Tuesday 14 April 2015
Thursday 2 April 2015
Capitalism an inherently Statist system?
It has been alleged by persons on the left that capitalism is an inherently statist system. That there has never existed any kind of stateless capitalism or "free market" in any real sense, and that therefore 'to contrast the state with "the market" is just silly.' That under capitalism, statism and the market economy are just two facets of the same hierarchical, totalising system of class rule.
I have heard those propositions put forwards before and I would urge you to reconsider: are the actually - or necessarily - true?
Firstly, I agree that "there are not free markets," but to say there never existed any kind of stateless capitalism or "free market" in any real sense is of no substance really. There had, perhaps, once never been a slave-free statist society, or one where women had the same rights and responsibilities under the law, or one that was not feudal, or a monarchy. So what? Society is a garden where we reap what we sow.
What is silly is not to contrast the state with "the market" but define the free market and the complete opposite of the free market capitalism at the same time! I point, naturally, to corporate welfare, legislations that offer preferential treatment to one service provider over another, subsidisation of domestic producers or protectionist tariffs – all interventions in the market that are not based on the market forces of supply and demand. The state is responsible for almost 50% of the spending in the economy in the UK, and 19% of the population is employed in the public sector. The state controls the money supply, sets the interest rates, and is responsible for regulating each and every facet of the economy from the provision of energy, to the conditions under which someone can employ another person. The state runs the schools, and a great deal of the hospitals. It decides when a road is to be built, and when we are to build a railway. It hands subsidies to tobacco farmers, then taxes the tobacco we smoke. It hands welfare to the wealthy in the form of contracts and preferential legislation, and to the poor in the form of entitlements, free services and food stamps.
The state does not exist because of capitalism, but because the state exists then capitalists are going to exploit it - it would be irrational for them not to do so if it provided more value than serving their customers, just as it would be irrational not to claim housing benefit if you were eligible - but to define the free market (the voluntary exchange of goods and services) and the complete opposite of the free market (state interference in the market) is simply rhetorical sophistry.
It is fallacious to conflate economic power with political power, they are not the same thing. Economic power does not equate to the ability to use force with impunity to achieve your goals. Otherwise Starbucks would lobby McDonalds, and McDonalds would lobby Coca Cola, who were at the same time lobbying Microsoft and Apple. They do not do this. Why? Because the state is the only institution that is able to pass preferential legislations, hand out subsidies and use force and the tax system to enforce them.
If you have a lot of economic power, then even absent the state you can buy a lot things from voluntary sellers: property, factories, machines, natural resources, products, services... but you will soon run low on assets if you are not also creating things that other people want to voluntarily purchase from you. If people are voluntarily purchasing things you produce then you are providing value to them. You are making them better off. Otherwise they would not purchase your goods voluntarily, you would have to coerce them to do so. This is one of the reasons why we voluntarists, anarcho-capitalists, or libertarians (call us what you will) do not want the state. In the market, if you don't like a service you have the power to simply stop buying that service: you don't have to vote for anyone, you don't need to get everyone to agree with you - you just buy something else instead. Not so with government - because you've already bought it. You don't have any choice in the matter. The state it has the power to violate your conscience and force you to pay for it through the tax system, while claiming that you tacitly consent to this violation of your free will to support those causes that you support and divest from those that you do not simply by virtue of living in a particular geographical area.
I have heard those propositions put forwards before and I would urge you to reconsider: are the actually - or necessarily - true?
Firstly, I agree that "there are not free markets," but to say there never existed any kind of stateless capitalism or "free market" in any real sense is of no substance really. There had, perhaps, once never been a slave-free statist society, or one where women had the same rights and responsibilities under the law, or one that was not feudal, or a monarchy. So what? Society is a garden where we reap what we sow.
What is silly is not to contrast the state with "the market" but define the free market and the complete opposite of the free market capitalism at the same time! I point, naturally, to corporate welfare, legislations that offer preferential treatment to one service provider over another, subsidisation of domestic producers or protectionist tariffs – all interventions in the market that are not based on the market forces of supply and demand. The state is responsible for almost 50% of the spending in the economy in the UK, and 19% of the population is employed in the public sector. The state controls the money supply, sets the interest rates, and is responsible for regulating each and every facet of the economy from the provision of energy, to the conditions under which someone can employ another person. The state runs the schools, and a great deal of the hospitals. It decides when a road is to be built, and when we are to build a railway. It hands subsidies to tobacco farmers, then taxes the tobacco we smoke. It hands welfare to the wealthy in the form of contracts and preferential legislation, and to the poor in the form of entitlements, free services and food stamps.
The state does not exist because of capitalism, but because the state exists then capitalists are going to exploit it - it would be irrational for them not to do so if it provided more value than serving their customers, just as it would be irrational not to claim housing benefit if you were eligible - but to define the free market (the voluntary exchange of goods and services) and the complete opposite of the free market (state interference in the market) is simply rhetorical sophistry.
It is fallacious to conflate economic power with political power, they are not the same thing. Economic power does not equate to the ability to use force with impunity to achieve your goals. Otherwise Starbucks would lobby McDonalds, and McDonalds would lobby Coca Cola, who were at the same time lobbying Microsoft and Apple. They do not do this. Why? Because the state is the only institution that is able to pass preferential legislations, hand out subsidies and use force and the tax system to enforce them.
If you have a lot of economic power, then even absent the state you can buy a lot things from voluntary sellers: property, factories, machines, natural resources, products, services... but you will soon run low on assets if you are not also creating things that other people want to voluntarily purchase from you. If people are voluntarily purchasing things you produce then you are providing value to them. You are making them better off. Otherwise they would not purchase your goods voluntarily, you would have to coerce them to do so. This is one of the reasons why we voluntarists, anarcho-capitalists, or libertarians (call us what you will) do not want the state. In the market, if you don't like a service you have the power to simply stop buying that service: you don't have to vote for anyone, you don't need to get everyone to agree with you - you just buy something else instead. Not so with government - because you've already bought it. You don't have any choice in the matter. The state it has the power to violate your conscience and force you to pay for it through the tax system, while claiming that you tacitly consent to this violation of your free will to support those causes that you support and divest from those that you do not simply by virtue of living in a particular geographical area.
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