Capitalism versus Capitalism

by Sheldon Richman

Capitalism versus Capitalism

The following article was written by Sheldon Richman and published on his blog Free Association, April 12th, 2006.

While reading the symposium on Kevin Carson’s book, Studies in Mutualist Political Economy, in the latest Journal of Libertarian Studies, I was struck by how upset people can get when someone uses a term differently from how they use it — even if he makes his usage perfectly clear and explicitly draws on legitimate historical precedent. This comes up on at least two occasions in the commentary on Carson. I’ve read Carson’s book, and I had no trouble seeing how he uses the word “capitalism.” Much of the book is devoted to showing that historical capitalism — the real-life mercantilist political-economic system that most people attach that word to — bears only superficial resemblance to the laissez-faire free market, which he favors. Indeed anyone who does not quickly see this in Carson’s work is not paying attention. It is not some obscure point buried under other material. It is the point! Moreover, Carson shows the historical precedent — in the work of Thomas Hodgskin and Benjamin Tucker, for example — for such usage. It shouldn’t be hard to grasp.

Yet two critics can’t or won’t see it. Drs. Walter Block and George Reisman go for Carson’s jugular in retaliation for his alleged confusion of laissez faire with (state) capitalism. Carson handily disposes of the criticism and needs no help from me, but I can’t restrain myself from jumping into the fray.

Let’s start with Professor Block. Missing Carson’s point, Block lectures the author on the difference between corporate state monopoly capitalism, or economic fascism, and laissez-faire capitalism. “The point is, these two systems are as different as night and day. They have nothing in common except for this highly unfortunate terminology that labels both ‘capitalism.’ . . . As might be expected by now, this author does all he possibly can to bring about confusion in this regard.” This is astounding in its sheer obliviousness to what Carson has written. In fact, Carson could have written this about Block.

Block continues, “He [Carson] thinks that there can be such as thing as ‘free market socialism,’ not realizing this is a contradiction in terms, if the latter is used, as per usual, as employed by this author, to strip capitalists, entrepreneurs, landowners, etc., of their due.” But it’s not a contradiction in terms to anyone who carefully reads Carson’s book. Carson is making the point that the historical system called capitalism consists in state intervention on behalf of owners of capital, a system that exploits workers-consumers. That is also how nineteenth-century free-market individualist anarchists used the term. “Socialism” for these folks meant the alternative to a system that exploits workers, thus a system of pure laissez faire, or “consistent Manchesterism.” (Carson notes that Benjamin Tucker proudly embraced that description.) In light of historical definitions and real-world systems, there is nothing incoherent about free-market socialism or free-market anti-capitalism (as long as one defines one’s terms). Indeed, in historical terms, free-market, or laissez-faire, capitalism makes as much sense as free-market Bolshevism.

The missing of the obvious continues. Carson is concerned with history as well as political economy. He judges the industrial revolution and such things in terms of what actually happened, not rationalistically or in an a prior manner. Block has problems with this. He points out that Carson takes issue with Ludwig von Mises’s favorable view of the industrial revolution and the factory owners. Writes Block, Carson “does so on grounds that these employers were guilty of various and sundry crimes. Maybe they were. But this is all beside the point.”

Beside what point? Block asserts that Carson condemns industrialization per se. But he does not. He condemns it as it actually developed, which is to say largely on the backs of people dispossessed of their historical property rights. (See my earlier post on this subject.) Considering how sensitive Murray Rothbard was to feudalistic land theft and land monopoly, and the case for land reform, Block’s criticism is odd, considering he’s a promoter of Rothbard’s “plumb line.”

Strangely, Block writes this: “Of course there has been land theft, as Carson charges. But it should not be necessary to remind this author that this is part and parcel of state monopoly corporate capitalism, not the laissez-faire variety.” Who said it was part of the laissez-faire variety? Block’s bulletin will hardly be news to Carson. It almost sounds as though Block is arguing Carson’s case for him.

It gets funnier. Block chides Carson for putting the development of the “world market” into historical context. Carson writes, “The modern ‘world market’ was not created by free market forces . . . . [I]t was an artificial creation of the state, imposed by a revolution from above.” This is hardly controversial for a libertarian.

Block replies, “. . . [B]ut so what?[!] Yes, there was an admixture of the two types of capitalism in the development of world trade. Does this mean we toss it [the world market] out. . . ?” No, and Carson doesn’t say we should. For him it means we should end (state) capitalism and embrace laissez faire. Anyone got a problem with that?

Again, Block goes after Carson for condemning actual historical monopoly for its abuse of workers and consumers. “This,” writes Block, “is quite reasonable in the monopoly that emanates in state monopoly corporate capitalism; here, some firms are forbidden entry, and the privileged others can certainly exploit consumers.But how in bloody blue blazes can this take place under laissez-faire capitalism . . . ?” (Emphasis added.)

Words fail me at this point.

Finally, he savages Carson for criticizing corporate bigness, pointing out that only the free market can determine when big is too big. Fine — except that’s Carson’s point! What he objects to is the mercantilist corporate state, which destroys the free market’s mechanism for keeping firms from growing beyond what is economically justified.

To Carson’s well-documented Nockian contention that deep and pervasive pro-business intervention stretches back more than 200 years and has serious anti-competitive consequences in the present, Block responds, “Nor is it easy to see how the government currently props them [corporations] up.” It’s not easy if you don’t look, or read. But that is not the Rothbardian plumb line as I understand it.

Block makes the same faulty point over and over. He takes issue with no factual statements. Instead he asks why Carson is so critical of world trade, sweatshops, the employer-employee relationship, the industrial revolution. Sure, he says, each of these things was nurtured in an environment, not of freedom, but of monopolistic state coercion, sure each exploited workers and consumers on behalf of business – but none of them had to develop that way. No, none had to. But each did. Block is caught in a hopelessly rationalistic loop. As Carson points out, Block, like other libertarians, can’t make up his mind if he is defending the concept of the free market or what exists now. You can’t do both.

Read Block’s review and Carson’s rejoinder. They’re great fun. Before closing, I must quote one line from Carson because it sums things up perfectly:

[U]nlike Block, I think a description of the functioning of a free market calls for the subjunctive case, not the indicative.

Who said Carson isn’t a subjunctivist?

I’ve gone on too long. I’ll take up Dr. Reisman’s critique in the next day or so.

17 responses to “Capitalism versus Capitalism

  1. Sheldon Richman.

    If your theory, that Kevin Carson only hates the existing state of affiars because it is so far from laissez faire, is correct – then Kevin Carson should (for example) hate the state of affairs in Britain in 1870 vastly less than he hates Britain now – after all Britain was vastly closser to laissez faire in 1870 (although still not 100% laissez faire) than Britain is now.

    Where is the evidence that Kevin Carson hates the Britain of 1870 less than he hates it now? Or (as another example) that he hates the United States of (say) 1880 (when the United States was vastly closer to laissez faire) less than he hates the United States now?

    Sorry but it is you, Sheldon Richman, who has missed the point – and the point is not that Kevin Carson loves laissez faire capitalism (he most certainly does not). The point is that Kevin Carson hates (passionatly hates) the large scale private ownership of the means of production, distribution and exchange.

    Kevin hates the owners of large farms or ranches, claiming (falsely) that they only exist because of state intervention. He hates the owners of large factories, claiming (falsely) that they only exist because of state intervention. He hates the owners of department stores and retail chains – claiming (falsely) that they only exist because of state intervention…..

    I assure you that Kevin Carson would hate (for example) the Abraham Darby family (and the other founders of the industrial revolution) just as much as he hates the Koch brothers now. And he would hate the Marquis of Rockingham in the 18th century, just as as much as he hates any big time landowner now.

    Your theory that Kevin only hates big businessmen and landowners now because of how far away we are from laissez faire capitalism (and would not if our society were much closer to laissez faire) is just wrong.

    No friend of laissez faire capitalism would love the “Occupy” movement (that alliance of Marxist and communal “anarchists”) – Kevin does love them.

    No friend of laissez faire capitalism would love the Chicago teachers unon (not just a public sector union dedicated to ripping off the taxpayers – but also a collectivist dominated outfit dedicated to brainwashing children to support said collectivism) and Kevin does love them.

    No friend of laissez faire capitalism would support Chevez against the more moderate social democrat opposition – Kevin does support the Chevez socialists against the more moderate opposition.

    No friend of laissez faire capitalism would support the savage mobs of Egypt (with their worship of the socialist economics of Nasser – and their hosility to the even the moderate economic reform of Sadat) – Kevin did, ineed he called upon them to attack and destroy, and continued to do so even after the attack upon Lara Logan.

    And on and on.

    Merry Christmas and a bearable New Year to you.

  2. By the way – if Kevin Carson wants to set up a “mutualist” community somewhere. I fully SUPPORT his right to do so.

    Just as long as he and his followers do not intrude on the private property of people who do not wish to associate with them.

    And, please, no bullcrap about how this property was not “justly acquired”. Kevin does not care if a landed estate has been in the same family for a thousand years – he will always come out with the “not justly acquried” EXCUSE to steal it.

    If an estate is not well managed it soon leaves its owners. Ditto with a factory or a retail outlet.

    As for corporate welfare……

    I strongly suggest that I (and other real supporters of laissez faire capitalism) have a rather better record of opposing the “low interest rate” policy (the biggest example of corporate welfare) than Kevin Carson does.

    Indeed Kevin implies not only that economies of scale do not exist (hence his false claims that large farming estates, factories and retail chains could only exist by state intervention), but also implies that land and capital are naturally scarce – thus failing to understand (for example) the refuations of such ideas by Frank Fetter and others.

    For example, the idea that Kevin Carson supports the view that lending should be from real savings only and at rates of interest that these real savers voluntarily choose to lend out money (what should be part of the foundation of laissez faire capitalism) is false.


    Merry Christmas and Bearable New Year to you Mr Richman – and to your family.

  3. My apologies – the above should read “implies that land and capital are NOT naturally scarce”.

  4. “I was struck by how upset people can get when someone uses a term differently from how they use it — even if he makes his usage perfectly clear and explicitly draws on legitimate historical precedent. “:

    Yes, I’ve noticed a similar effect. For some reason, Christians got quite upset with my article, “Christians Are Ass Worshippers”. Even though I quite clearly stated at the start that I was defining the word “Christian” to mean “somebody who worships donkeys”, they seemed to insist that I ought to use some other definition about Jesus and God. It’s most perplexing.

    In fact, come to think of it, I saw similar effects with my treatises on “Elephants: The Stripey Orange Carnivores Of India” and “Water: The Chloride Of Sodium” and my discussion of spheres, the well known six sided regular polyhedra.

    Well, I’m off for a cheese sandwich now. Cheese being, of course, defined as strips of cured and smoked pork. And while I drink it[1] I will ponder smugly how dictionary-bound my opponents are.

    [1] “drink” in this context being a action that the narrow minded would describe as “eat”.

  5. Paul: I feel it would be unsporting not to telll you I actively encourage people to read your comments about me, and bring popcorn. Perhaps you’ll bite the head off a live chicken, while you’re at it?

  6. Paul-

    Just to be fair to Kevin, this misrepresents his position-

    Kevin hates the owners of large farms or ranches, claiming (falsely) that they only exist because of state intervention. He hates the owners of large factories, claiming (falsely) that they only exist because of state intervention. He hates the owners of department stores and retail chains – claiming (falsely) that they only exist because of state intervention…..

    He doesn’t hate the owners of large farms, ranches, factories and stores. He hates all employers, large or small, because he considers “employment” fundamentally unjust and aspires to an entirel co-operative production model, with no competition. Hence his rejection of all modes of transport (rail, roads, canals) since they allow the movement of goods from rival producers who are then forced into the evil of competition.

    His basic problem is the one debunked two centuries ago by Bastiat; the fallacy of preferring the producer interest over the consumer interest. The producer must be protected from competition, since in this fallacy that drives down his income. However, if the producer is “owned” by a “capitalist”, the capitalist will expropriate his production (Ricardo, Marx) so capitalists must be excluded from the model too. The only logical way to satisfy these desired outcomes is to revert to something akin to the manorial system (absent of the Lord of the manor) in which a community cooperatively internalises production. It’s basically the utopian socialism of a Winstanley and the Diggers, or Owen and his Owenites.

    Where exactly the Apple Macs and iPhones come from in this “grow yur own turnips” model is never explained. Kevin acknowledges grudgingly the one or two factories to produce Macs and iPhones would have to exist, presumably as cooperatives. But how they can distribute the iPhones when there is no trade and no roads…

    …that one is left as an exercise for the reader.

  7. “freemarketanticapitalist”.

    Well Mr contradiction-in-terms when are you actually going to start murdering “capitalists”?

    Or are you a coward?

    Are you going to wait for Comrade Barack to bring in “gun control” so that your intended victims can not shoot back at you?

    Ian B.

    Yes, my apologies, saying that Kevin Carson hates all large scale employers leaves out the basic fact that he hates ALL employers (large or small).

    After all the basic point of “Contract Feudalism” (and other such) is that even a person who hires a few people to work on his farm (or workshop – or whatever) is somehow doing something wrong.

    The real question is why did S. Richman get fooled by such an obvious fraud as Kevin Carson?

  8. Yep, that’s it! That’s why I’ve been pushing gun control so hard at C4SS lately. You must’ve intercepted the messages between me and Comrade Barack.

  9. So Kevin you are “freemarketanticapitalist” – well, many thanks Mr contradiction-in-terms, I am glad to have that cleared up.

    And your article against gun control here was mostly just a sermon of hate against American history, American culture and Americans generally. Especially the conservative ones who oppose government gun control.

    Although I am still not sure how “King Billy” caused the mass murder in New Town.

    Do you mean William III – or some other “King Billy”? Was “King Billy” the nickname of Adam Lanza at school?

    Was Adam Lanza an admirer of William III?

    Did he want to join the European (Dutch) “Blue Guard” society? And get upset by being rejected? Most of the original Blue Guard were, by the way,Catholics.

    It would have been useful as an article for gun control – rather than an article against gun control (which is what it formally presented itself as).

    Indeed I suspect that was your intention..

    Although, to be fair, you could have just messed up.

    A bit like the very poor speech from the NRA man that I just heard.

  10. Ian B.’s point about the interests of producers vs consumers is quite on point. Of course, if you think about the interests of consumers as primary over those of producers, the only anarchist position that makes sense is that of Kropotkin-inspired anarcho-communism, and not libertarianism, but whatever.

    Also, if we’re going to talk about people abusing the dictionary, it might be useful to remind one’s self that the word “capitalism” was first coined by its opponents in the labor and socialist movement, and was only later recuperated by the liberal democratic corporate state… and even later by so-called libertarians.

  11. Actually, Paul, I oppose gun control because I believe someday people like me will use guns to liquidate people like you. You’re already in our round-up database for after the anarcho-communist revolution. Raise high the blood-red flag and sharpen the guillotine!

  12. Of course, if you think about the interests of consumers as primary over those of producers, the only anarchist position that makes sense is that of Kropotkin-inspired anarcho-communism, and not libertarianism, but whatever.

    Well, if that’s the only “anarchist” position, then that would be a good argument against anarchism. What we’re interested in is what economic system will be most productive and thus benefit the consumer in the greatest availability of goods and services; the answer, which has been known for a long time, is free trade or, if you like “capitalism”. So I don’t know how you’d get to anarcho-communism from there.

  13. ­­­>>>What we’re interested in is what economic system will be most productive and thus benefit the consumer in the greatest availability of goods and services

    I think what you mean is that the producers will have the greatest availability of goods and services. Any system based on trade and currency is by nature oriented around the producer, not the consumer, because one does not receive wages based on consumer needs, but on production ability. The ability to produce and the respective needs of individuals are concepts that are not linked to each other. To tie them together is a relic of an obsolete, scarcity-based economy.

  14. When did this abolition of scarcity occur, and why was I not informed? Damn it, I want my Ferrari! Where do I go to collect it?

    I would try to answer your point, but I don’t know what your point is. Wages are set by the subjective value of produced goods to the consumer. The producer has to produce the goods the consumer wants. So I really don’t understand what you’re trying to say.

  15. At least “Blackbloc” admits he is a Communist (the Prince K. “anarcho” bit is pointless).

    Kevin Carson allies with the Communists (in the “Occupy” movement, the teacher unions, the Chevez regime….), but does not have the honesty to admit to being one.

    As for the death threat against me from Kevin Carson.

    Oh I am so scared sweetheart…….. (and I am still waiting for your explination of how “King Billy” was responsible for the murders in New Town Conn, which “King Billy” and ……?).

    Can we now expect a formal post from Sean Gabb denouncing Kevin Carson for making death threats?

    I will not be holding my breath waiting for such a post.

    Ian B.

    You beat me to it with the economic side.

    Oh well – everyone is beaten to the punch sometimes. And you may well have written it better than I would have done….

    grumble, grumble, grumble……

  16. Well Paul, it’s not often I can get in before you on the economics, which is why I normally focus on ranting about Puritans :)

  17. Well Ian – the Puritans did set up an anti private property regime in Mass. People were supposed to work for the common good and so on.

    It did not last long – they gave it up after a lot of them starved to death, so they allowed private property (and competition for money, and hired labour and….) and saved themselves (needless to say that is not the strory the government schools tell in the United States – they save the lovely indians saved the palefaces).

    No doubt it was all really “King Billy’s” fault – and the Pope. After all the Pope was on the side of WIlliam III. Because James the s….head, as even my Irish Catholic grandfather called him – and he was named “James” himself, was a puppet of Louis XIV who was an enemy of the Pope, and everyone else (bar the Ottoman Turks).

    Now there is a might-have-been in Irish history – if the Treaty of Limerick had been kept, not ripped up Parliament – who claimed that William had no right to make it (as usual it was Parliament who were the true baddies – but many people, Thomas Jefferson for one, do not understand that, although the monarch is often a waste of space – for example Queen Anne and her nonresistance to the vile “Penal Laws”).

    If the Treaty of L. had been kept then Irish Catholic property would have not been broken up into penny packets (eventually no bigger than the landholdings Nasser allowed in Egypt) and the horror of the 1730-1740s (and the 1840s – for although the Penal Laws had been repealed by then, thanks to Edmund Burke, they had done their evil work) might not have occured.

    I am being a little-ray-of-sunshine for Christmas.

    The Irish and the Jews – people who bare grudges for centuries (indeed for thousands of years).

    Jews still bare a grudge against the Emperor Hadrian for calling the Holy Land “Palestine” (I know people who have a strong ideoloigical committment to free speech who find it very hard not to start a fight if they hear that word)..

    My father did not forgive people even after 60 years – just because they turned his some of his family into soap (no “European spirit” in the man…..).

    And the Irish – forget “Killy Billy” (although one can start a fight with BOTH sides – by talking about the Catholic Blue Guard and the support of the Pope and …..) or even Cromwell (a man who exaggerated his own killings, just as his enemies also exagerted them, he wanted to be FEARED, they want him HATED so talking up the stories suits both) grudges go back much futher than than that…..

    People in Armagh (and other places) still have not forgiven the Vikings yet (Dublin was the biggest Viking slave market in the world). And it goes back further still……..

    “And when the Celts first came to Ireland, they found the people of the Goddess Dana already leaving there. They made an agreement – the Celts got all of Ireland above the ground and the people of the Goddess Dana got all of Ireland below the ground….”

    Some people still worry that the people of the Goddess Dana (and other such) may return from the burial (I mean “fairy”) mounds, and that they are not entirely happey with the “agreement”.


    It is astonshing, that with my mixed Jewish and Irish ancestry, that I am the lovely, easy going, “live and let live” person that I am……