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Posts tagged State capitalism

Alexander Hamilton and the birth of American state capitalism

The most recent issue of the Boston Review has an interesting article from William Hogeland on Alexander Hamilton and his recently-acquired fan club among the court intellectuals of the Beltway Consensus — with Hamilton’s recent biographers and neo-conservativecreepy spendthrift fascist David Brooks at the fore. The article is almost entirely right-on; here’s one of the most important parts, on the political economy that was brought forth in the early Constitutional period, through the ministrations of the newly empowered central government:

David Brooks, for his part, embraces the thrust of Hamilton's finance plan, writing that Congress's decision to fund the federal debt at Hamilton's urging formed the basis of the fluid capital markets that are today the engine of world capitalism. The quick-and-dirty textbook version is that Hamilton gave the country sound credit. What that means is rarely made explicit: the first treasury secretary found ways to support, at all costs, the federal bondholders whom he and Morris had been frustrated in supporting in the 1780s. In 1791 Hamilton finally got the U.S. Congress to commit to paying reliable interest on its debt instruments, halting both their face-value depreciation and the free-for-all speculation in them, making them articles of rational trade in high-finance marketplaces. (Following British models, Hamilton also used proceeds of the U.S. Post Office to create a sinking fund; such funds were dedicated to paying down each issuance of a public debt, making bonds reliable.) Hamilton's idea, bold and creative, was to let the government get its hands on easy money by letting bondholders and traders grow American fortunes lending that money.

Brooks also associates Hamilton's authorship of modern capitalism with what historians call assumption: Hamilton persuaded Congress to assume the states' war debts in the federal one, thus swelling the federal obligation to massive proportions. But that idea wasn't original with Hamilton, and by overlooking its history Brooks and other Hamiltonians obscure its purposes. Robert Morris too had wanted the Confederation Congress to assume state debts, placing all public debt in federal hands and making it so big that federal taxes would have to be levied to pay interest on it. That dream came true when the U.S. Congress, having agreed to assume state debts, ran up a deficit, as Hamilton was happy to report in December of 1790.

A new tax, Hamilton told Congress, was the only way to solvency. He proposed not only expanding duties on imports (the old, embattled impost had finally been passed in the first session) but far more significantly, he urged Congress to impose the first federal tax on an American product. Just as Morris had hoped, assumption of state debts had become the wedge for opening the purses of the people, enforcing domestic federal taxation to support federal bondholders. In fact, passing a federal domestic tax (on distilled liquor, a fact that has helped obscure its real purpose) was so important that in the first funding proposal he submitted to Congress Hamilton appended a fully drafted bill. It was characteristically Hamiltonian (and reminiscent of health-care-reform-era Hillary Clinton), replete with distilling and tax-policy minutiae and overwhelmingly, even patronizingly, thorough, with every loophole closed, every question pre-answered, every problem sure to be caused by Congress's financial ineptitude solved. The bill was controversial, and Hamilton's patience must have been tried when Congress, seeming to bumble, passed funding and assumption yet ignored the whiskey tax—the brilliant law that would pay for them. But he was becoming a politico. In reporting the deficit, he calmly referred Congress back to the tax law he'd already written for them almost a year earlier. They were politicos too. They passed it—now that they had to—almost unmodified.

The structure of that tax sharply qualifies assertions made by Brooks and others that Hamilton wanted government power to enhance opportunity, mobility, and democracy. The reasons Hamilton gave Congress for going beyond a foreign impost and imposing domestic taxation are telling, both for what he said and for what he left unsaid. In the same 1790 report Hamilton reminded Congress that merchants, naturally, paid import duties, and that since merchants had always been the class most committed to American nationhood, taxing them further would be onerous and disaffecting; hence the need for a new tax not on imports but on a domestic product. What he did not explicitly point out was that the merchant class was also the bondholding class: they'd long been nationalists because federal power—the very kind Hamilton was wielding now—had long seemed to be where their interest lay. Today we might expect investors to be content with steady, tax-free income (there was, of course, no income tax). For Hamilton, shoring up and concentrating bondholders' wealth meant paying that income with funds drawn not from the small bondholding class but from a tax collected from the large class of people who would never own a bond. And he structured the tax around aspects of the distilling process itself, so that big-time distillers (industrialists, members of the bondholding class) would be charged a lower tax while small-time producers (people engaged in a wide variety of work as farmers and artisans, with whiskeymaking often their sole source of cash and credit) would be charged a substantially higher tax, in many cases a crushing one. It was no accident. The bill was modeled on a series of whiskey taxes passed by British governments. Driving small and occasional producers out of business served imperial economic aims of efficiency and consolidation. In the same year that Congress passed Hamilton's whiskey tax, the Irish Parliament stopped merely dis-incentivizing small distilling, and made it illegal to operate a still of less than 500-gallon capacity.

Hamilton wanted to turn the country into an efficient global competitor. As he would argue before Congress in his famous 1791 Report on Manufactures (which was far less successful than his funding plan but just as eager to stun all comers with its depth of research on hemp, nails, hats—wool hats, fur hats, and also fur-and-wool hats—and so on), labor power should not be dissipated in small, generalist farms and one-man artisan shops but efficiently marshaled, stabilized, and deployed on commercial farms and in factory towns like the one he founded in Paterson, New Jersey. And of course he wanted to use federal power to achieve that national vision.

The effect of the whiskey tax was precisely to render American distilling efficient through consolidation bordering on cartelization: even as the tax threatened to ruin small producers, Hamilton busily restructured army buying practices to make it impossible for small distillers to sell to army commissaries. In western Pennsylvania, where small distillers had managed to gain an economic toehold, Hamilton went even further: he made the region's richest, largest-scale distiller the federal tax collector. Paid both a federal salary and a commission on what he took from his less successful neighbors, and charged with enforcing the federal tax that directly benefited his business, this distiller/collector had close relatives—again, federally commissioned, correspondents of both Hamilton and Washington—in the commissary office of the local army post. Business was sewn up.

Brooks routinely characterizes Hamilton's use of federal power as intended to spur competition and furnish opportunity. But the control of business near the Ohio headwaters by a government-connected family and its pals was a direct consequence of Hamilton's policy, and it was anything but unintended. Government is really bad at rigging or softening competition, Brooks has written by way of praising Hamilton's economic policies. Yet the rigging inherent in Hamilton's tax aggravated ordinary people's existing problems. Farmers and artisans who were losing their weak grip on economic well-being and falling into foreclosure, as federally connected commercial farmers, Eastern real-estate speculators, and entrepreneurs in brick, glass, iron, and other rising industries—the sort Hamilton always said he wanted to promote—bought up more and more of the best Western land. Descendants of the pioneers who had cleared the land found themselves working as day laborers in the factories of their creditors, which was anything but a bleak outcome by Hamilton's reckoning.

Thus did the first federal domestic tax—linchpin to Hamilton's finance plan, culmination of nationalists' decade-long efforts to unite the country, first step in making the American economy a global competitor—operate regressively, comprehensively, and deliberately. Its avowed purpose of wealth concentration and industry consolidation was intended to restructure the country along the modern American lines now hymned by so many neo-Hamiltonians. Such extreme and systemic results can't be what Jason Bordoff and others at the Hamilton Project mean to support by invoking Hamilton's legacy. But it is what Morris meant by opening the people's purses, and it's what Congress made law, at Hamilton's behest, in 1791.

In his June 8 column, Brooks pits his Hamiltonians against modern populists who want, he says, to fundamentally rewrite the rules and obstruct policies they see as benefiting only the rich. He would brand as populists the many former foot soldiers of the Revolution who rose up against the whiskey tax—the so-called whiskey rebels. To them, American independence now seemed to have been gained for the exclusive benefit of a military-industrial cartel run by and for the privileged and staffed by the well-connected. Western Pennsylvania populists wanted a fair shot at modern America too. They wanted access to cash and credit. They wanted to grow their businesses. They were not anti-tax. They were against taxes that straitjacket markets, restrict opportunity, reduce competition, punish small operators, cripple local economies, and offer government cronies bonanzas at the direct expense of other citizens. Most important, they were against what they called taxes that don't operate in proportion to property.

At least that's what they said they were against, in published resolutions, letters, and petitions. Brookhiser and Chernow caricature them as drunk hillbillies (Brookhiser) whom scholars study merely because they are colorful (Chernow). But the essential fact remains that, during the nation's formative years, the explicit idea that an essential promise of republican democracy lies in fostering opportunities for economic advancement and upward mobility is found not in Hamilton's funding plan, but in the resolutions of the ordinary people who became whiskey rebels.

So how have neo-Hamiltonians managed to remake Hamilton in their own image, diminishing his outrageous charisma and ruthless political intelligence in the process?

One way today's Hamiltonians connect their hero's economics to the American Dream is through the needle's eye of his disadvantaged background and remarkable success. Hamilton came from nothing, Brooks wrote in his New York Times Magazine piece, and spent his political career trying to create a world in which as many people as possible could replicate his amazing success." Or, as one of the PBS talking heads informs viewers, Hamilton believed that "if you worked hard, you should get ahead.

It's more likely that Hamilton believed exceptional, bright boys like him should erupt like meteors across the night sky. Blending creative genius with an almost mad degree of thoroughness and tenacity, he strove to dominate everyone he encountered, a quality that brought enormous success but also marred his life and may have shortened it. The idea that Hamilton spent his career trying to create conditions for replicating such a rise seems fantastic. One searches his letters and public statements in vain for thoughtful reflection on ordinary families' economic struggles or respect for their goals and hopes for their children's betterment. He is unconcerned about using government power to encourage the rise of laborer's descendants and would not have related upward mobility to democracy—a dirty word to Hamilton.

Brooks cites remarks from Report on Manufactures as evidence of Hamilton's hope that people would advance socially by moving from agrarian scatteredness to industrial centralization. When all the different kinds of industry obtain in a community, Hamilton argued, each individual can find his proper element. He also defined as a goal of industrial policy to cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise. Where many founders were farmers and planters, Hamilton (like Franklin and Samuel Adams) was an urbanite, and he made an appealing case for the creative synergy to be found in cities. He certainly wanted people mobile enough to get off the farm, out of the artisan shop, and into the mill, and he had a forward-looking fondness, at once emotional and practical, of encouraging meritocracy over aristocracy in responsible government positions.

But it is a feat of intellectual acrobatics to ascribe to Hamilton, on the basis of these remarks, a broad policy of encouraging, much less sustaining, widespread upward social mobility through hard work among succeeding American generations. For Hamilton, the hard work/get ahead equation, which revivalists want to call a democratic legacy, applied only to the sort of people he deemed it wise to encourage. He had cogent national and financial reasons for carefully dismantling the few ways—which already involved manufacturing and selling—that people had of getting ahead. They involved consolidating land, money, opportunity, and power in the West, while obstructing both mobility and democracy. He was explicit about this.

Chernow, straining to detect Hamilton's sympathy for the impossible difficulties faced by the debtor class, misreads a minor Federalist essay, number six. He suggests that Hamilton felt sorry for Daniel Shays, leader of a 1787 debtor uprising in Massachusetts, arguing that federal assumption of state debts was intended to relieve small-farming debtors. While it's true that Hamilton objected to vacillations from leniency to aggressiveness in Massachusetts finance policy, his essay as a whole makes clear his disdain for the vaunting ambition and criminal tendencies of all such as Shays, on whom he lays personal blame for the anti-creditor movement sweeping the western part of the country, the real basis and wide scope of which Hamilton always impatiently declined to acknowledge.

To the extent that he thought about it at all, Hamilton wanted people to stop talking nonsense about their own economic aspirations and get ahead his way and his way alone, by becoming efficiently organized laborers and farm workers for the financiers and industrialists. If people wouldn't do that, he'd make them.

— William Hogeland (2007), Inventing Alexander Hamilton, in Boston Review (November/December 2007)

Privateering illustrated

This sort of thing is precisely what state Leftists constantly use to indict privatization, and extend into a general denunciation of free market ideology — even though it’s actually just government outsourcing, not free markets, and even though the obvious recklessness, criminal incompetence, nepotism, cronyism, corruption, and brigandry of the private-public partnerships in question are all the direct and obvious result of the way in which these contractors are still firmly attached to the political processes of expropriation, redistribution, and sovereign immunity within a bureaucratic, monopolistic State apparatus. In short, a perfect illustration not of free markets or the socialization of the means of production, but of the crudest and most ruinous forms of tax-funded privateering.

Urban homesteading

So, I have an essay coming up in next month’s Freeman (thanks to the encouragement and editorial efforts of the indefatigable Sheldon Richman). It’s called Scratching By, and the theme is to explain how it’s not the free market, but rather the State, in its role as the invisible fist of corporate capitalism, that creates the material predicament faced by poor folks in American cities. One of the topics that I touched on there, and which I mentioned before in my comments on the South Central Farmers, is government control and planning of inner-city land use. Government regimentation of land squeezes poor people economically; perhaps more importantly, it also keeps them permanently in hock to, and at the mercy of, a select handful of politically-connected developers and slumlords. Last week, Women of Color Blog (2007-11-09) alerted me to the latest example: HUD’s continuing refusal to let New Orleans public housing residents return to their old homes, even two years after the fact. All for their own good, of course, whether or not they happen to think that they are best off living as permanent refugees. The plan is to begin demolishing the homes, now forcibly kept vacant, in order to make room for government redistribution of the land to connected developers for the usual urban renewal projects.

A major human rights crisis exists in New Orleans and the Gulf Coast. It is a crisis that denies the basic rights to life, equality under the law, and social equity to Black, Indigenous, migrant, and working class communities in the region. While this crisis was in existence long before Hurricane Katrina, the policies and actions of the US government and finance capital (i.e. banking, credit, insurance, and development industries) following the Hurricane have seriously exacerbated the crisis.

One of the clearest examples of this crisis is the denial of the right to housing in New Orleans, particularly in the public housing sector. Since the Hurricane, the US government through the Department of Housing and Urban Development (HUD) has denied the vast majority of the residents of public housing the right to return to their homes. Unlike the vast majority of the housing stock in New Orleans, the majority of the public housing units received little to no flood or wind damage from the Hurricane. Yet, as of October 2007 only ¼ of the public housing units have been reopened and reoccupied. The Bush government refuses to reopen the public housing units in New Orleans because it appears intent on destroying the public housing system, demolishing the existing structures, and turning over the properties to private real-estate developers to make profits.

Based on the discriminatory Federal Court ruling issued on Monday, September 10th, all of the major public housing units in New Orleans are now subject to immediate demolition (the latest report from Monday, November 5th is that HUD will attempt to start the demolition on Monday, November 19th. However, this is being challenged by various legal advocates and will be delayed until at least Wednesday, November 28th pending a Federal court hearing). The first site on the schedule for demolition is the Lafitte housing project.

— My Private Casbah 2007-11-09: All Public Housing Units In New Orleans Set To Be Demolished

Now, I’m an anarchist. As such, I’m also intent — far more intent than George W. Bush could ever dream to be — on destroying the so-called public housing system. I hope to destroy it right along with the rest of the statist system of regimentation, rationing, command and control. But, the Department of Bulldozers’ opinions notwithstanding, destroying the system of control is not the same thing as knocking over the homes that the government controls. The hope is to liberate them and allow people to reclaim their lives from the domination of the State and the exploitation of state capitalism.

As far as these particular public housing units are concerned, the proper question to ask is, who rightfully owns the homes that are set to be demolished? In the eyes of the State legal system, that’s the Housing Authority of New Orleans, a quasi-governmental non-profit corporation substantially under the control of its patron, the federal government’s Department of Housing and Urban Development. But neither HANO nor any other creature of the State can be the rightful owner of this or any other property. States are nothing more than massive criminal enterprises; they have no land and no money except what they expropriate from others by force. Their claim to the Lafitte housing project, like all their other claims, is fraudulent, because piracy is not a legitimate means for acquiring title to anything.

So if not HANO, who are the rightful owners? Well, when property has been lost or abandoned, it rightfully belongs to those who find it and put it to use. In the case of New Orleans and its government housing projects, that means that the people who should rightfully be regarded as the owners are not HUD or HANO bureaucrats, but rather the current tenants. Each resident has gained a legitimate ownership interest in her home, and in the land that it is built on, in virtue of occupying and homesteading it. Radical libertarians should recognize, on free market principles, that the federal government’s interventionist efforts to lock poor people out of their own homes and pass the land along to the nearest professional slumlord for development should be regarded as nothing more or less than State-sponsored theft. Specifically, State-sponsored theft in the name of propping up the political-economic class system of landlordism.

The radical implications of the homesteading principle for urban housing extend far beyond New Orleans. In pretty much every major American city, there is a more or less permanent supply of vacant lots, burned-out plants, condemned buildings, and other land which has been held out of use for years, and will continue to be held out of use for years to come. Part of the reason that so much land remains idle is that formal title has often been seized by the city government or by quasi-governmental development corporations, through the use of eminent domain, and the lots are simply abandoned while they await government public works projects or developers willing to buy up the land for large-scale building. In a free market, vacant lots and abandoned buildings should be available for homesteading by anyone willing to do the work of occupying and using them — which emphatically includes poor people in search of housing, a place to set up shop, land to cultivate for food, or for whatever other use they can put it to. It is only government intervention on behalf of state capitalism that keeps these lots shuttered and keeps them locked up in the hands of government bureaucrats and real estate developers; without statism there would be no political process of expropriation, demolition, redistribution, and redevelopment. Free people would be able to establish property rights in abandoned land, and thus provide their own housing, free of landlords and bulldozers, through their own sweat equity.

It’s because of this that I’ve been following the Take Back the Land movement in Miami with a lot of interest and a lot of sympathy. Their first project, the Umoja Village shanty-town (1, 2), was as good an example as you could like of socializing the land through direct action. And now, Max Rameau writes that their new project is to Take Back the Housing:

October 23, 2007 marks one year since the rise of the Umoja Village Shantytown in the Liberty City section of Miami in response to the crisis of gentrification and low income housing. In the year since this “people power” action, much has changed and much more remains the same. Black and other poor communities are ravaged by the crisis of gentrification and low-income housing while the same government which extracts taxes from us, does nothing to alleviate the crisis. One year later, the issue of community control over land remains fundamental in solving the crisis.

As the real estate bubble explodes around us, vacant foreclosed homes litter our communities and speculators choose to hold onto vacant houses and apartments, waiting for the next market swing in order to make their millions. For it’s part, in spite of all the scandal and crisis, Miami-Dade County doggedly maintains an unconscionable and immoral stockpile of vacant public housing units, units which otherwise would shelter some of the 41,000 families languishing on the housing assistance waiting list.

All the while, the homeless population grows, particularly among the under-housed, those not living on the street, but doubling and tripling up in single family homes, including public housing, where the extra families live illegally, endangering the housing security of the entire extended family, sometimes right next door to a boarded up, vacant unit.

We are forced to conclude that Miami-Dade County intentionally leaves units vacant, or tears down public housing all together–exemplified by the HOPE VI funded Scott-Carver public housing project demolition–as a means of fueling the real estate boom. When governments take units of low-income housing off of the market, the value of the remaining privately held units increases, as families scramble to find new living arrangements. This is nothing short of tax financed market manipulation, designed to decrease supply at a time when demand is sky high, resulting in a government sponsored–not market driven–real estate boom.

… In spite of the crisis, scandal and controversy, the reality is that local governments continue to enrich wealthy developers and have intentionally failed to address this crisis in any meaningful way. Neither Miami-Dade County nor the federal government operates based on the interests of poor Black people. As such, we are left with no other option than to provide for the people for whom the government is not providing.

Take Back the Land, again, asserts the right of the Black community to control land in the Black community. In order to provide housing for people, not for profit, this community control over land must now take the form of direct community control over housing.

Consequently, Take Back the Land has initiated the process of moving families and individuals into vacant housing, whether public, foreclosed upon or privately owned and intentionally vacated.

As of this writing, several families have already been moved into housing and several more are desperately awaiting their turn. We will move families and individuals into vacant housing units all across Miami-Dade County.

— Take Back the Land 2007-10-24: Take Back the Housing

A true free market requires an end to what Benjamin Tucker rightly condemned as the land monopoly, and a radical application of the homestead principle, which means that an awful lot of squatter’s rights can and should be recognized as the basis of a just claim to the land. While I disagree with Tucker on some of the specifics of rightful land ownership — for example, I don’t think that rental contracts necessarily constitute abandonment of land — I do agree that absentee landlordism is artificially propped up by a pervasive and unjust system of government intervention on behalf of the rentier class. Abandoned land rightfully belongs to those who can reclaim it through occupancy and use. So three cheers from this libertarian to Take Back the Land, and here’s hoping that counter-economic urban homesteading will spread — throughout Miami, onward to New Orleans, and throughout every housing market currently clutched in the talons of land monopoly and state capitalism.

Further reading:

Radical healthcare reform

There is no free market for healthcare in the United States.

Every aspect of medicine is tightly controlled by the federal government, and shot through with systematic subsidy and intervention. Federal, state, and local governments restrict who can practice medicine. They restrict where and how medicine can be practiced. They throw people in jail or hit them with massive fines for using the wrong label or practicing alternative forms of medicine or safely performing medical procedures which are considered above their government-licensed station. They tightly regulate which drugs can be produced and where you can get them and whether or not you can import them from somewhere else. They do this partly on the excuse that they know better than you and your doctor do what drugs you should be taking, and partly because they are engaged in a deliberate effort to enforce monopoly pricing for new drugs. The federal government created the circumstances that have forced most American workers either to live with no health insurance at all, or else to depend on their bosses for health insurance; the federal government created and actively subsidized HMOs in order to move more medical care over to a rationing (managed care) model; the federal government provides tax-funded subsidies for healthcare to select patients through Medicare, Medicaid, and S-CHIP; some state governments are now moving to force everyone to participate in a captive market for medical insurance, with more tax-funded subsidies to those who cannot afford it. The health insurance market is in turn heavily regulated by the government and wrapped up as tightly as you can imagine in government-imposed red tape, which systematically constrains choices and suppresses competition. The whole damned thing is run by government bureaucrats, government-insulated corporate bureaucrats, and government-anointed experts.

Yet whenever state Leftists and Progressives call for expanding programs such as S-CHIP, or for thoroughgoing nationalization of healthcare, this is what almost invariably happens: they pick out some horrible thing that has happened, or very nearly happened, to somebody under the present state-corporatist system of healthcare, compare it to what would have happened under a more state-socialist system of healthcare, and then say that this proves that getting healthcare through a state-socialist system is better than getting healthcare on the free market. Since we don’t have a free market in healthcare, and the horrible things that happen, or very nearly happen, in the U.S. medical system aren’t happening in a free market, this is simply a red herring.

Thus, I completely agree with Myca at Alas, A Blog when she says that we need radical healthcare reform and that our current system is abso-fucking lutely sadistic and nonsensical. But I don’t know what any of that has to do with the free market. As I said over there:

Myca: If you oppose universal health care and you do not explain clearly by what mechanism you will give medical care to poor people, you will be banned.

Well, I will give medical care to poor people (other than myself) by continuing to do what I already do. I scrape by on about US $13,000 a year and I give about 1/3 of that to groups that provide direct economic and medical aid to other poor people (Direct Relief, abortion funds, Planned Parenthood, battered women’s shelters, rape crisis counselors, etc.). I’m able to give that much partly because I don’t have any children to care for and partly because I have wealthier family members that I know I could ask for help in an emergency. But even without those advantages, I’d be able to give this kind of money more comfortably if it weren’t for the government’s constant draining of my resources through taxes to pay for red tape, corporate welfare and armed thugs. In any case I do think that I, at least, am doing something more to own my beliefs than just waving my hands around. As for explanation and defense:

Myca: I've heard over and over again that our current system is not a free market, and that's cool, but then it's incumbent on the person claiming that a free market would provide healthcare to those without money to show precisely how that would happen, because I don't see it.

OK, but that’s not what’s been argued so far. What keeps happening is a comparison between something horrible that happens, or almost happened, under the U.S. state-corporatist system, and what would happen under some other state-socialist system of healthcare. But comparing the characteristics of one tightly-controlled government-regimented system of healthcare to those of another tightly-controlled government-regimented system of healthcare illuminates very little about how a free market would work, because neither of the options under comparison has very much to do with free markets. If you want to argue that state-socialism is better than state-corporatism, fine, but you should leave the free market out of it. If you want to argue that a free market in healthcare would still have features that make it worse than state-socialist healthcare, that’s fine too, but it requires some further argument that hasn’t yet been given in any detail.

As for the beginnings of an argument that you give in this comment:

Myca: Roughly, because the free market has no mechanism in place to provide health care to people who are unable to pay for it.

I’m not convinced. Because, well, of course it does. The mechanism is the same mechanism that exists in state-corporatist or state-socialist healthcare systems: people who are unable to pay for healthcare themselves can get it by getting other people to pay for part of it or all of it. The question is what means of getting other people to pay for it are available–and whether these means are voluntary or coercive.

Any State-run system of medical care that you happen to like could, in principle, be provided by voluntary mutual aid on a free market. The State has no special ability to make medical care free, or to summon up money from nowhere to pay for it; for the State to cover the medical costs it has to get money, labor, or supplies from somebody else, and whatever the State takes could be given voluntarily. Suppose that you like the way that money is collected and distributed in the French medical system; then on a free market, nobody is going to stop you from creating a nonprofit French Mutual Society for Medicine that uses the same bureaucratic mechanisms to collect, allocate, and pay out money. The only limitation is that, whatever system you cook up, you cannot force people to pay in, and you can’t force people to use your system for their own healthcare costs.

You might claim that unless everybody is forced to pay in, there wouldn’t be enough money to go around. But consider the billions of dollars that are voluntarily pissed away every two years trying to elect a slightly more progressive gang of weak-kneed establishment politicians, and what might happen if those resources were redirected towards direct action rather than electioneering and lobbying. Let alone the amount of money that might go to healing people rather than killing them if individual people, rather than belligerent governments, had control over the dollars currently seized in taxes.

You might instead claim that even if there is enough money to go around, this kind of model puts poor people at the mercy of donors for their healthcare. But I could just as easily respond that using the State to cover healthcare costs puts poor people’s at the mercy of the political process, which certainly offers no guarantees that the least powerful and least connected people in a society are going to get what they need, or even get decent human respect. In either case, people who aren’t very powerful need to organize and struggle to protect their interests from people who are more powerful than they are. The question, again, is what means of struggle are (1) morally preferable, and (2) strategically effective.

I don’t think it’s crazy to see voluntary, bottom-up mutual aid as both morally and strategically preferable to top-down political regimentation. Voluntary mutual aid may not actually produce a healthcare system that looks much like the nationalized healthcare systems common in western social democracies, but I think that the differences would largely be for the better: less bureaucracy, more alternatives, and more control in the hands of the patients themselves. Unlike the corporatist system in place today, medical costs would be drastically lower, thanks to the removal of the government-created monopolies and cartels that currently control every aspect of the insurance, medical, and pharmaceutical industries. And unlike the corporatist system in place today, medical costs might be covered not only by charities or churches or bosses (gag), but also through grassroots associations such as mutual aid societies and labor unions. (There is some actual history here; lodge practice medical arrangements in the U.S., U.K., and Australia used to provide healthcare to working-class folks at a rate of about one day’s wages for one year of healthcare, before the growing trend was halted and obliterated by the politically-connected medical establishment, with the backing of the State.)

Hope this helps.

I’d also like to add that, in principle, I actually reject the claim that it's incumbent on the person claiming that a free market would provide healthcare to those without money to show precisely how that would happen, because I don't see it. I’ve said something about details here because I know something about the issue that might be illuminating, but generally speaking, part of the point of advocating a free market across the board is that in a free society you do not need to be an expert in everything. No individual person and no committee of people needs to plan out precisely how any social system will work–which is a good thing, because nobody has comprehensive knowledge and organizational skill and entrepreneurial creativity in every field of human endeavor. Advocating free markets for shoes or bread does not make it incumbent on you to spell out all the details of how enough of these will go around to keep people from going around shoeless or from starving in the streets, because that is really a matter that can be left up to the cobbler and the shoe-wearer, or to the baker and the eater–who can be expected to know a lot more than some policy wonk about how to handle their own business and meet their own needs.

Further reading:

David Graeber on the Charlie Rose show

Here’s a video of an excellent interview with anarchist anthropologist David Graeber on the Charlie Rose show.

Graeber does a good job of covering some of the ground, and has his head screwed on pretty well about the best aspects of the so-called anti-globalization movement, and a very clear explanation of direct action in theory. Alas, the latter is followed up with a very muddy attempt to apply that category in practice; Graeber is awfully confused if he imagines that there is even an ounce of direct action left in the periodic State-controlled anarcho-parades that now roughly coincide with State capitalism’s elite meet-and-greets. But oh well. The rest of it is quite good.

One of the best parts is his overview of the history of the internationalist radical Left, and how it changed after World War I and the Bolshevik coup d’etat. The old Old Left, pre-1917, was essentially anarchist, and powerful and numerous to a degree that may seem surprising today. Marxist-Leninism came to the forefront only later, in the wake of a world war. They were pretenders and co-opters, who gained their position with bayonets, bombs, and the expropriated wealth of the world’s largest contiguous empire; they sustained their position largely because of some converging cultural and social trends in the Century of Perpetual Warfare, notably the USSR’s ability to act even more brutally and effectively in the Great Game than the old imperial powers. Graeber hopes (as I do) that we are seeing some signs of a return to the atmosphere of turn-of-the-century radicalism, as dissent is less and less identified with taking sides in the deathmatch between rival super-powers, and more and more identified with a struggle by ordinary people against Power as such.

Here’s hoping, anyway.

(Via Brad Spangler 2007-09-27, via Francois Tremblay 2007-09-27.)

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