Competition is Theft

In one of Nina Paley’s cartoons (she wrote the song “Copying is Not Theft,” which you should look up at YouTube just as soon as you finish reading this), Eunice says “Copying a song instead of buying a copy is stealing!” Mimi says “Doing for yourself what you could pay someone else to do is stealing!” Together: “Competition is theft!” That’s pretty much the actual operating philosophy of capitalism as we know it.

Capitalism is commonly defined as being about “private property.” And it is — but not in the sense that “property” would be used in a genuinely free market (i.e., property resulting from the products of our own labor and peaceful exchange). “Property rights” under capitalism, as we know it, are about the right to control access to natural opportunities.

The Marxist Maurice Dobb, in “Theories of Value and Distribution,” raised the hypothetical example of the state granting an exclusive right to erect toll gates across highways and thoroughfares — not to fund the operation of the roads, mind you, but simply to pocket the tolls in return for letting people pass. By the standard rules of J.B. Clark’s marginal productivity theory, whatever the cost of tolls added to the final price of finished goods would be the “marginal productivity” of the toll gates, and that portion of the price of goods would reflect the toll gate owner’s “contribution” to production. As John R. Commons observed in “Institutional Economics,” many of the “productive services” for which the rentier classes exact tribute consist of not obstructing the production of others.

The main effect of patents and copyrights, as well as business licensing, local “safety” codes and zoning, is to erect a toll gate in the way of your ability to transform your energy and skills directly into use-value.

Consider local zoning and “safety” laws that require a seller of baked goods to rent expensive commercial property instead of operating out of their home, and to use standard industrial-sized ovens and dishwashers instead of the spare capacity of their regular household appliances. The only way to amortize that cost is by operating on a scale that requires several employees, lots of hours of paperwork, extensive remodelling to meet local code and ADA requirements, and so forth.

From the consumer standpoint, a major part of the price of the baked goods you buy is the embedded cost of that expensive rent, the cost of servicing the loans, and other overhead. And from the producer standpoint, all possibilities of starting out small with minimal capital outlays and overhead, and expanding incrementally with minimal risk, are foreclosed.

In every case, the effect is to require more hours of labor, more capital expenditures, and more overhead to be serviced, than a given unit of output would require for purely technical reasons.

Most of the hours we work, far from being required to produce the value we consume, go to feeding parasitic rentiers or to the equivalent of digging holes just to fill them back in. The holders of artificial property rights are thereby able to protect themselves against competition from overly efficient production, and collect rents from artificial scarcity. The managers who control the economy, from the $50 million/year CEOs on down, are protected against the possibility of defection by people producing a major part of their needs in the informal sector, outside the control of bosses — escaping the plantation, so to speak.

In legal terms, transforming your labor directly into use-value, without paying tribute to those who hold property rights in access to natural opportunities, is theft.

It’s time for every honest person to be a criminal.