governments mandate that every driver to purchase and maintain car insurance from bureaucratically-approved insurance companies, they necessarily shrink the scope of voluntary exchange, but they also dramatically bulk up a particular, fetishized form of cash exchange – by creating a new bill that everyone is forced to pay, and a select class of incumbent companies with easy access to a steady stream of customers, many of whom might not pay for their services but for the threat of fines and arrest. As an example of an indirectly-imposed captive market, consider the demand for professionally-certified accountants. CPAs perform a useful service, but it’s a service that far fewer people, and indeed far fewer businesses, would need, except for the fact that they need help coping with the documentation and paperwork requirements imposed by the government’s tax code. A CPA is essentially someone trained in dealing with financial complexity, but finances are much more complex than they would be in a free society precisely because of government taxation and the bizarre requirements and perverse incentives tend to make things much more complex than they would otherwise be. Although government has no special interest in benefiting the bottom line of CPAs, it is nevertheless the case that CPAs are able to get far more business, and at a far higher rate, than they would in a market without income tax, capital gains tax, sales tax, and the myriad other taxes that demand specialized expertise in accounting and interpretation of legal requirements.

A quick way to gloss the free-market anti-capitalist thesis, then, is that we hold that many of the recognizable patterns of capitalist economics result from the fact that certain key markets – importantly, the labor market, housing rental market, insurance and financial markets, and other key markets are rigged markets. And, in particular, that they are often indirectly-created captive markets, and that the extent to which these needs are met through through conventionally commercial relationships under the heading of the cash nexus — rather than being met through other, possibly radically different sorts of social relationships, like co-ops, homesteading, sweat equity, informal exchange, loosely reciprocal gift economies, grassroots mutual aid networks, and other mutualistic alternatives — has little to do with people’s underlying desires or preferences, and a great deal to do with the constraints placed on the expression of those desires or preferences. Commercial relationships and the cash nexus grow fat because working-class folks in need of houses or jobs are driven into a market where they are systematically stripped of resources and alternatives, where they are constantly faced by artificially high costs, and where they are generally constrained to negotiate with incumbent market players who have been placed in an artificially advantageous position over them through continuous government interventions in the incumbents’ favor.^[1]

1. ^[1]See also Scratching By: How Government Creates Poverty as We Know It.↩