More on Wage Labor and Mutualism
Following up on a post I responded to this weekend, fellow blogger logicallypositive (whom I will be responding to directly and is heretofore referred to as “you”) posted:
that C4SS article I reblogged yesterday talking about the conditionally exploitative nature of wage labor basically made the point i’ve been tryign to make all along. wage labor is not exploitative as long as you can employ yourself. but it’s your good friend the government that makes that impossible with fun things like zoning laws, liscensing requirements, permits, etc.
I guess it leads me back to my central point: all exploitation can be traced back to the cartelization of brute, physical force. Exploitative economic relationships are only maintained because if you try to break free from them, then suddenly you find yourself locked up in a jail cell. Absent coercive forces, capitalism loses its intimidating fangs so many people are scared of. If they can’t beat you or imprison you for not playing by their rules, then it’s really rather harmless. It’s not an inherent trait of capitalism, it’s a result of a bureaucratic monopoly gone wild thanks in part to the influence of capital.
In responding, it is my hope to clarify a perceived misunderstanding.
First, your premise: “wage labor is not exploitative as long as you can employ yourself.”
I absolutely agree. If one is prevented from self-employment, chiefly by the state, then wage employment becomes eo ipso ”exploitative” as the employers are themselves necessarily agents and proxies of the state (either directly or by crony corporatist grace) since no one can self-employ in order to eventually become an employer. Even if self-employment is not completely obstructed, the more impediments to self-employment and entrepreneurship, the more exploitative wage employment becomes.
So here is where your word “can” is key. Can one employ oneself? The more easily one can - without the state interfering - the less the likelihood for relative exploitation, as it were. In other words: the more the state impedes in the ability to employ oneself in order to drive laborers to certain employers, and in turn the more individuals are thus employed by such employers, the more control comes under direction of the state since those employers are themselves wards of the state. The artificial elimination of choice shifts the scales of fairness away from the individual and in favor of the state and its agents and proxies.
And it is abundantly obvious that the labyrinthine legal and regulatory code is weaved with the thread of the larger special interests and connected cronies, thus weighing more heavily on the smaller competition. And there’s no smaller business than a self-employed entrepreneur.
As Rothbard argued: “our corporate state uses the coercive taxing power either to accumulate corporate capital or to lower corporate costs.”
In fact, I agree with the crux of an argument - though decidedly not all his points in making his argument - Kevin Carson (the mutualist author of the piece you posted) presented a few years ago:
[T]he state, by artificially reducing the costs of large size and restraining the competitive ill effects of calculation problems, promotes larger size than would be the case in a free market—and with it calculation problems to a pathological extent. The state promotes inefficiencies of large size and hierarchy past the point at which they cease to be worth it, from a standpoint of net social efficiency, because those receiving the benefits of large size are not the same parties who pay the costs of inefficiency.
Further, Austrians view entrepreneurs - an historically ambiguous term, but chiefly as promoter-entrepreneurs (the driving, “quick-eyed,” visionaries) and capitalist-entrepreneurs (the entrepreneurs who risk their own capital in their endeavors for profit) - as ultimate Homo agens.
Said Mises:
The driving force of the market, the element tending toward unceasing innovation and improvement, is provided by the restlessness of the promoter (entrepreneur) and his eagerness to make profits as large as possible.
More Mises, later in Human Action:
The driving force of the market process is provided neither by the consumers nor by the owners of the means of production—land, capital goods, and labor—but by the promoting and speculating entrepreneurs. These are people intent upon profiting by taking advantage of differences in prices. Quicker of apprehension and farther-sighted than other men, they look around for sources of profit. They buy where and when they deem prices too low, and they sell where and when they deem prices too high. They approach the owners of the factors of production, and their competition sends the prices of these factors up to the limit corresponding to their anticipation of the future prices of the products. They approach the consumers, and their competition forces prices of consumers’ goods down to the point at which the whole supply can be sold. Profit-seeking speculation is the driving force of the market as it is the driving force of production.
Murphy condenses the Austrian respect for the self-employed entrepreneur as such:
Following Mises, modern Austrian economists stress the primacy of the entrepreneur. At bottom, the entrepreneur simply buys low and sells high. But in order to do this, the entrepreneur must see an opportunity in the market pricing structure that others have overlooked.
By pursuing personal profits, the entrepreneur ends up rearranging goods in a way more pleasing to consumers. [There is] harmony between personal profit and service to others in the voluntary market economy.
Lachmann explains the crucial role played by the self-employed entrepreneur:
We are living in a world of unexpected change; hence capital combinations … will be ever changing, will be dissolved and reformed. In this activity, we find the real function of the entrepreneur.
Rothbard elaborates:
Every entrepreneur, therefore, invests in a process because he expects to make a profit, i.e., because he believes that the market has underpriced and undercapitalized the factors in relation to their future rents. If his belief is justified, he makes a profit. If his belief is unjustified, and the market, for example, has really overpriced the factors, he will suffer losses.
The profits and losses, in turn, inform the market (the various other economic actors) on what is viable. (Related: The Calculation Problem and Price Theory.)
But the mutualist position, which, again, is what Carson subscribes to, doesn’t end with simply advocating for the option of self-employment to not be obstructed. Mutualism sees all hierarchy, even truly voluntary (or euvoluntary), as problematic.
Confusion, however, is understandable considering Carson presented his argument as such:
As libertarians, we don’t want to abridge the freedom to contract wage employment any more than [the typical libertarian] does.. But we see subordination and hierarchy as undesirable. And we want to reduce, as much as possible, material constraints that promote entry into such authoritarian relationships.
His first sentiment flatly asserts that he adheres to the “libertarian” ideal of not wishing to interfere with “the freedom to contract wage employment.” All well and good… until we reach his “but.” It is in that contrasting conjunction where we find truth. The second sentiment belies his first, and through the use of “but” we learn that it is the second sentiment that counts. Wage employment is definitionally hierarchical. Carson goes one further and refers to wage employment as authoritarian (and he earlier describes a wage-paying workplace as an “authoritarian workplace”).
Ultimately, that is the mutualist position: (1) all hierarchy is illegitimate, exploitative, and intolerable, (2) eliminating the state would eventually lead society to eliminating hierarchy. Wage employment, thus, is illegitimate, exploitative, intolerable, and only prevalent because of the state. Indeed, the title of the post calls for the outright abolition of the wage system - a pillar of mutualism per Pierre-Joseph Proudhon himself.
As an Austrian anarcho-capitalist, I see it differently.
Not everyone is a visionary. Not everyone has the capacity to develop techniques in improving production methods. Not everyone has the capital to supply the start-up costs. Not everyone has the capacity or willingness to take risks. And even among those who do, not everyone will be successful. And among those who are successful, expanding business to meet consumer demands (and thus creating further wealth) would mean to expand production - and to do so requires different roles at different levels of productivity (i.e. labor), which establishes a natural hierarchy. And even those who are successful, they may not always be successful.
So for these individuals, wage labor offers the opportunity for employment without risking initial capital, offering insight on production methods, or being inclined to creativity and inventiveness in postulating future demands.
Here’s Mises again:
In the context of economic theory the meaning of the terms concerned is this: Entrepreneur means acting man in regard to the changes occurring in the data of the market. Capitalist and landowner mean acting man in regard to the changes in value and price which, even with all the market data remaining equal, are brought about by the mere passing of time as a consequence of the different valuation of present goods and of future goods. Worker means man in regard to the employment of the factor of production human labor. Thus every function is nicely integrated: the entrepreneur earns profit or suffers loss; the owners of means of production (capital goods or land) earn originary interest; the workers earn wages.
Rothbard explains that the wise entrepreneur is thus rewarded:
[The entrepreneurial] loser… receives his penalty in the form of losses. These losses drive him from his poor role in production. If he is a consistent loser wherever he enters the production process, he is driven out of the entrepreneurial role altogether. He returns to the job of wage earner. In fact, the market tends to reward its efficient entrepreneurs and penalize its inefficient ones proportionately. In this way, consistently provident entrepreneurs see their capital and resources growing, while consistently imprudent ones find their resources dwindling. The former play a larger and larger role in the production process; the latter are forced to abandon entrepreneurship altogether.
There is no inevitably self-reinforcing tendency about this process, however. If a formerly good entrepreneur should suddenly made a bad mistake, he will suffer losses proportionately; if a formerly poor entrepreneur makes a good forecast, he will make proportionate gains. The market is no respecter of past laurels, however large. Moreover, the size of a man’s investment is no guarantee whatever of a large profit or against grievous losses. Capital does not “beget” profit. Only wise entrepreneurial decisions do that. A man investing in an unsound venture can lose 10,000 ounces of gold as surely as a man engaging in a sound venture can profit on an investment of 50 ounces.
[It is a flawed] view that working for wages is somehow nonmarket or antilibertarian, and would disappear in a free society. … [H]ow [anyone] can say that a voluntary sale of one’s labor for money is somehow illegitimate or unlibertarian passeth understanding. Furthermore, it is simply absurd for him to think that, in the free market of the future, wage labor will disappear. Independent contracting, as lovable as some might see it, is simply grossly uneconomic for manufacturing activity. The transaction costs would be far too high. It is absurd, for example, to think of automobile manufacturing conducted by self-employed, independent contractors. …
[T]he emergence of wage labor was an enormous boon for many thousands of poor workers and saved them from starvation. If there is no wage labor — as there was not in most production before the Industrial Revolution — then each worker must have enough money to purchase his own capital and tools. One of the great things about the emergence of the factory system and wage labor is that poor workers did not have to purchase their own capital equipment; this could be left to the capitalists.
Contrast the above with Proudhon:
Mutuality, reciprocity exists when all the workers in an industry, instead of working for an entrepreneur who pays them and keeps their products, work for one another and thus collaborate in the making of a common product whose profits they share amongst themselves.
So your interpretation of Carson’s position - that wage labor is “conditionally exploitative” - is incorrect. To mutualists, wage labor is inherently exploitative because of its hierarchical (authoritarian, per Carson) nature.
This is what Carson implied when he mentioned “the culture of subordination in the workplace,” and “the economic power structures on which it depends.”
This belief ultimately stems from the mutualist shunning of anarcho-capitalist/libertarian understanding of private property in favor of a Marx-Proudhon distinction of personal property through the mutualist adherence to the labor theory of value and its corollary that the laborer must be the owner of the means of production. The employer/owner/capitalist, thus, is robbing the laborer of his full value.
Property is key to the argument here:
Improved productivity depends on capital goods, which in turn depend on delayed consumption. People who choose to delay consumption extensively can come to own a stock of capital goods beyond what they can physically use themselves. If such people cannot hire labor to work with those goods without thereby losing title, they will consume their capital and stop saving. …
A capitalist/worker arrangement is effectively an intertemporal exchange. Workers are advanced present money in exchange for enabling the capitalist to own and sell a future product. Abolishing wages would therefore be injurious to both would-be consenting parties in the exact same way that abolishing interest, another phenomenon of intertemporal exchange, would be. …
By rigidly yoking ownership with physical manipulation, anarcho-syndicalists [and mutualists] would severely constrain the public’s horizons by making it so those who provide for them can only do so in a severely limited variety of ways. Under [this] legal order, not only would shareholder/capitalists have to be workers and vice versa; they would have to be shareholder/capitalists in the same industry in which they are workers and vice versa.
Again, that would preclude innumerable mutually advantageous intertemporal exchanges, and plunge savings, capital accumulation, and future productivity to levels that are fathoms below what the public as consumers (users of final goods) would have preferred. The result would be starvation for most, and a return to a primitive, hand-to-mouth existence for the rest.
And Austrians (indeed - most libertarians, voluntaryists, and anarcho-capitalists), of course, also adhere to the idea that value is subjective.
Per Menger:
Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.
If you wish to dip your toe in mutualist waters, simply be aware of what lies beneath.
In this vlog I discuss two philosophical approaches to libertarianism: consequentialism and moral absolutism. I also make a defense of the consequentialist school, and also do some critiquing of the moral absolutist school.]…
I commend you for your thoughtful take, but as you may expect I have some counters I hope you’ll consider.
I disagree with your initial premise that the non-aggression principle is best as a personal code of ethics, but that it is not “constructive” for “a society that’s trying to get stuff done.” In fact, I would counter that it is the opposite - being essentially the “Silver Rule,” it is best suited for social constructs like government since it only details that which cannot be done to others and makes no requirements on what should be done. In other words, libertarianism and the NAP is incomplete as a code of ethics.
The market - the free exchange of consenting individuals making mutually beneficial decisions - “gets stuff done,” as you note in the video - and non-aggression is foundational to a free market. I understand that, as a minarchist, you believe there are certain aspects of society that are impossible to fulfill without the coercive force of the state (such as defense, of which I posted a reply to your minarchist case here). But just because the “stuff” that gets done in a given society may not be that which you find necessary doesn’t mean force is justified.
I tend to take the deontological approach more often than the consequentialist one, but I don’t think they are necessarily mutually exclusive. In fact, I sometimes find it difficult to divorce the two. Arguments for greater liberty tend to also be arguments against the inefficiency and ruination of central planning, bringing the moral deontological foundation of natural rights to a consequentialist conclusion of greater prosperity, happiness, choice, safety, etc.
Ultimately, I am not an amoralist as some libertarians and anarchists can be, I think, when utilizing a more Misesian framework. But even accepting a more “ends justify the means” approach, we cannot abandon liberty to achieve liberty - whether liberty is the moral goal or consequentialist goal. And by disregarding, as it were, natural law and inalienable rights and focusing only on the best outcome, the state (that is, non-voluntary force) remains an option. And while I can make the best of a bad situation by implementing gradual changes within the system (and would certainly take your system of government joyfully over any existing in this country today), the ultimate goal is to collapse the system of state dominion and coercion as it congenitally requires in most cases at least some loss of individual freedom. I suppose this makes me something of a Rothbardian radical.
Though of course I cherish Mises and Hayek, I have to quote Rothbard who best encapsulates my thoughts:
If liberty should be the highest political end, then what is the grounding for that goal? …[F]irst and foremost, liberty is a moral principle, grounded in the nature of man. In particular, it is a principle of justice, of the abolition of aggressive violence in the affairs of men. Hence, to be grounded and pursued adequately, the libertarian goal must be sought in the spirit of an overriding devotion to justice. But to possess such devotion on what may well be a long and rocky road, the libertarian must be possessed of a passion for justice, an emotion derived from and channelled by his rational insight into what natural justice requires Justice, not the weak reed of mere utility, must be the motivating force if liberty is to be attained.
When I considered myself a minarchist, though (not very long ago at all), I preferred and embraced more of a consequentialist approach because the logical conclusion of deontological libertarianism tends to be absolutism. I preferred the warm reasonableness of ostensible pragmatism and acquiesced to “necessary evils.”
Eventually, though, that levee broke: I realized that my self-ownership is absolute. What I viewed as pragmatism was merely a small opening for statists to wedge and erode my absolute rights further. The aforementioned “stuff” that needs getting done in society will be prioritized differently by different people, therefore transforming my self-ownership into something arbitrary and not concrete. Once liberty becomes subjective with exceptions and asterisks, the ethicality of the premise becomes shaky at best. Evil is evil - there is nothing necessary about it.
A code of morality cannot be structured through the exceptions of Hobson’s or Sohpie’s choices, where difficult decisions in tricky circumstances mold the entire framework of principles.
It comes down to one idea. Yes, an absolute one: you own you.
From this, we understand that no one else owns you. Conversely, you own no one else. Further, this ownership extends to ownership over your life, the decisions you make (liberty), and the products of your time and labor (property).
And from this self-ownership, the non-aggression principle emerges. If I aggress against your life, liberty, or property, I violate your ownership of yourself. If my aggression is actually self-defense, then it is justified because in your instigation you gave up that much of your ownership that approximates the violation against me. If, however, I aggress against you to prevent a much greater evil - then this is an exception for society and courts to sort out. The exception cannot be codified preemptively; self-ownership is not conditional to supposed utilitarian goals.
A state or government does not exist outside of this. What is immoral for a man to do cannot be made moral because a group of men calling themselves a government do it - even for truly beneficent reasons. Exceptions would again be assessed and judged as exceptions and not in anticipation.
Finally, there were a few other parts in your video I would not necessarily agree with (about taxes, corporations, financial regulations and the crisis of 2008*).
And although I would tend to agree with your statement “Society isn’t a mathematical proof, society isn’t a bunch of formal symbols and sets and algebraic formulae that you manipulate and combine. Society is fluid. Society is not rigid like mathematics.”… in context, I find it a particularly preposterous non-sequitur. That you perceive Rothbard’s style of argumentation and logical thought process as mathematical and apply that to his laissez faire philosophy simply doesn’t follow. Nothing could be further from Rothbard’s philosophy than to state that it is the belief that society can be “manipulated.” And Austrian economics specifically shuns mathematical models for a sociological (praxeological) approach - its methodenstreit.
In any case, my point in responding was not to quarrel on our differences but instead explain my deontological - or as you disparagingly call it rigid and absolutist - perspective.
When I was a minarchist, I also believed, as you put it, that “there are some things a monopoly government actually does better.” It took years of reading literature by the likes of Walter Block, Bob Murphy, Murray Rothbard, Hans Hoppe, Gustav de Molinari, et al. to come to grips that free society actually can function (and prosper!) absent the coercions of a non-voluntary state. In fact, the tipping point was a little paper called “Minarchy Considered” by Richard Garner (I know, who?). At first, I ridiculed it, then I was angry at it, but after some time marinating on it and other works - I came around.
As I’ve mentioned previously, I find greater merit in discussing those values and ideas all libertarians share than emphasizing the differences between us. Likewise as a minarchist resents an an-cap’s seeming aspersions of ideological inconsistency, so does an an-cap resent a minarchist’s claims of intransigent naïveté.
Personally, I think we’re better off tag-teaming actual statists.
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*(As an aside, I highly recommend “Meltdown” and “Gambling with Other People’s Money” as thorough explanations on the causes of the 2008 crisis.)
(Source: obamacarekush)
Re: Minarchist Argument for Defense
Basically my minarchist argument for defense is as follows. It needs some more refining but this is it in a nutshell.
For-profit mercenaries as the sole means of a nations defense does not work. This is because for one reason, I do not believe it reasonable to profitize and incentivise through monetary means the business of killing. Two, profits will not motivate a soldier, in a time of war, to defend his or her nation from attack. In a time of peace, one pays a mercenary/military army money to essentially sit around and do nothing. But in a time of war, a mercenary, who has no ideals or no principles outside of their allegiance to the dollar, will abandon one out of cowardice. As much as it sucks, nationalism is a necessary evil because it is only through nationalism that one can motivate a soldier to sacrifice their lives in a just war. And it is only through a politically-controlled governmental military that a sufficient culture of nationalism can be strewn in the soldiers such that they are willing to sacrifice their lives and put aside their personal identities to put all their efforts towards the war. Such nationalism never develops in a mercenary army because, as I stated earlier, mercenaries are only loyal to dollars, not to country.
One can potentially argue that a well-armed militia population is the answer, not a government controlled military. But where does the training of such a militia come from? Even if a militia is sufficient for the defense of a nation, a military still has to exist in order to instill the civilian militia with the necessary military skills, equipment and techniques to be effective. Take a look at the vast majority of NRA firearms instructors here in the US: the good majority of them either work with law enforcement or are active duty/retired military. In a stateless society, over time military culture willl erode, and with that military culture also erodes the effective training in firearms use and combat techniques because the source of such knowledge does not exist in a society devoid of political government.
A military is funded through taxation, and certainly taxation is nothing more than theft. But I think it’s a necessary theft that can be extorted in less-intrusive manners. Furthermore, all those cute liberties are kind of worthless if you’re just going to be subjugated by an aggressive and imperialistic neighboring territory.
Not so long ago, I would have agreed with you. Even now, I will concede that, in purely relative terms, defense and courts are the least illegitimate functions of a government.
But here is the fundamental question: If a person is unwilling to participate in the defense of the “country” in which he is residing - either by funding or fighting - how can you justify aggression against said person as a lesser evil (“necessary theft”)? In other words, if the lives and liberty of the citizenry are in peril from foreign aggression, how can violating the very same lives and liberty of the citizenry be the solution?
Suppose that if instead of a country being attacked, it was one man’s house. This man would likely defend his house, yes? He may even help defend a neighbor’s house if he feels that it would keep him from being attacked by eliminating the enemy before it gets to him (or merely if he felt charitable and neighborly). But what if he didn’t want to defend his house? What if he wanted, instead, to flee? To bargain with the attackers? Or even to die? Would you force this man to defend his house, or force him to pay someone to defend his house for him? And if not, then how can it be any less unjust to force him to fund or fight in defense of another’s house?
Practical concerns about viability of private defense are merely speculative, based on a Hobbesian assumption thoroughly addressed by Hoppe, Rothbard, Molinari, Block, amongst others. Further, these concerns, in my opinion, are immaterial to the larger concerns: Once you accept that the state can initiate force against its own populace for a greater good (particularly expressed as a consequence of market failure), there would soon be other “greater goods” that require violations of rights - as the current state of our country has shown*.
*Update: Case in point.
(Source: obamacarekush)
