Definitions That Work

In a recent conversation in the comments section of a blogpost that got published with the Libertarian Alliance[1], the individual I was conversing with believed that markets as a system naturally descended into capitalist organisation. I reprint here:

Tom Rogers says: I think we’re on the same page. Where I differ is that I believe such a society cannot function for very long on market principles. The market leads to capitalism, and capitalism leads inevitably to social disintegration. While I accept that market /=/ capitalism, I believe that one leads to the other. That, as I see it, is the main flaw with National Anarchism. However, I believe what you have outlined could be achieved within a global system of co-operative, non-market socialism.

chrisshaw1993 says: I have to disagree with your supposition that markets naturally lead to capitalism. Kevin Carson wrote a good article that shows why this wouldn’t be the case:

It has to be remembered that modern capitalism has required massive, systemic state intervention to achieve its modern grandeur. It’s commodified natural social relations and hierarchies, introduced credit money through state taxation, created artificially large economies of scale and has constantly needed to externalise costs onto taxpayers. And even with all this there exists a plethora of alternative-market and non-market systems which are much more sustainable, and have higher productivity and life outcomes. Looking at this, I see no reason why in an anarchist society different systems, such as market or non-market, or communistic or wage labour arrangements, could not coexist side-by-side.

Tom Rogers says: Can you provide an example from history of a really-existing non-capitalist market society, or alternatively, can you point to any current examples of functioning market-based societies that lack significant capitalist influence?

chrisshaw1993 says: There is the Shanzhai economy, which contains small, flat, clustered firms who create products for their direct economy by ignoring intellectual property. Similarly, the Emilia-Romagna economy of Italy is a demand-pull production system rather than the wasteful mass production systems. The Salinas cooperative of South America has a gift-economy based safety net system and is a network of cooperative firms. On land ownership, Ostrom noted multiple examples of successful commons ownership regimes, such as those in Switzerland, Japan and Spain, the first two of those which have lasted for centuries. On money, there exists a large variety of LETS and alternative currency systems which are quite long lasting. Konkin noted the existence of black market heavy industry in Burma as well as other alternative-market systems which make-up a black market. Even historically, Kropotkin noted how in the Industrial Revolution the firms with the most longevity were those small, family-owned ones that were a major player in actual industrial production.

Tom Rogers says: Thanks. Obviously I’m not familiar with all of these, so I will have to look into them, but at first glance, not all of them, if any, are market-based. A bartering system, for instance (which is what LETS really is) is not a market as I understand it, and most alternative currency systems seem not to be currencies at all, but just residual indicators of exchange value used for administrative purposes.

To put the point a different way, I’m not yet convinced that a genuine free enterprise economy could survive for very long without becoming capitalist, other than perhaps under the very limited conditions of small-scale artisan and agrarian producers.

But I will look further at the examples provided.

What’s particularly interesting here is the fact that despite providing a multitude of alternative-market examples that counteract the idea of both “market principles” that naturally descend into capitalism, the individual then makes the strange claim that most, if not all, of the examples I provide are in anyway market-like. This on the face of it is a nonsense. Markets are simply one way of coordinating economic activity, and are developed mostly through transactions and trade, rather than through social systems such as redistribution or planning. However, in saying this I’m not having a go at the author of the comments. Instead, I’m trying to see how he’s defining markets. He’s naturally developed the idea that markets are in some way synonymous with capitalism, which is just not the case.

Taking the typical example that suggests they are, that of the idea that markets create winners and losers and thus descend into capitalist hierarchy, the evidence is not on its side. Under actually-existing capitalism, markets certainly do serve this function, but only due to massive state intervention through a revolving door between corporations and regulatory agencies and systemic subsidies to large companies in the form of limited liability protection, transport payment, eminent domain-based infrastructure projects and TBTF banking monopolies. Without these, the prescient examples I provided in the comments, as well as other existing and theoretical structures, become much more feasible and competitive. On the point of winners and losers, in a market without state-subsidised mass production, and with more direct links between consumption and production, production lines become variable and quick, with small-batch production and easy switching between products when market situations change, which then means little in the way of genuine losers as new competitors and market entrants can compete at multiple different levels on multiple different economies of scales. Markets naturally become clustered with a tendency to decentralise.

This inevitably means then that capitalism, as it presently (and has historically) exists, is not on the cards when thinking of markets. Creating a definition that suggests a link between the two is unworkable if we view capitalism as an historical structure with junctures of purposive change and direct intervention by particular elites and systems. Unfortunately many libertarians fall into the position of defining capitalism in ‘economic’ terms, as a system of individual ownership of the means of production. That would be fine if we all lived in a vacuum, but in the real world capitalism as defined by its historic contexts has never evolved or existed like this in any real sense. Its involved the creation of new social relations and a market society, where all interactions and economic activity is defined around capitalist relations. Having definitions that work means looking at all of our labels and ideas with an historical, as well as abstract, lens. Ideas do not exist purely in the abstract. Meanings are developed by relationships of power and dominance, as well as by freedom and sociality. By doing this, I think libertarians and anarchists need to reject terms like socialism and capitalism, and maybe even terms like libertarianism and anarchism. All have been, or are, being co-opted by elites and structures that have no interest in freedom and voluntaryism. Definitions matter, and we need some that actually work.



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