a critique of "freed market anti-capitalism" as argued in Keven Carson's "The Iron Fist Behind The Invisible Hand"

There are many strange trends among people who call themselves "Anarchists", one of them being the peculiar Center For A Stateless Society which combines the individualist Anarchism of Benjamin Tucker with "free market" economics. C4SS and it's adherents maintain that free markets should be the aim, but that capitalism will not deliver them. I completely agree with them that capitalism will not yield free markets, and for similar reasons. In "The Iron Fist Behind The Invisible Hand", Kevin Carson, a writer for C4SS, outlines the basic argument of these "freed market anti-capitalists".

The book makes the following argument: The property of capitalists to means of production and land is based on state power which backs it up. The state uses coercive force through it's courts, prisons, and armed forces to mandate copyright laws and the right of a few to monopolize the means of production and land. Thus capitalist property is not based on a "free market", it is in fact based on the opposite, government interference and coercion. People are not free to make exchanges as they please because capitalist property is imposed on them by the state. If the state was abolished capitalism would too go by the waste side and a true "freed market" would be allowed to grow with the true free exchange of goods.

I think it would be a stretch to call this credo any kind of "socialism" because it makes no commitment to common ownership of production and the product of social labor (the kind of free exchange of goods that is imagined here would be rendered impossible through this). Despite this it is certainly true that what is provided here is a critique of capitalism, one that is in a certain sense very plausible. It is completely true that the state enforces capitalist property rights and that without the state the class divisions that make up capitalism could not sustain themselves. This means, to me, that this "free market anti-capitalism" is at least worth analyzing.

Problem 1

It is perfectly correct that capitalist property relations are enforced by the state. Without a bureaucratic, power maximizing body, which regulates the use of weapons and controls territory, there would be no way to deprive the masses of people with no capital to invest in production, or land ownership, over control of these resources. There needs to be a wide ranging coercive body that inflicts harm on those who carry out acts of resistance if a class divided society is to be maintained. The problem that the freed market analysis runs into is that it attempts to rework "the free", or "freed market" into an anti-capitalist analysis.

The "free market" is an invention of capitalist ideology which serves the function of keeping people's attitude to the system favorable. If people believe that capitalism is a series of voluntary exchanges where goods and services flow freely then they are less likely to buy the notion that capitalism is at all oppressive, or unfair. This is demonstrated by the modern "neoliberal" ideology first championed by right wing politicians like Thatcher and Reagan, but now pushed down people's throats by the entire established order. This ideology states that in the capitalist economy people succeed, or fail on their own merits, through the free exchange of things, rather than being subject to class oppression, or exploitation. The free market, in reality, is impossible. It is not simply a problem with the state intervening, it is a problem with how the market works in the first place. There are two fundamental problems with how firms operate in the market that the freed market analysis ignores.

1: Firms can not operate without monopolistic practices. Firms have to enforce some kind of monopoly to survive. If they didn't the price of any commodity could be bid down to nothing and the market would effectively cease to exist. Full monopolies usually can't be sustained, so firms find recourse to semi-monopolies, such as the copyright laws that Carson argues against in iron fist. These semi-monopolies last for a certain period of time, but eventually fade away. Firms also resort to banding together against smaller firms to insolate themselves against competition. These necessary practices make the free exchange of goods an impossibility.

2: Firms can't cover the majority of their costs. The costs of transportation, resource replenishment, and pollution clean up can not be efficiently internalized by a firm. This means that the state has to use tax money to cover these costs. Every firm in the market is propped up by the state.

Getting rid of the state and the capitalist property norms it enforces doesn't deal with any of these problems. In fact the number of these functions that require the state such as covering costs and enforcing semi-monopolies such as patents would make this "freed market" society just as impossible as free market capitalism. Reworking the concept of the "free", or "freed" market into an anti-capitalist one doesn't change the fact that it is effectively an ideological mechanism for the capitalist system based on an impossible myth. There is not, there never was, and there never will be a "free", or "freed" market.

Problem 2

This argument also tacitly assumes that the market could create a society of freely associated producers, who aren't exploited, or oppressed by the economic set up. This is also untrue. The market is based on exclusion. It can only exist if the product of social production is appropriated for a specific party and then held ransom for an item of equal value. The extraction of the product of the labor of others and the coercion necessary to accomplish it, are inherent to the market system. The state is needed to enforce this coercive and monopolistic set up just as it is needed to enforce the control capitalists have over land and production. The latter is simply an extension of the integration of more resources and labor into the market.

The means of production and land are the property of the few who can afford to buy and sell them precisely because they are commodities for sale on the market. It is completely unclear how there is going to be a post-capitalist society with no capitalist property relations, but also the full integration of production into the market. Really, the freed market analysis ignores the basis for capitalist relations. It assumes that capitalism is made up of a series of state enforced property relations. If this is true then to abolish capitalism, all that is required is to abolish the state and with it those property relations.

In reality capitalism is simply the extension of the market fully into production. Once production itself, and people's ability to work in it, are bought and sold, capitalism has come into existence bringing with it the state and coercive property relations. Creating a post-capitalist society of free producers would require abolishing the market. Social production would need to be socially managed and consumed so as to eliminate private appropriation of the social product. This would eliminate any place for the private buying and selling of the market.

Conclusion

Freed market anti-capitalism is a confused set of ideas. It ignores the real basis for capitalism's existence (the market) and attempts to preserve it while buying into the capitalist ideology of the "free market". By ignoring that capitalism is the generalization of market relations this analysis, in fact, stipulates that capitalism is simply a series of state imposed restrictions on the market. This allows freed market anti-capitalists to argue that a free, post-capitalist society, would be one with a truly free market, when the task is actually to do away with the market all together.

Bibliography:

The Iron Fist Behind The Invisible Hand, Kevin Carson

Private Property, Exclusion, and The State, Junge Linke

The Modern World-System as a Capitalist World- Economy: Production, Surplus-Value, and Polarization, I. Wallerstein

What Is Capitalism?, Buick and Crump

On Exchange, J. Dejacque