02 December 2011

Where's the beef (with capitalism)?

Over at Arm Your Mind for Liberty, a recent article takes issue with capitalism. I read this article with great interest because (I assume) it grew out of a discussion between myself and the author as well as some others regarding capitalism. When I read it, though, I couldn't find that the "beef" is really with capitalism at all. Before going too much further, we should probably start with a (common) definition of capitalism, but I'm not going to attempt to define capitalism in great detail. It seems that if you ask ten different people, you'll get ten different answers about what capitalism means to them as the linked article states:
‘Capitalism’ is a funny word. It means so many different things to so many different people, that it’s become entirely useless as a basis for any kind of rational or constructive communication. [...] Some will mention wage labor, others exploitation and yet others will talk of free trade. But I think the defining feature is the ability to accumulate lots and lots and lots of stuff (capital).
Fair enough. The ability to accumulate lots (and lots and lots) of stuff, or capital, is most assuredly a characteristic of capitalism and, as we will see, the article's main problem with it, so let's focus our attention there. Before we do so, the original article takes a slight detour:
And then, most importantly, [a characteristic of capitalism is] to have a third party protect your ability to control that stuff even when you’re not using it. That third party, of course, is the state (the government). [...] Without this ability to accumulate and have your title to said stuff protected at little to no cost to yourself, things like wage labor, exploitation and managed trade could not happen. These all depend on the power imbalances that stem from the state protecting capitalists’ control of their property.
Whoa, wait just a minute! Now, we're not talking about capitalism any more. We're talking about a state-directed ("managed trade") and state-enforced ("stuff protected at little or no cost to yourself", presumably via taxation on the whole population and "power imbalances" in the form of state-chartered police and enforcement mechanisms) economic system, our current system, what many call crony-capitalism. So, we can already see that the author's problem is not with capitalism, per se, but with crony-capitalism and the state enforcement of it. The author continues by stating that he doesn't "think capitalism would survive without the state".

But we're not talking about capitalism any more. We're talking about the state. The author offers no evidence or theories as to why capitalism cannot or will not exist without a state other than to say, "I don’t think a non-aggressive organization will go to the same lengths as the state to protect property". This is demonstrably false, however:
Just think for a moment about the following:
  • Who is responsible for protecting you at most major shopping centers? Ever see a private mall cop? I bet you have.
  • How about casinos? Almost all casinos have private armed security.
  • What about at the dance club? Ever see a bouncer throw out a belligerent drunk?
  • What about at the university? You’d be hard pressed to tell the difference between a public safety officer and a cop. Many universities have private police forces.
  • How about warehouses, ports and apartment complexes? It is not uncommon to have private security guards protecting all of those. My apartment complex has its own security.
  • Airports used to be entirely protected by private security – and guess what? No one was complaining about being molested. Further, after 9/11, it was the airlines who made real improvements to security by putting in steel cockpit doors and arming the pilots.
  • Banks? - Almost all bank cash transfers are dealt with by way of private armored car, and many banks have private armed security as well.
Now I've been drawn into a digression about capitalism on a larger scale. Let's return to the accumulation of stuff in the original article and look at an example provided by the author describing his issue with it: "if someone fences off 1,000 acres of land but consistently uses only 2, I don’t consider that legitimate". This situation draws its basis from the Lockean idea of homesteading, that one becomes an owner of land by "mixing" his labor with it. I'm not going to argue whether fencing 1,000 acres constitutes a mixing of labor. A debate on such a matter is not likely easily resolved.

Instead, what if we arrived at this situation differently, voluntarily? Let's assume two people and call them A and B. Each of them own 501 acres (via legal means, homesteading or otherwise) and farm the entirety of their respective plots. A and B both consume only what they need to survive and sell the rest of their produce into the marketplace. A saves the proceeds from his sales under his mattress while B spends his money on vacations and house keepers and other consumable goods and services. (One has to wonder, at this point, if B has a claim to A's money since storage under A's mattress is not "productive" use in B's mind.) At some point, bad weather conditions befall A and B. A, having saved his money, is able to buy what he needs from the marketplace, but B has nothing. Seeing B's plight, A offers to use some of the rest of his savings to buy 499 acres of B's land. B, needing to feed himself and his family, reluctantly agrees. Now A owns 1,000 acres, and B owns 2. We've arrived at the evil capitalist situation described by the author in the original article, but we've arrived by completely legal and voluntary means.

Let's assume that A, having just bought the land and exhausting much of his savings, does not have the capacity to expand his farming operations into his newly acquired 499 acres. When the weather improves, does B have a legal right to reacquire the land, via homesteading? What if B had kept the land but sold his farming equipment to A to pay for his food? Now that B is incapable of farming his land (and has no reasonable prospects for doing so since he has no farming equipment and no savings with which to buy any), can A also freely acquire B's land under the homesteading principle?

The author of the original article seems to think so: "If someone needed land and had a solid intention to use it to sustain his life, I would support that person in any attempt to homestead a reasonable parcel out of the 1,000 acres". B, in our example, has every "intention to use [the land] to sustain his life" as well as others'. The author goes so far as to suggest that force is an appropriate means to affect this outcome:
In a stateless society, people would be freer to rise up against people who attempt to control more property than they actually use. Acting in concert, great numbers of people could, in the worst case, purchase arms, form a defense force and fight capitalists on a more level playing field. Squatters, worker-owned cooperatives and similar direct actors would take control of more of the capitalists’ property. In the process, their power would be eaten away.
In fact, A has saved B's life as well as his family's, and in return B should have the right to use violent force to take back from A what was voluntarily given/traded (by B himself!) to A? What the author is suggesting is either a clear violation of the non-aggression principle or will require a state, with a legal monopoly on the use of violence, to forcibly give A's land to B.

The only other argument in favor of what the original author is suggesting hinges on the word "reasonable". Perhaps 1,000 acres is an "unreasonable" amount. Much like the hypothetical debate about homesteading to which I alluded earlier, a common definition of what is "reasonable" is not easily resolved. As an example, here are a bunch of pro-gun people on a pro-gun forum disagreeing about what "reasonable" gun laws would look like. At any rate, the example I gave above works with any sized parcel of land. In fact it becomes even more difficult to reason out on a smaller scale. Consider if A and B each owned two acres and A bought 1 acre from B. A is in a much better position to farm an additional 1 acre than he is an additional 499. What if A incrementally continues the process, voluntarily acquiring parcels from C, D, E, etc. in a similar manner? When does the amount of land that A owns become "unreasonable"? Does the situation change if A rents the land back to B, C, D, E, etc.? Who makes that decision and who enforces it? What authority does this entity have when A can show that his property was acquired legally? None, according to the author of the original article: "If a person prospers legitimately, I have no basis to challenge any accumulation of wealth." Wait, what? Does B have a claim to A's legitimate accumulation of wealth (in the form land) or not?

In short, capitalism, true capitalism, is not an economic system that is imposed on anyone. It is an economic system that arises from, or rather is the result of, voluntary interactions in a truly free society. In fact, the economic system proposed in the original article is not only incoherent but, in the author's own words, requires violent enforcement. I suggest that the author's "beef" is not with capitalism but with a free and voluntary society.

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