From Mises blog:
Should Libertarians Oppose “Capitalism”?
Excellent post by Bryan Caplan, Should Libertarians Oppose “Capitalism”?, arguing against Sheldon Richman’s contention that we libertarians should not only not use “capitalism” as a synonym for favoring free markets, but that we should say we oppose “capitalism,” because of the term’s connotation of the historical collusion between business and the state.
I have myself for years now preferred the term anarcho-libertarian instead of anarcho-capitalist, mostly because libertarianism is about more than just free markets. But to the extent capitalism means the private ownership of the means of production–and I think this is a defensible meaning still–it is of course libertarian. We can expect any advanced libertarian society to be “capitalist” in that it would have an industrial, productive economy where the means of production is privately owned, characterized by the division and specialization of labor (see my post Rothbard on Self-Sufficiency and the Division of Labor). In my view we should certainly be in favor of free markets and not adopt instead other terms like “market liberal” or “freed market”. I’m not sure what term best describes us–we favor peace, cooperation. Perhaps Henry Hazlitt’s proffered term, “cooperatism,” is a good one. I think it best to use capitalism to refer to a catallactic aspect of the libertarian, free society, while making it clear that we oppose corporatism and business-state collusion, and use free market or libertarian to describe our preferred socio-political order.
But, in my view, we certainly should not say we are opposed to capitalism (and we most certainly should not say we are for “socialism,” as some left-libertarians propose!). Just as saying we are “capitalist” might imply pro-corporatist sentiments if we are not careful, saying you are against capitalism would imply you have left-libertarian sentiments such as hostility to corporations, “bossism,” and like–which may be a subset of libertarianism but is certainly not necessary to libertarianism. We are neither left nor right; we are libertarian.
March 3, 2010 at 6:32 pm
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I’ve thought of this variously. I was rather taken aback by Richman’s suggestion. The fact is that the history of libertarianism is a history of struggles over words too. We haven’t known what to call ourselves for a very long time. but the idea that we are going to clarify matters by getting rid of the term capitalism strikes me as really far flung. The whole of history of thought calls what we believe in capitalism. I’m sorry that some lefties are confused but there is no getting around it: the system we want is everywhere called capitalism and always has been. To be sure, we don’t have to like every use of the term. But this is hardly unusual. The Austrians didn’t like that term either; they were tagged with it and it stuck. It was supposed to be pejorative but eventually it was a badge of honor. Probably Caplan goes into all this.
March 4, 2010 at 4:27 am
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The problem of course is that the ecapitalism that ‘we’ are defending ( a bona fide free market) is not the same thing as the ‘capitalism’ that the Left decries so muchalism: They do not always see the nuanced difference, in that they see State support for corporatist interests as an integral part of the ‘capitalist’ bogeyman. How much easier it is to begin by explaining that ‘we who believe in the freedom of the market as the best route to benefit all people, ALSO have a problem with corporate/crony/capitalism: we hate Wal-mart’s exercise of ‘eminent Domain quite as much as you do! Oh, and by the way, we love lower prices too, unlike those capitalists who have sold you on th eidea that deflation is the bogeyman!.
Beginning with ‘we love capitaliam’ is not a very good way beginning to explain to a left-leaning undecided who we would like to convince of th ecogency of our ideas. Becuase you have to start by carefully explaining what our version of capitalism is first, and how it differs from the fuzzy and indistinct boogeyman he has come to regard as somehow evil. You can’t do that in a soundbite. The fastest way to get him to listen is to find what you agree on..
March 5, 2010 at 3:51 am
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The fact is that the history of libertarianism is a history of struggles over words too.
I agree with you about that. But the words we struggle over have not always been the same. In the 1910s and 1920s, libertarians were struggling over the word “liberal.” In the 1880s, libertarians were struggling over the term “socialism” (see also 1, 2, etc.). As near as I can tell, the attempt to claim and radicalize the term “capitalism” didn’t really become part of libertarianism until the 1920s at the earliest (e.g. in Mises’s Socialism), and didn’t really pick up steam until the 1930s-1940s (e.g. with Frank Chodorov’s “Let’s Try Capitalism,” etc.). After World War II, the Cold War made the project of clarifying what “capitalism” was and what it meant seem especially urgent, with the context being the attempt to give a coherent explanation of the differences between life in the Marxist-Leninist countries and life in the “West.”
The whole of history of thought calls what we believe in capitalism. I’m sorry that some lefties are confused but there is no getting around it: the system we want is everywhere called capitalism and always has been.
Come on, Jeff, really? The word “capitalism” wasn’t used at all to refer to economic systems prior to the 1850s. But there were free market theorists before the 1850s; I suppose that what they believed in was called something other than “capitalism.” When Louis Blanc talked about “capitalisme” in the 1850s, he defined it as “the appropriation of capital by some to the exclusion of others,” and when Proudhon talked about “capitalisme” in the 1860s he was talking about an “Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labour.” Neither is clearly identical with “the system we want,” if that latter is supposed to be free markets. Proudhon’s understanding of capitalism is simply orthogonal to the question of a society based entirely on free association and voluntary exchange. Blanc’s may be orthogonal, or may even be mutually exclusive with, free markets, depending on what sort of “appropriation” and “exclusion” he has in mind. (Certainly, a lot of the appropriating and excluding that was going on in France in the 1850s had nothing to do with free markets and everything to do with state privilege.) Of course, you could just write this off as “confused lefties” (and I might even agree with you about Blanc; although I wouldn’t agree with you about Proudhon). But if the word was made by people who used it to mean something other than what you would like to mean by it, and if lefties have continued ever since to use it to mean something like what Blanc and Proudhon meant by it, and something quite other than what you would like to mean by it, then perhaps you should consider that the term is, at least, not univocal in its meaning. And that this kind of statement about what capitalism has “always” and “everywhere” been used to mean is hyperbolic, madly oversimplified, and misleading.
March 3, 2010 at 6:34 pm
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Correct, just keep making a distinction between capitalism and corporatism. If libertarians start saying “I’m against capitalism,” many socialists will consider it a victory in their struggle to enlighten everyone about their so-called superior ideas.
What’s really going on is that socialists have been redefining “socialism” over & over as its flaws become more & more irrefutable. Once laissez-faire finally wins the day, socialists will no doubt be in a contrived position to say “See, we told you socialism would win the day.”
March 22, 2010 at 9:53 pm
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There are libertarian versions of socialism and also authoritarian versions of socialism, just like there are libertarian versions of capitalism and also authoritarian versions of capitalism.
Libertarian socialists have long consistently defined socialism as meaning direct democratic decentralized worker control over the means of production. See the I.W.W. or Noam Chomsky for starters if you have no idea what I’m talking about. Authoritarians will say anything they think will give them more power, so it doesn’t really matter how they define socialism or capitalism, it’s just self-serving distortion.
Don’t tell me there aren’t libertarian versions of socialism, I happen to have lived and worked with a collective of libertarian socialists when I was
March 3, 2010 at 6:40 pm
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Subjective Capitalism Trumps the Empirical Capitalism Trash.
What classical liberals are opposed to is empirical capitalism. With it comes all of the errors stemming from ego-driven interpretation of data, giving full rein to corruption. ‘Crony capitalism’ is the corrupt fruit of empirical economics.
Subjective capitalism has its basis firmly resting on the subjective valuations underlying human action, and across the time horizon. That is how humans truly decide about things as part of their aspirations towards prosperity and justice.
It is no wonder the State is doing all that it can, by using its propaganda outlets, to undermine economic knowledge.
March 3, 2010 at 6:50 pm
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Rothbard’s commentary here: Capitalism versus Statism – http://mises.org/daily/3735 , for those interested…
March 3, 2010 at 7:19 pm
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capitalism, as I’ve understood, was named by its opponents who criticized the system because some people “capitalize” on others (i.e. zero-sum). However, the term was adopted by its proponents because of the role of capital in production. Our in-between system is still referred to as capitalism (correctly so) because it uses prices which could not meaningfully exist in its absence. Yet all the price distortions caused by constant intervention on the part of a bureaucratic institution not subject to the profit-loss system of the market, are blamed on capitalism by the very perpetrators of this price obfuscation. Any change in terminology won’t suppress the politicians desire for control and their shifting the blame of government failures on the Market. This semantics deludes from the fact that, essentially, only two kinds of systems are possible–one where voluntary exchange determines meaningful prices (even if they are obscured by the coercive component); or one where some planner collects all goods and distributes them in accordance with his/their own opinions of an optimal distribution.
March 3, 2010 at 7:49 pm
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I have no problem with labeling myself as both a capitalist AND a socialist. This is because capitalism was demonized, with that term, by Marx as a system of business and state teaming up with each other, implying that business invariably used the state as its tool to stay alive and “exploit” laborers. But he was dead wrong and had it completely backwards. Therefore I have no problem using the term “capitalism” to describe laissez-faire market activity because it indeed describes market activity, but with Marx being wrong about it being inseparable from the state.
I also have no problem calling myself a socialist because socialism, before Marxists and state socialists monopolized the term, was a wide-branching term encompassing differing philosophies on how best to solve the woes of labor with finding employment and wages meeting labor product. And no system does this better than capitalism. Therefore, I can call myself a capitalist socialist and there’s absolutely no contradiction.
March 3, 2010 at 7:57 pm
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The opposition be d@mned. Rothbard was the father of Anarch-Capitalism and he certainly understood that the emphasis was not entirely on free markets. Rather than adopting new terminology amongst ourselves, it is perhaps more important to emphasize the fallacy of the modern structure: corporatism, fasco-corporatism, or corporate-socialism (a fun game is making up these names). Also by maintaining a branch separate from separate from anarcho-communists or anarcho-libertarians of the “leftward” variety and also separate from traditional libertarians, we allow identification with specific set of value within a broad schema of ideology. Libertarians should celebrate capital and oppose those who make capitalizing on others their emphasis.
March 3, 2010 at 8:06 pm
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Isn’t capitalism simply an economic system under which the factors of production are privately owned? And, according to Austrians at least, isn’t this the ONLY economic system compatible with an advanced division of labor and high standards of living? How could anyone be opposed to such a system? What does collusion between existing owners of capital and the State have to do with anything?
March 3, 2010 at 11:02 pm
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If the State reserves the right to seize your property and shut your business down at any time, for any reason, then you can hardly say capital is still “privately owned.”
March 3, 2010 at 11:21 pm
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You’re absolutely right, Beefcake. Capitalism, rightly considered, is merely a system by which private owners leverage their property to increase the productivity of labor, thus making a profit for themselves, and coincidentally benefitting those who work for them at the same time.
Collusion between capitalist and the State is not capitalists; it is corporate welfare, corporatism, fascism, whatever.
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Crap! That should have been:
“Collusion between capitalists and the State is not capitalism; it is corporate welfare, corporatism, fascism, whatever.”
The increased posting speed is very nice, but PLEASE PLEASE PLEASE bring back the preview before post option.
March 4, 2010 at 6:13 am
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“Private” itself implies the false public/private dichotomy, which already gives the State the semantic upper hand. Public implies it’s for everyone’s good, when it’s really for the State’s good. Private implies it’s for one group’s selfish interest rather than the general public’s, when really that’s a complete misconception as we know. There is simply no reason to use the word “capitalism” when the term “free market” works just as well.
March 4, 2010 at 11:51 pm
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I’d say free association which drops the “cattilacs” only works better than either capitalism and free market. It’s hard to argue against free association.
March 3, 2010 at 8:54 pm
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@ Vanmind
I agree. It would be much easier to continuously publish and speak on the disparities of corporatism versus capitalism then it would be to discard the term capitalism. In fact, we would probably be labeled as a euphemist. The left would simply state that once you point to the ills of the free market the free marketers will simply redefine the term March 3, 2010 at 9:18 pm
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Libertarians should be aware of the dangers attached to words that have such a highly emotional connotation, and the potential for misunderstandings in a conversation with someone who is unfamiliar with the terminology that the other person uses.
I’ve seen this longer than I’ve seen the word “corporatism” be used to mean “capitalism in the bad way that libertarians and free-market people don’t like.” (at least in my limited years of internets.)
I’m tending away from the term capitalism, but not rigidly; and also am in favor of using any or either term so long as the other person and I are talking about the same thing. If I were to write something down for what my grandeur could only presume to be a large and vast audience, I would take the extra time to lightly define what I mean.
Whether one does exactly what Mises bemoaned that the contemporary liberals were doing in his time of “stealing” the word liberal from classic liberals, (stealing a negative word and tagging a positive meaning) or if one just keeps their terms and sticks to them, the linguistic problematization will not go away.
March 3, 2010 at 10:09 pm
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We have to remember, one who coined the term capitalism, MARX! What did capitalism mean for the first hundred years of existence, crony capitalism. And the classical liberals attacked which system, capitalism. There is no platonic form of capitalism, nothing innate, just the way people use the word, and 99% of population thinks crony capitalism is capitalism. You can try to spend your time arguing there are completely different types for capitalism, or economic systems are more capitalist or less capitalist, or you can spend your time saying some markets are freer then others. At least when you switch to away form capitalism you can say, what exactly do you mean by free market. A free market has a very self evident definition, while when one says capitalism, no one knows what you mean exactly what you mean, and can have significant legitimate differences in the definition. Should we switch the noun of choice away form the word capitalism, yes! I consider to be certain. Should we say we oppose capitalism, I think maybe we should, but only because as to avoid easily be characterized as right wing extremist. I still don’t know for certain if we should outwardly state we oppose capitalism though.
March 4, 2010 at 12:31 am
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We have to remember, one who coined the term capitalism, MARX!
Someone used the term 50 years before Marx. (Can anyone remember who?)
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Good point, this is a form of semantic Platonism, believing that somehow words have some meaning independent of the meaning people assign to them in their own mind.
March 3, 2010 at 11:42 pm
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It is almost impossible to use any term anymore, because they all have been destroyed by years of propaganda. That goes for capitalism and socialism. I’m somewhat with Zack Bibeault here. In some ways I consider myself a socialist, only in that I oppose corporate structure, and I think corporate structure and capitalism seem rather synonymous. But I would say I’m a capitalist and “libertarian”, as the terms are used in America because I see the state as having almost no role and mostly illegitimate. But those words sound so terrible, “libertarian” is just too close to librarian for me. But libertarians certainly are for many things that are historically tied to the evolution of capitalism and many of the changes in society it brought about, so that element is there.
March 4, 2010 at 12:14 am
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The term capitalism was coined by classical liberal satirist W. Makepeace Thackeray, and taken over by Marx and others. Similarly, “ideology” was coined by a classical liberal, Destutt de Tracy, and taken over as a pejorative by Napoleon and Marx and others. The origin, after a while, probably doesn’t matter much. What matters is the stench the words conjure up in the minds of the hearers.
Still, giving in to every meander of the hive mind does gall.
Take a similar example. Say you like children. Don’t call yourself a “pedophile.” That has a quite distinct and established meaning. It’s a term of art that would be artless to adopt if you want to protect children.
Similarly, though one can argue that “capitalism” is a not-bad term for a free-market, liberal order — especially, as Kinsella notes, in that order’s catallactic aspect — its association with dirigisme, regulatory capture, plutocracy, and crony special favors sullies it.
Should we say we are opposed to capitalism, then? Well, the base set of defining characteristics of the term, a private market in production goods and a market for labor, are things we want to accentuate, so saying we are “against capitalism” may seem to many as disingenuous.
I prefer to say I’m for “laissez faire,” and then argue about that, mindful that Herbert Spencer referred to “that miserable laissez faire” of standard politics, which is unmindful of seeing that the basic duties of the state are done while asserting that the state do so much more in other realms that it has proved incompetent. That is, Spencer preferred to take the term “laissez faire” and turn it on its head, against the piecemeal social engineers and “robust state” advocates.
No term will remain unsullied as long as there are statists to sully the terms. This being the case, I often bandy about a now disused political term: locofoco. But that’s another story and another battle.
March 4, 2010 at 11:27 am
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I’ve got it. From now on I want to be known as a free-laborist.
March 4, 2010 at 2:14 pm
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Sheldon,
I think you completely misunderstand the problem with the term Capitalism.Almost everybody I know equates Capitalism with free markets. The problem is not the term. It is that people cannot grasp the concept of economic freedom. You start talking about an unregulated economy and people start to freak out. When Obama says capitalism, he is referring to free markets. Whether he fully aware of what free markets really are and is doing this on purpose is irrelevant. The fact is, he blames freedom and not State controls.
So what are you going to do? Start explaining to everyone that you agree with the “Capitalism” Mises used in his writings, but not with “Capitalism” as Obama uses it? The whole thing makes no sense.
March 4, 2010 at 3:04 pm
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“Almost everybody I know equates Capitalism with free markets.”
I thought the vast majority equated Capitalism with Wall Street.
I equate Capitalism with everyone but hunter-gatherers. Lenin and Obama and squirrels are all capitalists.
March 4, 2010 at 12:53 am
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Ayn Rand defined capitalism and pointed out in her book, “Capitalism ,the Unknown Ideal” its virtues, its practicality, its historical misrepresentation , what moral prerequisites are necessary for its existence and never apologized for it. Trying to pussy foot around the word is neither effective nor productive if a free society with a limited government is in your vision of how life should be.
March 4, 2010 at 3:49 am
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How about Anarcho-liberal?
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Historical capitalism was statist. Many who first used the word “capitalist” disparagingly were pro-property and pro-free trade, such as Thomas Hodgskin (who predated Marx) and Benjamin Tucker. Caplan did not refer to the history that constituted most of the lecture.
March 4, 2010 at 7:07 am
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all depend on what you call “Capitalism”, nowadays there is no country who practice real Capitalism. They call themself capitalist, but in fact they are simple gang of liars and swindlers. For me the real Capitalisme is the Libertarian movement.
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PS: I’m not just making a semantic point, and I’m not just making a historical point. I’m making a rhetorical point. If you want to communicate poorly, go ahead and use “capitalism” for “free market.” If you want to communicate effectively, don’t. It’s really that simple.
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doesn’t it really depend on whether the listener understands what you are saying? We’ve all been through this many times. If it becomes clear that the listener doesn’t understand what you mean by capitalism, you have to clarify or substitute some other terms. the same is true for market. Do we mean vouchers, contracting out military missions, cap and trade? These are all markets. For that matter, it is also true for “free market.” Same for “privatization”- talk about a corrupted term (see Social Security Privatization). Also: ownership. Remember the Ownership Society? And so on.
Then again, I’m still holding on to the word Liberal. It’s my top favorite.
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Defining and Refining “Capitalism.”
Just like the most important solution to the economic problems associated with the economic ignorance of these Dark Ages of economics is to define and refine property rights so too that is what is needed with regards the term ‘capitalism.’
Empirical capitalism is a more precise term since it reveals the methodology that underlies the errors and corruptions that follow.
Subjective capitalism is a more precise term and it almost instantly erases all association with the misuses and misunderstandings tied to the word ‘capitalism.’ And since it does a good job of erasing association with the blunders of empirical capitalism it provides a clean slate which then provides a great blackboard to use to educate people and to help them to leave behind the imbecilic and ego-driven ‘economics’ of the Dark Ages of economics.
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Right on, Sheldon. Leaving a thing alone requires no “ism”. An’ usin’ isms only stirs them up what’s got the opposin’ isms, anyhow. [Sorry, can’t get this James T. DuBois poem out of my head]
March 4, 2010 at 12:37 pm
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Exactly. It’s a matter of understanding the audience you are trying to communicate with. Some poeple will have no problem with the word capitalism, but others will. So it’s not the term “capitalism” that’s the problem–it’s one’s communication skills.
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Thanks for the advice.
March 4, 2010 at 7:24 am
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I think that Sheldon has a point. As much as I would like to stand firm, I believe that we should not imagine some dreamed up ideal capitalism but look at the real existing and historical phenomena.
I especially liked the elaborate and well argued historical case that Sheldon made. Capital accumulation as an defining aspect of the system we are talking about is present in many systems. Take Nazi Germany for example, even in Soviet Russia capital was accumulated. Thus the name state capitalism.
No, I think that the defining aspect of the system that libertarians want is the fact that it is free from violent government intervention. That explains the origins of markets, capital accumulation, private property and all the other features we so love about the free market.
Thus I choose to call my preferred social economic system the free market instead of capitalism.
March 4, 2010 at 7:47 am
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In some European countries, you cannot even consider calling yourself a liberal (the classic definition) any longer. It now means that you support government and politics in the market place in fascist way (and this word has been mangled so much too).
In Denmark, libertarians are called “liberalists” or “ultra-liberalists” by the left-wing media (ultra has a negative meaning, since “everyone” likes to be centrists, and a Danish center is left-center for an American). For the majority, capitalism equals crony capitalism, whereas they (the private industry/corporations) corrupts the government and the people (whatever that means). Not for me though, but like Vanmind said, I always argue that corporatism and government handouts doesn’t fit into the idea of the free market.
Progressives are really good word smiths, maybe we need to take up the trade of correcting the errors in semantics. We already have Thomas DiLorenzo to correct the errors of history
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Stephan why do you not link to Sheldon’s speech that started this discussion?
For those who would like to hear it:
http://www.youtube.com/watch?v=zSvoj76NRLM&feature=sub
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Von Mises has a superb discussion of some of these issues, esp. the critical role privately owned *capital* plays in a *market* economy, in Ch XV of Human Action (“The Market”).
March 4, 2010 at 8:22 am
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I propose we call a system with private ownership of the means of production “Hessenism”. Now, my question for Sheldon and other opponents of “capitalism” is: would a libertarian, free market be characterized by Hessenism or not?
Of course it would. We need some word to describe this system. Whatever word we use is going to get corrupted by our ideological enemies over time. I see no reason to keep falling back and changing terms. Capitalism, whatever its origins, semantically does mean the system of private ownership of the means of production. I prefer it to the term “Hessenism”, but could be persuaded to switch …
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Exactly right.
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Anti-libertarians of whatever stripe are opposed to private ownership of the means of production, not the terminology used to describe that system or any negative historical connotations entailed by that terminology. If you support such a system, anti-libertarians will attack you, regardless of what you call the system.
Also, I have to say that Sheldon Richman’s argument reminds me of what some socialists do: namely, admit that, yes, actually existing socialism was a horror show, but don’t worry, we really support something different (that, BTW, also entails abolition of private ownership of the means of production). There’s very good reason to believe, of course, that abolition of markets in capital goods will ALWAYS be a horror show; in contrast, there’s very good reason to believe that the (undeniably) shady aspects of historical capitalism do NOT detract from the overall desirability of such a system (or the undeniable positive effects historical capitalism, warts and all, had). So why object to the terminology? I really don’t see it.
March 4, 2010 at 9:46 am
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I have to agree that free enterprise and free markets, though they have been the traditional components of capitalism, no longer seem to be.
If you can call the joke of an economic system based on debt “capitalism” at all, what we have today is corporatism, or more accurately, CORPORATOCRACY, where large corporations are given licensed monopoly and gov’t-backed privilege around the world, and allowed to corner certain aspects of the market for what is rationalized by bankers and bureaucrats to be “the common good”.
Contrary to popular myth and belief structure, this is not “private ownership of the means of production”! Anyone with one eye and half a brain can tell there is little difference between a globalist liberal democrat and a neo-conservative advocate of “globalization”; that the fornication between pull-peddling bureaucrats, CEOs with golden parachutes and World Bank loansharks is so intense and intricate a time is coming when this will form the basis of authority, not only in America, but throughout the world – if that’s not the case already! -
But “the system of private ownership of the means of production” has coexisted with all kinds of pro-business privileges from the state–and has been regarded as capitalist without contradiction. Thus that is not the essence of the free, voluntary market.
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Perhaps, but, unless you are a primitivist of some sort, surely you support more than just a “free, voluntary market?” (And BTW, leftists have always been pretty adept at finding “coercion” underlying all kinds of truly voluntary interactions.) Surely you support something like an advanced capitalist economy, with markets in capital goods (by definition of such a market)? Or do you believe a standard of living well above mere subsistance level is possible without capital markets?
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Shame on you: You put the rabbit in the hat when you use the term “advanced capitalist economy.” You could have called it an advanced market economy. The term “free, voluntary market” logically would subsume a free, voluntary markets in capital goods. If I can trade the loaf of bread I (legitimately) own, I certainly can sell the flour mill or bakery I (legitimately) own. I’m surprised you felt the need to ask. I do believe that a high standard of living requires capital markets. Again, why do you ask?
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Well, I’m sorry but this seems like pure semantics to me. I would confidently say there would be no controvery in calling you a supporter of “capitalism.” And I would also say that if any leftists were curious enough to find out what you mean by “advanced market economy,” they would *still* find you objectionable, regardless of what you call your beliefs.
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It has also coexisted with war – and the states under capitalism have tended to be very aggressive because they are well funded. Conversely, very poor countries don’t tend to wage war on others. What do we do about that? What can we do? We oppose war and support capitalism.
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Or we oppose war and support free markets and the individual freedom and cooperation that underpins them. I see no reason to stick with “capitalism” given its tainted origins and today’s confusion about the term. What are we holding on to and why?
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Sheldon, we are “holding onto” the term because we favor a peaceful, prosperous, cooperative society with a concomitant advanced economy, which will of course be characterized by the widespread “private ownership of the means of production.” We need a word for this important concept, for this libertarian and good institution. You need to suggest a term for it if you want to take away the current term. “Free market” won’t do because even a primitive society could be described this way.
You can understand our reluctance to go along with the programme–we are–I, for one, am–suspicious that this is an attempt to switch to “free market” without being clear whether or not you still favor “private ownership of the means of production”, or whether the new term is favored because it is open-ended enough to be compatible with the quasi-agrarian, anti-modernist, anti-division of labor, unlibertarian views of anti-private property leftists. We libertarians do favor private property rights and the economic order that accompanies respect for private property, and that generates the prosperity that all decent, economically literate people favor. And thus we are reluctant to go along with semantic shell games that might be designed to broaden our definition so as to include ideologies that are actually incompatible with these.
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“Sheldon, we are “holding onto” the term because we favor a peaceful, prosperous, cooperative society with a concomitant advanced economy, which will of course be characterized by the widespread “private ownership of the means of production.” We need a word for this important concept, for this libertarian and good institution. You need to suggest a term for it if you want to take away the current term. “Free market” won’t do because even a primitive society could be described this way.?”
This strikes me as terribly weak as a defense of the word “capitalism.” If you say “free market” no one will even suspect that you might mean a primitive barter economy. Let’s get real. But if “free market” isn’t enough for you, then say “modern industrial free market.” There’s no need to use a word that strongly suggests that capital is a privileged category. There trouble lies.
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Stephan,
Depending on what it is you’re trying to express, different words may be appropriate.
(1) If what you want to express is “a peaceful, prosperous, cooperative society with a concomitant advanced economy,” what’s wrong with “industrial economy” or “advanced industry” or something like that? (Dunoyer described what he believed in as “industrialism.”) Or just “prosperity”?
(2) If what you want to express is specifically an economy characterized by “private ownership of the means of production,” then it depends on what you mean by “private ownership of the means of production.” If “private” just means “nongovernmental,” then cooperativists, mutualists, syndicalists, et al. are all in favor of that, too — workers are private citizens just like bosses and shareholders. In which case you may as well just say “a free market in capital,” or “a highly-developed free market in capital” or “industrialized free market in capital” if you really think your interlocutor is going to be confused about that.
(3) If what you want to express by “private ownership” is really something more narrow — that is, not only private ownership of the means of production, but a particular fetishized form of private ownership that you take to be the paradigm for private ownership — for example, private ownership which is primarily in the hands of entrepreneur-owners and absentee shareholders, and, in particular, primarily not in the hands of average employees, then go ahead and call it “capitalism,” if you want, but the important point is then that there’s no reason why it should be presumed that “we” are for that in This Movement of Ours. (But there are also alternatives, if you feel — as e.g. Roderick Long does — that the use of the term “capitalism” is too systematically confused to be worth the communicative trouble. For example, instead of “capitalism” in this sense, you might use “wage labor,” or “the separation of labor from ownership.”)
If, on the other hand, what you want to do is to come up with a term that will package-deal (1) with (2) and (3) all together, and pass it off as if it ought to be obvious to everyone that (2) necessarily produces (1) and that it produces it by means of spontaneously bringing about (3), then I’d suggest that this is better communicated by simply stating the connections you’re making, and perhaps giving an argument for them, rather than by trying to come up with a term that will bundle everything together without making the argument.
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Stephan: Well would that make us “industrial economists”? It just seems awkward.
Well, if you follow the Dunoyer route, it would make you an “industrialist.” Which has the awkward double meaning, since it also refers to a specific line of business that somebody might be in. But of course “capitalist” already has exactly the same awkwardness.
I’m a libertarian who happens to favor, as a libertarian, a free market economy, and the “industrial economy” that accompanies it. Fine.
That’s fine. I’m for that, too. Although we may disagree about what tends to best bring it about, I think we do at least agree roughly on the goal, and on the framework for achieving it (i.e, consensual exchange and production in free markets).
One one level, there is a semantic issue. I am hesitant to keep shifting groun to capitulate to our enemies.
I agree with you about that. But perhaps not about who “our enemies” — at least, the ones that we really need to worry about — are. The fact that the effective enemies of consensual society have so often capitalists (e.g. bankers, players within the military-industrial complex, copyright monopolists, etc.) makes me rather uneasy about trying to revise and radicalize the word “capitalism” to somehow outflank them, or curry favor with them.
If they are gonna demonize whatever term we have for our preferred economic order, then we might as well stick to our ground.
I am not so concerned about the origin of the term capitalism; works have meaning after a while.
Well, I agree that terms change their meanings with changes in use. My point in mentioning the origin of the terms was (1) to respond to a specific hyperbolic and misleading claim about the history of the term that Jeff made above; and also (2) to suggest that perhaps those uses of the term “capitalism” are still actually in common use today, including still being used in some technical senses by people who consider themselves “anti-capitalist,” but who mean to oppose something other than what you mean to support when you call yourself pro-capitalist.
I also think that the libertarians here advocating this change are sort of catering to two audiences: normal libertarians, and non-libertarians–those who are opposed to the legitimacy of firms, hierarchies, bosses, division of labor, absentee ownership–employment, landlords, and so on. Those who push self-sufficiency and what I think verges on primitivism and agrarianism. By saying you are for “free market’ it seems to be vague enough to leave open the possibility that a “real” free market does not permit “exploitation,” free market “corporations,” absentee ownership, and the like.
I think you’ve got the polarity wrong here. People who like to lay on the “free-market anticapitalist” line are very rarely concerned with talking about what a free market *won’t* permit. (Except perhaps to say that it won’t have, e.g., patents, copyrights, or other forms of protectionist monopoly.) If you look at Kevin’s writing or mine or Roderick’s or Sheldon’s, I think you’ll find a lot more references to what fully freed markets will permit than you will negative references to what it won’t — i.e., that free market activity isn’t limited to corporate-capitalist business as usual, and that free markets can just as well include grassroots mutual aid networks, formal and informal gift economies, wildcat unions, social investing, strikes, co-ops, and a bunch of other forms of free-market activism and positive alternatives that fit awkwardly, at best, with the notion of all-pervasive capitalism. The point is a positive one, not a negative one, which is intended to broaden, not constrain, people’s conception of what a freed market might include, and to encourage them to think about consensual, grassroots ways of getting what they want. Given that understanding, I don’t think it’s a vice, or even especially peculiar, to point out that free markets allow lots of different kinds of people to get what they want, and that if there is enough demand for alternatives to corporate capitalism, then people are going to supply alternatives.
I agree the left libs have made good points exposing vulgarity and corporatism. But I strongly disagree that there is any good reason to be “left-” as opposed to “right-” libertarian. We libertarians are way better than the left or right.
Well, perhaps you have a different understanding of what the terms “Left” and “Right” mean than we do, or are using it in a different sense from the sense in which we use it.
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Sheldon:
Yes, “the system of private ownership of the means of production” “has coexisted with all kinds of pro-business privileges from the state”. But of course private property rights are incompatible with the state itself and privileges from the state–which is why Hoppe defines socialism as “an institutionalized interference with or aggression against private property and private property claims”.I would agree “capitalism” is not the “essence” of the free market, but it is a critical feature of any advanced free market, if by “capitalism” we mean “private ownership of the means of production”. We need some word for “private ownership of the means of production”. What would you propose?
Further, some left-libertarians seem hostile to the idea of “private ownership of the means of production”. It is not the state entanglement with traditional mixed capitalism that they object to, nor is it the word “capitalism”–rather, they oppose “private ownership of the means of production”. They seem to be pro-self-sufficiency, communes, “coops,” “anarcho-syndicalism,” “wild-cat strikes,” quasi-agrarian, to favor “the workers,” etc., and hostile to: industrialism, modernity, the division and specialization of labor, “alienation,” “bossism,” “exploitation of workers,” “absentee ownership,” “landlordism,” “pushing people around,” and so on.
We can quibble over the best word to use to denote “private ownership of the means of production”. This is only a semantic and perhaps strategical/pedagogical issue. I think “capitalism” suffices; but another word would work, such as “Hessenism.” But the only reason I can think of for a left-libertarian to be reluctant to come up with a term we can use is (a) he thinks “private ownership of the means of production” is not a crucial aspect of any advanced free market order; or (b) he thinks, with the anti-private-property leftish “anarchists” that “private ownership of the means of production” (whatever you call it) is incompatible with libertarian-anarchism.
I believe left-libertarians are wrong in at least two respects. First, they are wrong to claim that libertarianism is “left” rather than right. It is neither. (See Walter Block’s “Libertarianism is unique; it belongs neither to the right nor the left: a critique of the views of Long, Holcombe, and Baden on the left, Hoppe, Feser and Paul on the right” .) We are not right, but we are not left, either. Both are equally wrong-headed and mistaken ideas, and the very left-right spectrum is based on fallacious premises. That which is good in leftism is already part of libertarianism. The left-libertarians are right to condemn corporatism and so-called “vulgar” capitalism, but libertarians already do this and know this, as standard plumbline libertarians (see my post Wombatron’s “Why I Am A Left-Libertarian”, noting: “yes we need to be aware that modern day “big business” is not pure; it’s too in bed with the state (as Rothbard, say, recognized long ago in criticizing Rand’s bemoaning of Big Business as being America’s most persecuted minority).”).
There is an implicit assumption that the standard, non-left libertarians are “vulgar” libertarians, but this is rarely stated explicitly nor are names named. But it is implied. For example in the back and forths over Wal-mart and “anarchist” window-breaking. It is not vulgar to admire and favor and defend modern industry and commerce that is based on “private ownership of the means of production.” By praising a profit-making firm that serves customers one does not automatically, implicitly, or even presumptively endorse the state privileges it receives or regulations or policies it may benefit from. By observing how Wal-mart serves the consumer in comparison to the state, one does not endorse state roads or transportation subsidies. One does not even “ignore” the distortions; we normal, Austrian-libertarians are well aware of the manifold ways in which the state distorts and corrupts the market. This is not news to us.
Second, they are wrong insofar as they oppose and criticize as being unlibertarian and unjust, the various catallactic aspects of a libertarian society, such as: division and specialization of labor, firms, (non-state-chartered) “corporations,” bosses, hierarchies, private ownership of the means of production (whatever label you guys will finally let us use for this), international and long-distance trade, industrialism, commerce, profit motive, “absentee ownership,” and the like. Hostility to these views is not libertarian; it is socialist, it is hostile to libertarianism and private property. To the extent “left-libertariansm” holds these views, it is not just an idiosyncratic subset of libertarianism–it is not libertarian at all.
They may succeed in taking “capitalism” from us. We have already lost “liberal.” In my view, we libertarians should not let “libertarianism” be wrested from us too.
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“Further, some left-libertarians seem hostile to the idea of “private ownership of the means of production”.”
I don’t see this (worker ownership is private ownership), but aside from that, I don’t know what this has to do with my lecture.
March 4, 2010 at 5:45 pm
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Hi Stephan. Considering that it is possible to create a commune somewhere with no absentee ownership, how do you call opposition to this principle un-libertarian ? Unless acts of aggression are committed to arrive at such a situation, I do not see that one thing or the other is libertarian or not. As for what the spirit of libertarianism requires, it is not up to you to decide for the entire planet what it does. As an illustration of this, you might oppose statism out of a desire for individualism, and others might oppose statism out of desire for communalism.
Is it the aspiration itself that gives a group (capitalist or communist) a libertarian flavor? Or is it the way the group is built and maintained ? Through consensus and non-aggression. On that logic, all groups that do not resort to violence in order to take their members hostage and perpetuate their policies against people’s consent are very much libertarian. On your logic, all groups that do not apply your preferences are very much un-libertarian, and I don’t find this libertarian at all. In fact, I find this elitist.
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Littlehorn:
Hi Stephan. Considering that it is possible to create a commune somewhere with no absentee ownership, how do you call opposition to this principle un-libertarian ?
I do not. People can do what they want under conditions of freedom. But to favor or predict this as the dominant mode of a free society is crankish or weird, in my view. To shun the division of labor and efficiencies of firms, international trade, specialization, etc., which will necessarily come with an advanced economy and will be the way to produce prosperity–so it seems bizarre to me for a libertarian to oppose this. But hey, to each his own.
But some so-called libertarians go further than this. They say that absentee or distant ownership is illegitimate. The workers come to own the factory–because they are physically there. They are squatters, in my view. This is unlibertarian, in my view. But if the communalists will respect libertarian property rights in their zeal to set up an inefficient workers’ regime–hey, it’s up to them.
Unless acts of aggression are committed to arrive at such a situation, I do not see that one thing or the other is libertarian or not.
If they say that tenants or workers acquire property rights in the property if their landlords or employers, by mere occupancy–that is unlibertarian. I will say this outright. Those mutualists and left-libertarians who think their views on occupancy are just at one end of the libertarian homesteading spectrum–are wrong. It is not libertarian. It is unlibertarian, in my view. See A Critique of Mutualist Occupancy.
On your logic, all groups that do not apply your preferences are very much un-libertarian, and I don’t find this libertarian at all. In fact, I find this elitist.
That is not my view, but what is wrong with elitism? It is certainly not unlibertarian. SEe Hope’s Natural Elites, Intellectuals, and the State.
March 4, 2010 at 10:55 pm
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Though I’ve yet to slog through Kevin Carson’s “Studies in Mutualist Economy” (which I honestly intend to do, so I’m withholding final judgment and maintain a slightly open mind), after reviewing quite a bit of back-and-forth between Carson (and other mutalists) and critics in the comments sections of C4SS and Mises.org, I’m leaning towards this conclusion as well:
Mutualism is not libertarian.
A mutualist argument that gave me some pause was the claim that after self-ownership and first-appropriator/homesteading “external” (non-human resources) property rights, there is no system of property rights that follows logically from those premises and therefore libertarian (“Lockean”/Rothbardian/Hoppean) property rights are no more or less legitimate than the Georgist or Mutualist (et al).
On the face of it, that claim did have me concede for a bit. But then I realized that if you have already recognized self-ownership and first-comer rights in external property, then the property rights system that DOES logically follow is the one of contract, meaning the voluntary exchange of title between legitimate property owners. If you do not recognize the right of an owner to contract with his property in any manner he chooses, then you do not really recognize him as the owner.
The “contract” property rights system is universally compatible with the libertarian system (I would claim they’re the same), but is NOT universally compatible with the mutualist system. The mutualist holds a subjective moral/philosophic value superior to the property rights of the two contracting parties. Whether it’s rejecting absenteeism, usury, or rent of capital, the mutualist claims, as a third party (or as the deceitful second party – something Carson denies as legitimate), a higher authority over the expressed will of those who up until that point, are considered legitimate property owners.
While a libertarian (qua libertarian) would not interfere with a “mutualist” contract, it seems clear that a mutualist asserts the right to invalidate/ignore a non-mutualist contract (establishing, for example, a land-lord relationship) by appealing to the philosophy as a higher authority and justifying their action with “well, if you don’t like it, acquire property in a region that respects your preferred property rights system”.
If that is not what mutualism advocates, then it is a meaningless philosophy in this regard. People who want to give their property away to “squatters” can already do so contractually, but if they choose not to (e.g., a rental agreement instead of a full title sale), and their contract is respected, then in what way is that mutualism?
Again, I’ve not yet read Carson’s book, so I when I say “the mutualist says this or that”, I’m referring to what I’ve read online which includes much of Carson’s personal responses to comments and arguments back and forth between prominent Austro-libertarians and Carson and his supporters/colleagues.
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Brian Drake:
A mutualist argument that gave me some pause was the claim that after self-ownership and first-appropriator/homesteading “external” (non-human resources) property rights, there is no system of property rights that follows logically from those premises and therefore libertarian (“Lockean”/Rothbardian/Hoppean) property rights are no more or less legitimate than the Georgist or Mutualist (et al).
That’s not what Kevin Carson says.
What he says is that accepting (the homestead principle and free market principles logically underdetermines one specific issue that pertains to private property in land — that is, the conditions under which land can be construed as having been abandoned by its prior owner, without an explicit declaration that it has been abandoned. (This is also potentially an issue with other forms of property, but it’s especially important with land, since people are much more likely to leave land behind than they are to leave behind movable property.) And he thinks that different communities in a free society may adopt different conventions for constructive abandonment which are more or less “sticky” (that is, in which it takes less or more effort to count as still holding property, and in which it takes more or less time before neglect can be taken to amount to abandonment). This is not obviously handled by a system of contracts, any more than what to do with a book you found left on a park bench can be straightforwardly settled by looking at the contracts that the prior buyer and seller of the book made with each other. They can make whatever contracts they want; but once ownership of the book is relinquished or lost, those contractual relationships stay only with the people who made them, not with the book itself. Maybe Carson’s right about that and maybe he’s wrong, but the issue does not at all have to do with some kind of global claim that every property rights regime imaginable is equally OK.
The mutualist holds a subjective moral/philosophic value superior to the property rights of the two contracting parties. Whether it’s rejecting absenteeism, usury, or rent of capital, the mutualist claims, as a third party (or as the deceitful second party – something Carson denies as legitimate), a higher authority over the expressed will of those who up until that point, are considered legitimate property owners.
This is perfectly absurd. If you’ve read Carson’s book, you’d know that he’s not for forcibly suppressing usury or the rent of capital. Neither were Tucker nor other 19th century mutualists. Unlike some libertarians I can think of, mutualists have not generally claimed that the prevalent forms of banking were violations of individual rights which could legitimately be banned under a Libertarian Law Code; their point, rather, was that those forms of banking would (they argue) be unsustainable and would be outcompeted by alternative arrangements in a market free of the Money Monopoly. (They held in turn that a free market in money would also have profound effects on patterns of capital ownership and landholding.) This is what Tucker meant when he said that Anarchist economics spoke in not in the language of decree, but of prophecy.
Anyway, I’m sure there’s lots that you might agree with and lots that you might disagree with; but what actually is there is importantly different from what you seem to think he’s saying. Why don’t you get back to us on this when you’ve read Carson’s book?
March 4, 2010 at 11:08 am
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Sheldon Richman said: “If you want to communicate poorly, go ahead and use ‘capitalism’ for ‘free market’.”
Wait. What’s wrong with *”free market”*?
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Nothing. Look at what I wrote.
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Oops. Sorry. Misread that.
March 4, 2010 at 3:11 pm
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“There is a term available that is seldom used now, but that was once the predominant and accepted label for the set of ideas related to personal freedom and responsibility. This is “individualism”—or rather “Individualism.”” – Stephen Davies in The Freeman (http://www.thefreemanonline.org/columns/our-economic-past-time-to-revive-individualism/)
Sometimes I think this is a decent option. Liberal, sadly, is lost to us. And though I describe myself as a libertarian, I have to agree with Hayek that it is an ugly sounding word. Ultimately, the key dividing line in political theory is collectivism vs individualism. Maybe Davies’ suggestion would make a good umbrella description for what people reading this blog believe.
March 4, 2010 at 5:41 pm
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Not that he would have a vested interest in all of this but one can help but wonder what George Reisman’s view on getting rid of the term (or title) “Capitalism” would be.
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Subjective capitalism
Subjective: characteristic of or belonging to reality as perceived rather than as independent of mind; modified or affected by personal views, experience, or background ; arising out of or identified by means of one’s perception of one’s own states and processes
March 5, 2010 at 1:15 pm
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When so few even want to discuss economic literacy in this country, to split hairs over terminology seems counter productive. As a babe of Austrian Economic thought, I am overwhelmed with how ignorant most Americans are of their own opportunities being squandered on a daily basis through our Statist-free market system. Everyone here knows whats wrong. To redefine one term, so all of you feel better about knowing whats wrong with the verbage seems pretentious. Why not focus our energy on educating the masses on the merits of smaller governments and individual liberty being the best way to counter inequality of capital use. The tax codes create this chaos because I am unfairly charged a tax on my labor that is truly not a capital gain. Our tax system creates a wedge between producers and consumers, owners and laborers because we tax all of us differently according to our labels. If we were all taxed the same corporations and laborers, maybe the country as a whole would see the benefits to “capitalism” if we were all allowed to control our own labor and the profits from without the heavy handed taxes that keep most of us from ever fully prospering. (Just a wet behind the ears view.)
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Oh and thanks for the insight from all of you. Very enlightening.
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For what it’s worth, Chris Matthew Sciabarra had an interesting commentary at HNN on this very topic a few years ago:
http://hnn.us/blogs/entries/10020.html -
Stephan writes, “I differ with you, apparently, on the need for or viability of some of the more Marxian-sounding worker-centric/communal/localist ideas.”
Worker centricism preceded Marx and was a theme of such libertarians as Hodgskin and Spencer and Spooner and Tucker (and his circle). It only sounds Marxist because libertarians stupidly abandoned it, presumably, under the “the friend of my enemy is my enemy” doctrine. IOW, “I don’t like Marxists. Marxists side with workers against capitalists; therefore I side with capitalists against workers.” Nonsense, of course.
Re left and right: within the broad category of libertarianism there are some important differences in emphasis and nuance that stem, in part, from the fact that many libertarians began as conservatives and retain vestiges of conservatism I need not elaborate here. The prefixes “left” and “right” are useful in referring to these differences.
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Richman [maybe you should change your name, haha]: “Hodgskin and Spencer and Spooner and Tucker”
Yes! I like the way you think. With a keen ear towards propaganda. Most people think on a level about this deep: Einstein smart. Mother Teresa good. J.D. Rockefeller/Monty Burns bad. You’ve got to figure out how to get in the right mental box for them. One can say all day long how he is not “right”, but when he blanches at “Marxian-sounding worker-centric/communal/localist ideas”, almost everyone will come to a certain conclusion about him. Remember Ed Crane and Ed Clark’s big winner, “low tax liberals”? I have the obverse impression of so many here: “no bomb conservatives”.
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Sheldon:
““I differ with you, apparently, on the need for or viability of some of the more Marxian-sounding worker-centric/communal/localist ideas.”
“Worker centricism preceded Marx and was a theme of such libertarians as Hodgskin and Spencer and Spooner and Tucker (and his circle). It only sounds Marxist because libertarians stupidly abandoned it, presumably, under the “the friend of my enemy is my enemy” doctrine. IOW, “I don’t like Marxists. Marxists side with workers against capitalists; therefore I side with capitalists against workers.” Nonsense, of course.”
We should “side with” neither workers nor capitalists; we favor freedom and property rights and the free market, which would contain a rich diversity of market actors and institutions, including workers and “capitalists”. Everyone benefits. The fetish with “workers” is not required by nor part of libertarianism.
“Re left and right: within the broad category of libertarianism there are some important differences in emphasis and nuance that stem, in part, from the fact that many libertarians began as conservatives and retain vestiges of conservatism I need not elaborate here. The prefixes “left” and “right” are useful in referring to these differences.”
Sure. Many libertarians start on the right. And some start on the left. But once one evolves out of these flawed ideas and is a libertarian, one is a libertarian. Libertarianism is neither left nor right. Both left and right are flawed and evil. In fact the very left-right spectrum is based on confusion.
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Mr. Stephan, are you suggesting that Marx or Tucker invented this “fetish”, or were just trading on it?
Maybe I missed it, where is the siding with conservatives or liberals? This entire discussion was about PR, right? Are you just against PR on principle?
I personally divide the world up into the 1% “players” and the 99% “played”. I want to help the played, whatever they are scared of (and whatever that is is what makes them “left” or “right”), reject the players and their schemes. A lot of the played who are ready to see the light consider themselves to be “workers”.
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For the record, I do not see this as only a matter of PR. It’s a matter of historical understand and therefore of ideological understanding.
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“Many libertarians start on the right. And some start on the left. But once one evolves out of these flawed ideas and is a libertarian, one is a libertarian.”
This doesn’t answer my point. To say “libertarian” leaves unresolved what type of libertarian. Since there are different types (including those that disparage labor and elevate capital), this is unsatisfactory.
I didn’t say we should side with workers or owners of capital (I side with both under free-market conditions). But there is much libertarian material that seems to side against labor and to elevate capital. I want to distinguish myself from it.
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Why, exactly, is the “enemy of my enemy” doctrine wrong? Maybe it is in specific cases, but I can’t see that it’s a general rule, as you seem to imply.
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Should say, I can’t see that it’s wrong as a general rule.
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Did I say it is wrong generally?
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“It only sounds Marxist because libertarians stupidly abandoned it, presumably, under the “the friend of my enemy is my enemy” doctrine.”
Pretty much you did, yeah.
March 8, 2010 at 3:10 am
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All words will inevitably be twisted and constant identity change is not a benefit to anything that wants to last. Anyone ignorant enough to not think past the name of everything is useless enough to be worth no effort. What should concern us is the misguided able mind. Constantly confounded laggards can be the caboose.
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Caley: “constant identity change is not a benefit to anything that wants to last”
I’m trying to square that with how the “progressives” put up a complete joke of a Presidential candidate and got 67 million votes (the other socialist got 58 million). How long have Fabians been around now? [sigh]
March 8, 2010 at 8:36 am
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We should use “capitalism” because we stand for the moral rehabilitation of the “capitalist” person. There is enough people tarnishing them. Of course most capitalists are not pure capitalist, because they have to deal with governments laws and regulations. But nonetheless,
I’m quite convinced that current successful businessmen would still be successful in a much freer society(much more capitalist society). Some are obviously fraudulent from a libertarian standpoint, but in our hyper-regulated environment it is close to impossible to have to become a significant capitalist without stepping on some other people feet.That ‘s why I will side with Professor Reisman, calling myself a pro-capitalist.
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In Capitalism: A Good Word for a Bad Thing, Kevin Carson argues that “capitalist” is an accurate term to describe the corporatist economy we have now. Thus, we should in fact be anti-capitalist, according to this, and contra Caplan (I side with Caplan).
Carson also writes,
“in common usage, among establishment libertarians and what passes for mainstream ‘free market’ wonks, any country that hasn’t adopted Marxian socialism as its official ideology is ‘capitalist.’”
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This assumption underlies most mainstream “free market” commentary in the business press and business news channels: even when they explictly refer to “our free market system” in so many words, they really mean a system in which most business enterprise is nominally “private.” No matter how statist a system of regulations is in effect, so long as they’re exercised primarily through “private” actors, and most money passes through the hands of such “private” actors rather than the U.S. Treasury, it’s a “free market” system. Hence, the kind of “free market” agenda you see at places like Heritage and the Adam Smith Institute for “privatizing” government functions by contracting them out to “private businesses,” even when those businesses are guaranteed a profit at taxpayer expense.It seems to me that by this argument that “free market” is just as bad a term as “capitalism” is for describing the …. free society that we favor (I don’t know what to call it any more). So, do we have to be anti-capitalist and anti-free market too? What terms are we permitted to use to describe our preferred social system?
Carson also writes:
“Mises answer to Rothbard above–aside from confusing a “market for capital goods” with a market for equity in firms–implies that, no matter how economically unfree, a country in which most business enterprise is absentee-owned by the owners of concentrated wealth, and most labor is hired for wages by such absentee owners, passes muster as “capitalist.” Presumably a country in which wealth was so widely distributed, and self-employment and cooperative ownership were such primary forms of social organization that stock trading was marginal in importance, would fall on the “socialist” side of Mises line–even if there were no regulatory constraints whatsoever on market exchange and the free movement of prices.”
Interesting point about how Mises equates capital goods with equity in corporations. I’ve wondered that myself. Still, the pro-”capitalist” (in the libertarian sense), is of course in favor of (real, not nominal) private ownership of all property, including capital, where firm-equity is just a subset of capital.
I don’t agree with Carson’s apparent view that absentee-owned property is not legitimate. I believe this view is unlibertarian, as I have noted in A Critique of Mutualist Occupancy.
I find astonishing his apparent/implicit claim that in a free society, you could have a prosperous, advanced economy based primarily on “coops” and self-ownership. But I’d be glad to have a free society so we could try it out.
March 8, 2010 at 6:28 pm
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Self-ownership? We can’t have that in a free society!
I assume you mean self-employment.
March 14, 2010 at 7:15 am
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I favor “free enterprise”.
“Capitalism” connotes cigar smoking, corporate fat cats toting bags of money.
“Laissez faire” is as often used perjoratively to describe dog-eat-dog competition, or careless indifference.
“Market” suggests some Invisible Hand deity worshipped by the Right that most of the world does not believe in.
“Anarcho-” anything says Molotov cocktail.
“Enterprise” means creative, problem-solving, boldly going where no man has gone before.
Other copy of comments:
My comment on the Mises cross-post:
Sheldon Richman March 4, 2010 at 10:22 am
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But “the system of private ownership of the means of production” has coexisted with all kinds of pro-business privileges from the state–and has been regarded as capitalist without contradiction. Thus that is not the essence of the free, voluntary market.
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Stephan Kinsella March 4, 2010 at 11:13 am
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Sheldon:
Yes, “the system of private ownership of the means of production” “has coexisted with all kinds of pro-business privileges from the state”. But of course private property rights are incompatible with the state itself and privileges from the state–which is why Hoppe defines socialism as “an institutionalized interference with or aggression against private property and private property claims”.I would agree “capitalism” is not the “essence” of the free market, but it is a critical feature of any advanced free market, if by “capitalism” we mean “private ownership of the means of production”. We need some word for “private ownership of the means of production”. What would you propose?
Further, some left-libertarians seem hostile to the idea of “private ownership of the means of production”. It is not the state entanglement with traditional mixed capitalism that they object to, nor is it the word “capitalism”–rather, they oppose “private ownership of the means of production”. They seem to be pro-self-sufficiency, communes, “coops,” “anarcho-syndicalism,” “wild-cat strikes,” quasi-agrarian, to favor “the workers,” etc., and hostile to: industrialism, modernity, the division and specialization of labor, “alienation,” “bossism,” “exploitation of workers,” “absentee ownership,” “landlordism,” “pushing people around,” and so on.
We can quibble over the best word to use to denote “private ownership of the means of production”. This is only a semantic and perhaps strategical/pedagogical issue. I think “capitalism” suffices; but another word would work, such as “Hessenism.” But the only reason I can think of for a left-libertarian to be reluctant to come up with a term we can use is (a) he thinks “private ownership of the means of production” is not a crucial aspect of any advanced free market order; or (b) he thinks, with the anti-private-property leftish “anarchists” that “private ownership of the means of production” (whatever you call it) is incompatible with libertarian-anarchism.
I believe left-libertarians are wrong in at least two respects. First, they are wrong to claim that libertarianism is “left” rather than right. It is neither. (See Walter Block’s “Libertarianism is unique; it belongs neither to the right nor the left: a critique of the views of Long, Holcombe, and Baden on the left, Hoppe, Feser and Paul on the right” .) We are not right, but we are not left, either. Both are equally wrong-headed and mistaken ideas, and the very left-right spectrum is based on fallacious premises. That which is good in leftism is already part of libertarianism. The left-libertarians are right to condemn corporatism and so-called “vulgar” capitalism, but libertarians already do this and know this, as standard plumbline libertarians (see my post Wombatron’s “Why I Am A Left-Libertarian”, noting: “yes we need to be aware that modern day “big business” is not pure; it’s too in bed with the state (as Rothbard, say, recognized long ago in criticizing Rand’s bemoaning of Big Business as being America’s most persecuted minority).”).
There is an implicit assumption that the standard, non-left libertarians are “vulgar” libertarians, but this is rarely stated explicitly nor are names named. But it is implied. For example in the back and forths over Wal-mart and “anarchist” window-breaking. It is not vulgar to admire and favor and defend modern industry and commerce that is based on “private ownership of the means of production.” By praising a profit-making firm that serves customers one does not automatically, implicitly, or even presumptively endorse the state privileges it receives or regulations or policies it may benefit from. By observing how Wal-mart serves the consumer in comparison to the state, one does not endorse state roads or transportation subsidies. One does not even “ignore” the distortions; we normal, Austrian-libertarians are well aware of the manifold ways in which the state distorts and corrupts the market. This is not news to us.
Second, they are wrong insofar as they oppose and criticize as being unlibertarian and unjust, the various catallactic aspects of a libertarian society, such as: division and specialization of labor, firms, (non-state-chartered) “corporations,” bosses, hierarchies, private ownership of the means of production (whatever label you guys will finally let us use for this), international and long-distance trade, industrialism, commerce, profit motive, “absentee ownership,” and the like. Hostility to these views is not libertarian; it is socialist, it is hostile to libertarianism and private property. To the extent “left-libertariansm” holds these views, it is not just an idiosyncratic subset of libertarianism–it is not libertarian at all.
They may succeed in taking “capitalism” from us. We have already lost “liberal.” In my view, we libertarians should not let “libertarianism” be wrested from us too.
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Or we oppose war and support free markets and the individual freedom and cooperation that underpins them. I see no reason to stick with “capitalism” given its tainted origins and today’s confusion about the term. What are we holding on to and why?
Jeffrey Tucker March 4, 2010 at 11:08 am [edit]
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Well, a major problem for me is that by getting rid of the term, and even claiming that we oppose capitalism, we make ourselves less comprehensible. Virtually everyone in the world understands that there is a battle between sociailsm and communism. Apart from small sectors of intellectuals dedicated to contradictory crossbreedings (anarcho-socialism, warmongering capitalism, etc.), it is widely understood that one stands for private ownership and free exchange whereas the other stands for public ownership and central planning. There is also the serious problem of attempting to erase 100 years of the history of thought here, so that we end up opposing what Mises, Rand, Hazlitt, Sumner, Hayek, Rothbard, and thousands of other writers supported – even though we have the same values. Talk about confusion! It seems like a much easier path to clarity by simply explaining what socialism and capitalism mean, as does Hoppe in this book http://mises.org/books/Socialismcapitalism.pdf written as a followup to all the above-named writers. There is a potential danger here in thinking that we can just reinvent terminology in one generation. Intellectual progress builds on what has come before and carries it into the future. Scraping an entire language and starting over doesn’t seem like progress to me.
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Sheldon, we are “holding onto” the term because we favor a peaceful, prosperous, cooperative society with a concomitant advanced economy, which will of course be characterized by the widespread “private ownership of the means of production.” We need a word for this important concept, for this libertarian and good institution. You need to suggest a term for it if you want to take away the current term. “Free market” won’t do because even a primitive society could be described this way.
You can understand our reluctance to go along with the programme–we are–I, for one, am–suspicious that this is an attempt to switch to “free market” without being clear whether or not you still favor “private ownership of the means of production”, or whether the new term is favored because it is open-ended enough to be compatible with the quasi-agrarian, anti-modernist, anti-division of labor, unlibertarian views of anti-private property leftists. We libertarians do favor private property rights and the economic order that accompanies respect for private property, and that generates the prosperity that all decent, economically literate people favor. And thus we are reluctant to go along with semantic shell games that might be designed to broaden our definition so as to include ideologies that are actually incompatible with these.
[Mises]
See also:
- Capitalism, Socialism, and Libertarianism
- The new libertarianism: anti-capitalist and socialist; or: I prefer Hazlitt’s “Cooperatism”
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