Horwitz on Austrian Economics

The video that I critique can be found here: http://www.youtube.com/watch?v=SxWlD-feIZU

I just finished watching Steven Horwitz’s video and I thought I would make a couple of comments.  For those that don’t know, Horwitz is one of the leading Austrian economists and author of the book, “Microfoundations and Macroeconomics: An Austrian Perspective.” 

At 3:28 Horwitz claims that “We know that people react in predictable kinds of ways.  We know that if you try to prevent prices from moving to their market clearing levels, it will mess up people’s ability to figure out what people want and how to produce it most efficiency.”  However, as I’ve already shown, prices are administered and there is absolutely no mechanism toward market clearing.  If this is true, then according to Horwitz, the free market does not have the “ability to figure out what people want” nor does the market have the ability to produce commodities most efficiently.  I would also add that without market clearing, high unemployment could be a rule rather than the exception. 

The 4:10, the interviewer claims that Ludgwig von Mises predicted the fall of the Soviet economy in 1921.  If you are familiar with Austrian propaganda, you’ll have noticed that Austrians have claimed to have predicted all sorts of events in the past.  On closer inspection, you’ll find that most of the predictions are highly exaggerated, made-up, just wrong, or that a number of other people made similar predictions.  In this case, Mises predicted that the Soviet economy would collapse because the price system was administered by a central authority. First off, Mises made his prediction in 1921 but the Soviet Union didn’t fall until 70 years later!  If this is the case, I’m going to go out on a limb here and claim that we’ll have another stock market crash and North Korea is going to fall in the next 70 years.  Secondly, the Soviet Union didn’t fall because prices came from a central authority.  Mises was just plain wrong.  If we are going to play this game, we can say that Bakunin predicted that State Socialism would lead to a Red Bureaucracy.  At least Bakunin’s theory actually came true.  Third, there were a number of other people to claim the Soviet Union would fall including a number of socialists.  Horwitz agrees with the interviewer that Mises predicted the fall but then goes on to claim that Hayek (at 4:40) also claimed the fall of the Soviet Union.  However, neither Hayek nor Mises predicted why the Soviet would collapse.  The reasons for the Soviet collapse are extremely complex and the pricing system played a very minor role if any. 

At 7:24 Horwitz makes the outrageous claim that before 1913, the banking system in the US was fairly stable but then goes on to claim that the banking system during this time was “under significant regulation”.  So which is it?  At 7:53, Horwitz claims that Canada didn’t have the same problems of the US banking system but he fails to mention that the Bank of Montreal acted as a central bank during this time.  Even by 1866, western banks were alarmed by the growing power of the Bank of Montreal. 

At 8:04 Horwitz claims that “We know from the history of money that money itself grew not from kings declaring something money or someone investing money but through an evolutionary process that grew from barter into indirect exchange and gave us the things we call money.”  This is a complete myth that by now has been completely decimated by empirical evidence.  As David Graber states, “In fact, our standard account of monetary history is precisely backwards. We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around.”  In fact, it was states that created money which is now supported by a ton of historical and anthropological evidence.  As of yet, there is nothing to support the Austrian claim that money evolved from barter.

At 12:20 Horwitz claims that for a long time the Austrians have claimed that the Central Bank is the source of instability as though this is some original claim.  In reality, the claim is pretty much a common view among Keynesians, New Classicals, and a number of other schools of thought.  In fact, the first person to spot the housing crisis was Dean Baker who is a New Keynesian.  He claims that Alan Greenspan is the most responsible for keeping the interest rate too low for far too long.  However, I’m going to disagree with the above.  It is not the fault of the Fed but the banks themselves.  The job of the bank is to supply customers and those customers demand money.  It is vital to remember that banks are in the business to maximize profits just like any other company.  Home builders had unrealistic expectations about future profits and the banks were caught up in the same unrealistic expectations.  There is no reason to think that banks wouldn’t have been caught up in the same herd mentality, especially when everyone was making massive amounts of money.  In fact, in 2006 Moody’s assessed that the major problem with Freddie Mac was the fact that they wouldn’t engage in riskier loans.  After this assessment, Freddie Mac changed strategies because they were losing market share.  In other words, even a partially privatized Freddie Mac had a lot of internal pressure to compete with the market system to give out bad loans.  Without participating in giving out loans, banks risked hostile takeover by larger banks.  And this is exactly what happened.  Anyway, I’ll expand on this in another article because it requires a lot more information but one can see that empirical evidence points toward endogenous money

Austrians try to claim that the Central Bank is the main cause of inflation but there are a number of reasons for inflation such as increased employment, increase or decreases in the velocity of money, cheaper imports, movement in exchange rates, less bank credits, and falling commodity prices due to increased production.  At 14:00, I agree with Horwitz that if we look at the history of anti-trust laws that we actually find that it was big business who facilitated creating these regulations to dominate their competitors and that this practice continues to this day. 

At 18:10, Horwitz says that if states can’t plan their own economies, how could states possibly conquer other countries and plan their economies.  This is supposed to be an anti-imperialist view and I commend Horwitz for such a view.  However, states have and do conquer other countries and plan their economies.  Iraq is a perfect example.  It takes something as large as a state to conquer another country and employ a number of laws to enforce capitalism and the “free” markets.  Capitalism and “free” markets have spread around the world and it wasn’t voluntarily created by states or individuals.  Even assuming we remove this argument, why wouldn’t companies in our hypothetical libertarian society go to other countries and use foreign governments to distort markets in their favor?  That’s what private companies do today.  States are great for big companies as even Horwitz admits.  Therefore, this just seems to be another internal flaw of capitalism.  It basically incentivizes despotic behavior. 

At 19:20 Horwitz says we should open education to competition before eliminating government education all together.  Now, I’m all for getting rid of the public educational system but this idea that everyone will be able to afford it seems to be a major stretch.  I have two kids and I can tell you that child care is massively expensive.  In fact, it’s so expensive I’m a stay-at-home dad because it’s almost cheaper.  The ability for people to send their children to school these days requires pooling of the resources of the community.  A poor family or a single parent is not going to be able to afford such costs.  Furthermore, rich families are going to be able to send their kids to the best schools while poor families will get an inadequate education.  Therefore, we are just reproducing the same circumstances of today, tomorrow.  Furthermore, the market will shape the educational system.  The educational system supplies workers because capitalists have a demand for them.  Just like today’s education, you can expect to see the “best” educators will breed obedient students who can’t critically think about the world. 

At 19:40 Horwitz suggests that we should start moving from social security to something like IRAs and 401ks.  This would just be a Wall Street bailout and would allow speculators to gamble with people’s retirement money.  Even more problematic is the fact that we have been moving from a productive economy – one that actually makes things – to a financial economy where nothing is produced.  For instance, a bunch of speculators trying to guess how much Twitter is worth doesn’t produce anything. 

Image

 

But a much worthwhile question is: how isn’t this like the way Austrian’s claim the Federal Reserve works?  How wouldn’t this just inflate the economy on speculative assets?  At this point, our entire economy is resting on financial markets which are speculative in nature.  Basically, nothing is holding up the economy. 

At 21:05 Horwitz says that government programs have crowed out churches, synagogues, friendly societies, etc. which used to provide these services.  However he fails to mention that the standard of living has significantly increased and that when we refer to the services required, such as medicine, costs have skyrocketed.  Churches and friendly societies would have an extremely hard time providing even basic things such as blood, medicines, and medical equipment without going immediately bankrupt.  Horwitz claims that once we pull back on things like education and health, these groups will reemerge.  But why don’t we have them today especially when there is such as massive deficit.  For instance, why don’t we have a number of churches and friendly societies providing healthcare to the millions of people who don’t have it? And if we still have a major problem with homelessness which Horwitz says that government isn’t solving, then where are all these groups?

Horwitz at 22:21claims that Estonia is a success story but fails to mention the massive emigration nor does he mention the fact that Estonia has increased government spending. 

There was a lot more stuff to disagree with but that covers the majority of the interview.  

Advertisements
Posted in Uncategorized | Leave a comment

Critique of Austrian Price Formation

The Austrian School of economics holds that subjective preferences determine prices and supply and demand while some reject the idea that cost of production plays a central role in price formation.[i]  I will eventually touch on subjectivity and its many flaws but in this article, I would like to mainly discuss how prices form under market capitalism.  Prices are important to all theories of free market capitalism because without flexible prices, markets would lack a major self-adjusting mechanism.  Without a self-adjusting mechanism, markets will not clear and therefore, the free market will fail.  Below, I will attempt to show that in the real world, prices don’t adjust and that supply and demand only plays a minor role in price formation.  Instead, the vast majority of businesses ignore economic theory and instead rely on an accounting technique called mark-up pricing.   In this case, prices are administered and these prices are usually determined even before commodities touch the shelves.  When there is less demand for particular products, inventories decrease while prices remain the same.  When demand increases, inventories are increased in order to fulfill supplies but again, prices tend to remain the same.

I’ve summarized quite a bit so with that, let me unpack these concepts a little bit.  Markets are said to be self-adjusting, that is to say they fix themselves or are self-regulating.  Austrian economists believe that flexible prices are one of the many self-adjusting mechanisms.  We could say that prices are a market clearing device.  Market clearing is when the supply of a particular commodity is equal to the demand of that commodity.  For instance, suppose I supply a particular brand of soap.  If customers are buying them faster than I can get them on the shelf, I’ll raise my prices.  However, if nobody is buying my soap, I’ll lower the price until customers start buying them.  The happy balance of people buying my soap and my soap sitting on the shelf will find the appropriate price.  In this case, we could say that a particular price cleared the shelf.  At larger scales, the movement of prices is supposedly keeping the market functioning smoothly and the self-adjusting mechanism keeps everything in order including an economy with full employment.  While there is a sort of elegance to this story, it is only that, a story.

Israel Kirzner, a student of Lugwig von Mises states that “The theory of supply and demand is recognized almost universally as the first step toward understanding how market prices are determined and the way in which these prices help shape production and consumption decisions-the decisions that make up not only the skeleton, but also the flesh and blood of the economic system. Austrian economics thoroughly agrees with this.”  Kirzner goes on to say “There exists a “right” price, at which all those who wish to buy can find sellers willing to sell and all those who wish to sell can find buyers willing to buy. This “right” price is therefore often called the “market-clearing price.”  Supply-and-demand theory revolves around the proposition that a free, competitive market does in fact successfully generate a powerful tendency toward the market-clearing price. This proposition is often seen as the most important implication of (and premise for) Adam Smith’s famed invisible hand.”[ii]

So what’s wrong with this theory?  In 1936, a number of economists established The Oxford Economists’ Research Group with the aim of studying real world businessmen to see how they made decisions over the trade cycle and gather statistical information in Great Britain since 1924.  The Groups’ study shortly turned to how businessmen reacted to the interest rate and how prices were formed.  In their interviews, there were a number of problems to arise because The Group used the language of marginal economics while the businessmen lacked any such language.  Furthermore, what businessmen did and what was established economic theory were wildly different.  Business didn’t care about economic theory and used their own techniques for pricing.  One of the important results of these studies “was that businessman saw prices as non-market-clearing and not even designed to clear the market, while the members saw prices a[s] market clearing.”[iii]

“All of the members of the Group, except David MacGregor and Henderson, were confirmed marginalists and accepted the imperfect competition/monopolistic approaches to prices.  On the other hand, the information they received from the businessmen clearly indicated that the latter thought of prices in terms of some relationship to average total costs and totally ignored the marginalist approach to pricing.  In fact, businessmen paid no attention to margninal revenue or costs in the sense defined by economic theory….  The Oxford economists were shocked, to say the least.  But what caught their attention even more was the relative stability of prices over the trade cycle.”[iv]

One member influenced by Austrian economics, George Shackle noted his surprise of “the non-influence of the interest rate on the businessmen’s decision to invest because it revealed that uncertainty was the over-riding factor when they made their investment decisions.”  Another member of the group said they had “found no manufacturer or distributer yet who had ever been influenced in his decisions by the rate of interest.”[v]

So how does business set prices?  In a modern capitalist economy, rather than Crusoe’s Island or ancient bazaars, companies are interested in growing sales, entering new markets around the world, producing new products, and investing in future production.[vi]  Therefore, prices are considered “strategic decisions designed to meet these goals.”[vii]  In this case, we can say that the vast majority of prices are set by a price administrator.  What one should understand is that this is not some theoretical guess as to how prices work.  This is an accounting tool that almost every company in the world relies on.  One can even find a number of mark-up calculators online which determine how businesses should determine prices.  In order to determine the price, each company employs a method of its choice but it usually takes into account direct cost of the unit, the overhead costs such as Human Resource and advertising, rents, and a mark-up price.[viii]  The mark-up or surplus is the price over and above the price of the total cost of the commodity.  The mark-up is used for future investments, expansion of production, and allows companies to take up market share.

A further conclusion of the Oxford Group was that businesses set prices not just before the commodity hit the shelf but “well in advance of production.”[ix]  At this point, it becomes clear that prices are not “intended to clear the market” and that this “implies that the market itself is non-clearable.”  If prices cannot clear the market, a number of problems can arise such an increase in economic waste, income distribution becoming distorted, marginal productivity is invalidated, long term unemployment, and the effective use of resources will not be realized.

Instead of changing prices according to supply and demand, companies make inventory adjustments.  If there is a lack demand for a particular product, companies don’t lower prices.  Instead, companies decrease their inventory.  If their products are flying off the shelf, again, they don’t change prices but increase inventories.  In other words, when demand increases or decreases, production follows.  If one would like a simple example, go to a mall where they sell sports hats.  Each sports team is going to have different demand with the best teams having the highest demand.  If this is the cases, we should expect to see each team with different price tags.  Instead, all hats of the same model are priced the same regardless of the logo.  For teams that perform well, the companies increase inventories while the poorly performing teams have their inventories decreased — but all the hats remain at the same price.  Austrians believe that rapid price changes are needed for full employment but this is impossible with quantity adjustments rather than price changes.  While many would like to point toward clearance and liquidation sales, these are rare and in many cases, companies already account for these sales before production even takes place.

Since the time of The Oxford Economists’ Research Group, a number of studies have confirmed and reconfirmed their results.  However, it is not enough to have empirical evidence for mark-up pricing.  We need to understand the incentives involved.  To understand the problem with market clearing, it is important to define a couple of terms.  Fix prices are those commodities that are not up for bargaining while flex prices are those which easily move.  When one goes to the store, one does not haggle over prices nor are retailers “organized like auction markets or oriental bazaars where the retailer engages in individual price negotiation for each transaction.”[x]  In the real world, prices are already set and consumers can either take it or leave it.  In any modern capitalist economy, the vast majority of prices are fix prices (some estimates put fix prices as high as 70 percent).  While Austrians claim that the reason markets don’t clear is because of government intervention they ignore the empirical fact that a. most prices are fix prices, b. prices tend not to change during a trade cycle, c. there are a number of incentives to keep prices stable, and d. that many contracts are based on forward markets.

At this point, I would like to delve into the issues of incentives and why businesses don’t bother with supply and demand and set prices around cost of production.  First, setting prices allows companies to have stable prices over the course of time which allows them to make future plans for production.  As John Kenneth Galbraith states, “price stability also serves the purpose of industrial planning.  Prices being fixed, they are predictable over a substantial period of time.  And since one firm’s prices are another’s costs so costs are also predictable…. In 1964 the automobile firms had profits on sales ranging from five to over ten per cent.  There was security against collapse of prices and earnings at either level.  Planning was possible at either level of return.  All firms could function.  But none could have operated successfully had the prices of a standard model fluctuated, depending on whim and reaction to the current novelties….”[xi]  In other words, when capitalists make decisions today, they don’t expect their products or new projects to come to fruition tomorrow but a year or even two years from now.  Companies also have complex schedules for payments which may involve a number of other companies.  Therefore, companies must be able to plan and price stability allows them to carry out complex accounting actions.  Once production is set in motion, it can be extremely detrimental to change course especially if other companies are switching their prices on a regular basis.  One of the main features of mark-up pricing is that “they are stable in that they remain unchanged for extended periods of time and for many sequential transactions.”[xii]  This not only implies to large companies but small and medium sized firms as well.  For instance, Rufus Tucker had collected statistics going back to the 1830’s and had found that “administered prices were an historical and permanent feature of the American economy and hence not tied to the existence of big business…. Tucker established that prices which changed frequently and those which changed infrequently had both existed in the American economy since the 1830’s.  The explanation for the frequency of price change could not therefore be attributed solely to the size of the business enterprise setting the prices, since “big business” had not yet emerged in the 1830’s.”[xiii]  In brief, administered prices allow companies to function smoothly while fluctuating prices can lead to disaster.  Administered prices also give some degree of certainty for future income and therefore, firms are willing to invest in the future.  Without stable prices, firms would be gazing into an unknowable future and would hesitate to continue, create, or expand production.

Another reason for administered prices is to prevent price wars.  Price wars between companies can be catastrophic.  Even good companies can fall from simple accounting mistakes.  The fear of price wars has been a constant fear among capitalists in the United States.  In the early 1900’s, James Logan of U.S. Envelope Company referred to competition as “industrial war” and stated that “unrestricted competition, carried to its logical conclusions, means death to some of the combatants and injury for all.  Even the victor does not soon recover from the wounds received in the conflict.”[xiv]  In 1912, an American Tobacco Company executive stated that competition had almost led to the bankruptcy of the nation.  He stated that “Unrestricted competition had proven a deceptive mirage, and its victims were struggling on every hand to find some means of escape from the perils of their environment.  In this trying situation, it was perfectly natural that the idea of rational co-operation in lieu of cut-throat competition should suggest itself.”[xv]  There is a reason to believe this is true.  For instance, price competition squeezes profits in each company while “firms will be better off selling products at a loss than not selling them at all.”[xvi]  In his studies on highly competitive firms that come closest to a free market compared to larger oligopolistic firms, Nicholas Kaldor found that more competition was anything but ideal.  Larger companies were the best performing while highly competitive markets were highly volatile and were the worst performing.

Even when one looks at companies that change prices, we find a number of disincentives to changing prices.  “In studies of price determination, business enterprises have stated that variations of their prices within practical limits, given the prices of their competitors, produced virtually no change in their sales and that variations in the market price, especially downward produced little if any changes in market sales in the short term.  Moreover, when the price change is significant enough to result in a significant change in sales, the impact on profits has been negative enough to persuade enterprises not to try the experiment again.”[xvii]

On a side note, I don’t know why many consider more competition to be ideal especially when you consider that human beings are the gears that keep this whole operation running.  That means continuing to increase work speed, more uncertainty and fear of being replaced, and generally increasing the rat race of today.  It seems odd that we would even want to subject ourselves to social Darwinism especially when you consider the fact that after a certain threshold, more wealth has no effect on personal happiness or well-being.  Even worse is the fact that as capital spread overseas, we are seeing worldwide homogenization of people where entire cultures are being swallowed by Western consumer culture and values.

Another reason prices don’t adjust revolves around forward markets.  “A forward market is any market where the buyer and seller enter into a contractual agreement today for payment and delivery at specific dates in the future.”  In a capitalist economy, many contracts such as loans, rents, and leased properties are made by forward contracts.  Even many employment contracts are based on contracts that aren’t freely adjustable.  However, when one talks to many Austrians, they seem to believe that most contracts are based on a spot market, that is, a market “where buyers and sellers contract for immediate payment and delivery at the moment of the contractual agreement.”[xviii]

It is also important to realize that adjusting prices can be extremely difficult for entrepreneurs especially when we are referring to wages.  While entrepreneurs can increase prices with less problems, “[i]t is not at all easy to offset cost increases by raising prices by reducing wages or other costs.  Nevertheless, planning is greatly facilitated if prices and costs are stable.  Inflationary price and cost increases, moving unpredictably through the system, make long-term contracts impossible and everywhere introduce an unwelcome element of randomness and error.”[xix]

To conclude, if prices are not flexible in a capitalist economy, high unemployment could be the rule rather than the exception while resources will not be fully realized.  In other words, the free market does not and will not work as predicted.  I’ve demonstrated with empirical evidence that most prices are fixed and that there are major incentives to keep prices stable.  In fact, the stability of prices means the stability of capitalism.

Luwig von Mises states in Human Action that a free market is a clearing system when he says “The characteristic feature of the market price is that it equalizes supply and demand….” and that “[a]ny deviation of a market price from the height at which supply and demand are equal is – in the unhampered market – self-liquidating.”[xx]  However, this is clearly not the case.  One does not need government to keep prices from moving and there are numerous incentives to keep prices fixed.  Mises goes on to state “If the government is unwilling to acquiesce in this undesired and undesirable outcome and goes further and further, if it fixes the price of all goods and services of all orders and obliges all people to continue producing and working at these prices and wage rates, it eliminates the market altogether….”  Mises then describes this situation as a planned economy and states “The consumers no longer direct production by their buying and abstention from buying; the government alone directs it.”[xxi]  This is all very true but since private companies administer prices, then the same logic should apply.  If price is administered, then the concept of a free market is null and void and consumers ultimately no longer direct production – that task is left up to an authority.  The only “advantage” of a free market is that the ruling class changes hands – from the political class to the capitalist class.

Notes


[i] It should be noted that some Austrian do believe that cost of production plays a key role in prices such as Reisman, von Wieser, and Böhm-Bawerk.

[ii] Kirzner, I. (2000, January 01). The law of supply and demand. Retrieved from http://www.fee.org/the_freeman/detail/the-law-of-supply-and-demand

[iii] Lee, F. S. (1998). Post keynesian price theory. (1st ed., p. 88). New York City: Cambridge University Press.

[iv] Ibid., pp. 89.

[v] Ibid., pp. 88.

[vi] It should be noted that there is a primary sector such as basic supplies such as primary foods and basic materials which are highly influenced by supply and demand.  However, I’m speaking of industrial or secondary sector processes such as finished goods for consumption.

[vii] Lee, F. (2003). Pricing and prices. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (1st ed., p. 285). Northhampton: Edward Elgar Publishing

[viii] There are a number of methods for administering prices such as normal-cost pricing, target-return pricing, and companies which follow the lead of larger companies.

[ix] Lee, F. S. (1998). Post keynesian price theory. (1st ed., p. 95). New York City: Cambridge University Press.

[x] Lee, F. (2003). Pricing and prices. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (1st ed., p. 287). Northhampton: Edward Elgar Publishing

[xi] Galbraith, J. K. (1967). The new industrial state. (pp. 193-194). Princeton: Princeton University Press.

[xii] Lee, F. (2003). Pricing and prices. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (1st ed., p. 287). Northhampton: Edward Elgar Publishing

[xiii] Lee, F. S. (1998). Post keynesian price theory. (1st ed., p. 71). New York City: Cambridge University Press.

[xiv] Kolko, G. (1963). The triumph of conservatism: A reinterpretation of american history, 1900 – 1916. (1st ed., p. 13). New York City: The Free Press.

[xv] Ibid., pp. 14.

[xvi] Shapiro, N. (2003). Competition. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (1sr ed., p. 65). Northhampton: Edward Elgar Publishing Limited.

[xvii] Lee, F. (2003). Pricing and prices. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (1st ed., p. 288). Northhampton: Edward Elgar Publishing

[xviii] Davidson, P. (2002). Financial markets, money, and the real world. (1st ed., p. 70). Northhampton: Edward Elgar Publishing Limited.

[xix] Galbraith, J. K. (1967). The new industrial state. (pp. 253). Princeton: Princeton University Press.

[xx] Mises, L. V. (1949). Human action: A treatise on economics. (1st ed., p. 756 – 757). New Haven: Yale University Press.

[xxi] Ibid., pp. 759.

Posted in Uncategorized | 1 Comment

The Commons – Beyond the State, Capitalism, and the Market

It may surprise most individuals that many of our problems and debates in the field of political science, political philosophy and economics boil down to issues of property.  One of the purest forms of capitalism (classical liberalism), is supposed to be based on private property where individuals trade goods freely within a market system.  The system of state socialism – those of the USSR and Maoism – is based on state ownership of land and capital where a centralized body dictates what is best for society.  In today’s mixed economies, there’s a convoluted mixture of state lands and private property.  Many proponents of the Left claim that there needs to be more state ownership and regulations to prevent corporate malfeasance.  Many on Right claim the problems with corporate malfeasance are due to a lack of private property rights; the state oversteps its bounds by infringing on individual sovereignty.

The left-libertarian perspective is a synthesis between state and private property…or at least attempt to eliminate many of the problems associated with both state and private property.  Left-libertarians advocate self-managed commons in place of the state ownership and replace private property with personal possession.  The commons and personal possessions shouldn’t necessarily be seen as antithetical to state and private property but a reworking of the two concepts.  In both cases, we’ll find that the commons and personal possession share many of the positive aspects of private and state ownership while eliminating many of the negative features.

The Commons

Our inquiry begins with a simple question: who owns the world we’ve “inherited”?[i]  Who owns the air?  Who owns the forests?  Who owns the rivers, skies, and minerals that we all rely on?  Since the time of John Locke, most have come to agree that human beings have “inherited” the earth.  The commons are then the things we all share and can access such as water, oceans, minerals, air but this could also be extended to roads, libraries, parks, community gardens, plazas, civic centers, money, knowledge, green spaces, the internet, education, and things handed down such as culture and technologies.  In order to have a commons, you have to have commoners and in order to have commoners, you need a commons: the one implies the other.

However, a distinction needs to be made from the outset.  Most economists describe “goods” as either “private goods” or “public goods.”  Unfortunately, they sometimes neglect common goods.  In this case, I want to make an important distinction especially between public goods and common goods.    But first, private goods are those goods we buy that are specifically for personal use, such as a loaf of bread, a t-shirt, or an automobile.

Public Goods:  Public goods are those goods in which the state has control.  Parks, roads, libraries, national defense are all examples of public goods.  Public goods are supposed to meet local needs but in many cases, public goods are controlled by outside forces.  In this case, they can be mismanaged, fail to accommodate for local needs, and become corrupted by politicians.  Outside policymakers design laws, regulations, and rules not just to limit and disempower local people from employing their own resources, but also to perpetuate externally held power by restricting locals from making meaningful changes to controls.  Private companies exert influence on policy in order to benefit, either by directly affecting the design and use of public goods or by injecting budget cuts that lead to failure for public goods management resulting in the indirect benefits such as privatization.  Almost all public goods are outside of the public control and organized based on top-down planning.  While some public input may be considered, the members affected by the commons do not collaborate on the management.  “It has become clear that the state is not a neutral actor that truly represents the interests of the general public, but rather it reflects societal power relations.”[ii]

The Commons:  Ideally in the left libertarian perspective, the commons are designed and self-managed by the members who set the rules without restriction to meet their own goals based on local needs.   Local customs, ecological needs, ideas, and member profiles define the commons because they are maintained by those who share them.  All planning derives from the bottom-up so as to avoid bureaucracy and mismanagement.  Private companies have no control over the commons.  Therefore, members are free to create goods outside the domain of the market such as green spaces, hiking trails, sustainable technologies, and other essentials for improved quality of life.  The commons are based on horizontal relationships because each member shares power within them.  In other words, all members have a stake in the commons.  Collaboration and cooperation are key inputs because each member has an incentive to see progress and the best possible outcome.  Last, the commons are created and designed with the goal to maximize positive human elements within each individual and to benefit society and the community as a whole.  The commons are not for profit making and there are no incentives to waste local resources.  Rather, the natural incentive is to preserve them for future generations.

The people in a society founded upon commons orient themselves toward what is necessary for a good life, and not toward using more and more consumer goods.  They individually feel responsibly for what is common to all.  Consumerism, in contrast, undermines the commons and finally society as well, as it undermines people’s feeling of belonging to one another….. Economic, ecological and social crises are merging to form a single one, a crisis of civilization.”[iii]

Ever since Garrett Hardin’s paper “Tragedy of the Commons” in the journal Science, the concept of the commons has been ridiculed by economists and political philosophers alike.  The paper had many ideological supporters.  Neoliberals used his paper as a blunt object to anyone who didn’t agree with privatization while some on the left used his paper to turn the commons into public goods.  In Hardin’s article, he asks us to imagine a village and an open pasture (the commons) where herdsmen bring their cattle to graze.  It is in the self-interest of each herdsman to keep as many cattle on the commons as possible.  Hardin states:

“As a rational being, each herdsman seeks to maximize his gain.  Explicitly or implicitly, more or less consciously, he asks, ‘What is the utility to me of adding one more animal to my herd?’  This utility has one negative and one positive component….  Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd.  And another….  But this is the conclusion reached by each and every rational herdsman sharing a commons.  Therein is the tragedy.  Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited.  Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.  Freedom in a commons brings ruin to all.”

That last sentence should terrify anyone considering the idea of the commons and in fact, it has done just that.  However, there is one major problem: Hardin was wrong on just about every point from his mathematical modeling to history.  On first inspection, Hardin seems to make an important logical point.  One of the major problems with Hardin’s thought experiment is that it only applies to a “free-for-all commons” which have rarely existed in the past.  As with many thought experiments, reality is extracted which is probably why historians have referred to Hardin as “historically uninformed” and why Hardin eventually admitted that “it is clear to me that the title of my original contribution should have been The Tragedy of the Unmanaged Commons.”[iv]  Historically, villages and communities have never had ungoverned commons but in fact, have used a number of rules for occupancy and use.  As Nobel Prize winner, Elinor Ostrom has shown, there are many empirical cases (not thought experiments!) where commons have been used successfully for thousands of years without resource degradation… a complete reversal of Hardin’s claim.  Hardin and his ideological supporters would go on to extrapolate the concepts in his article to covering everything from oceans, parks, water, and even air.  Hardin’s article was popularized due to the fact that it enjoyed widespread attention from those in power.  As Ostrom states:

“Some scholarly articles about the “tragedy of the commons” recommend that “the state” control most natural resources to prevent their destruction; others recommend that privatizing those resources will resolve the problem.  What one can observe in the world, however, is that neither the state nor the market is uniformly successful in enabling individuals to sustain long-term, productive use of natural resource systems.  Further, communities of individuals have relied on institutions resembling neither the state nor the market to govern some resource systems….”[v]

The left-libertarian perspective is one such system which does not rely on the market or the state but use successful techniques to avoid degradation and overuse of the commons while producing sustainability and abundance.

Enclosure of the Commons

There have been a number of books written on the history of the Enclosure Movement, which took place during the 18th and 19th century when the English government along with rich aristocrats, took common lands that belonged to villages for raising animals and growing food and transformed that land into private property.  Fences and walls were usually built and peasants were removed, usually by force while aristocrats enjoyed the benefits of enclosure.  In short, the Enclosure Movement was the beginning of industrial farming and the end of village life.  Peasants that were removed eventually became the working poor in the factories of the industrial revolution.  Peter Linebaugh, says, “The “English enclosure movement” has belonged to that series of concrete universals – like the slave trade, the witch burnings, the Irish famine, or the genocide of the Native Americans – that has defined the crime of modernism.”[vi]  Before this time, villages tended to be self-sufficient were many of the local needs where met internally and strong community bonds existed.  One should not romanticize this time period but should realize that many important values were destroyed in the process of modernization and while the rich benefitted, the poor were marginalized to destitution. The above is a case of the Enclosure Movement mainly in England.  But one should realize that enclosure movements happened across the globe with similar results: the Rich became richer, while the Poor suffered.

Feudalism was a system where the serfs would tend to the lands but the owners – the royalty – reaped the benefits.  The word “Enclosure is a term that is technically precise (hedge, fence, wall), and expressive of concepts of unfreedom (incarceration, imprisonment, immurement).”[vii]  The workers were merely tenants.  Private property is the latest form of enclosure and the definition of private property keeps expanding.  When most people think of private property, they think of their home, car, and the clothes on their back.   But also included in the definition of personal property is the type of property that is protected by monopoly on resources and excludes others in order to extract rents and form hierarchical relationships.  To be clear, most agree that home and contents should be exclusively owned.  But what if I said a mountain or entire forest could be private property?  There is a magnitude of difference between your television and a mountain.  Yet they can be considered the same thing within the sphere of private property.

The main point of enclosure is to deny access by monopoly to the sources of life by the use of physical and deadly force.  Consider this!  A monopoly is exclusive control or ownership over goods by means of legal privilege. Once enclosure has taken place, a fee can be charged for access in order to receive the sources needed for life.  Once this monopoly is created, Proudhon observed that private property used a “Right of Increase.”  Proudhon defined the Right of Increase as “a sort of royal prerogative, of tangible and consumable homage – is due to the proprietor [land owner] on account of his nominal and metaphysical occupancy.  His seal is set upon the thing; that is enough to prevent anyone else from occupying it without HIS permission.”[viii]

In other words, a mountain might be the common inheritance of all but one person could have a monopoly on the entire mountain just as a state could have a monopoly on hundreds of miles of unused land.  Just like with feudalism, the Crown is replaced by the capitalist and the serf is replaced by the wage laborer.  Once a monopoly is established, Proudon noticed that the Right of Increase came in different forms, “if by land, FARM-RENT; if by houses and furniture, RENT; if by life-investments, REVENUE; if by money; INTEREST; if by exchange, ADVANTAGE, GAIN, PROFIT….”[ix]  The only way the serf would work for the king and the wage earner for the capitalist, is by a violent monopoly on our own common inheritance.

The New Enclosure Movement & the New Aristocrats

While many believe that the enclosure movement is over, it has only begun.  Over the last 30 years, with the introduction of neoliberal policies, we are starting to see our commons privatized at an extremely fast pace.  The knowledge industry, oceans, space, music, mountains, air, forests, waterways, software, genetics, culture, and even food seeds are held through power.  The privatized commons means we are turning over our most shared resources to private companies (the new aristocrats) to monopolize and benefit from them while commoners and consumers alike can expect to pay a fee for access.  We are seeing the destruction of the commons at an unprecedented pace and scale.  As this destruction is happening globally, we are in parallel destroying the possibility of a new society of abundance by creating a society of increasing scarcity.

Many on the Left would like to think that government can mitigate this process.  In reality, the government is at the source of the problem, symbiotic with private capital.  After all, government is creating new monopolies for private use of the commons and government is backing private monopolies by the use of force.  When government does manage to “protect” the commons, they tend to mismanage them.  In many cases, they don’t understand how the commons are used by the local community, create bureaucratic rules and regulation, and ultimately participate in the destruction of the commons.  There is need for a new alternative.

Abundance to Scarcity

Both private property and state property produce scarcity.  Mainstream (New Classical) economists proclaim that only free market capitalism can provide protection against issues of scarcity by market allocation.  Unfortunately, many economists see the world through an extremely narrow framework which creates a false dichotomy between state socialism and free market capitalism, considering no alternative. While market capitalism may work temporally at reducing scarcity, in the long run, they are the main producers.

This brings up the economic issue of rivalry.  Certain goods can be said to be rivalrous if one person’s use precludes another person’s ability to use it.  If I drink a soda, you can’t.  If I buy a car, you can’t drive that same car.  Not all goods are rivalrous.  For example, just because I watch a television show, that does not mean you cannot.

Ostrom has pointed out a major problem with the definition of rivalry.  In reality, there are degrees (or what she calls subtractablitity) in which “Other individuals’ opportunities for use are not necessarily lost due to one’s own use, but something is “subtracted” from them.”[x]  For example, there is a big difference between drinking water from a spring, which you can’t drink again, and taking all the water just for myself.  I have “subtracted” by taking some water but that doesn’t mean I’ve taken all the water because you can drink after me…although you can’t drink the same water I just drank.

Why is all of this important?  Mainstream (New Keynesian) economists have concluded that rivalrous resources should be managed by the market.  Non-rivalrous resources should be managed by the state.  This false dichotomy has created a real tragedy of the commons because the entire commons is being redefined to be considered rivalrous.  For instance, water is usually considered non-rivalrous.  But if I buy a lake then that transforms it into private property. I can bottle the water and make it a rivalrous good.

Connected with rivalry are excludable and nonexcludable goods.  In the above example of owning a lake, I have excluded others.  With private property, anything and everything could be considered excludable.  To take a current day example, thanks to new technology, music and software can now be copied indefinitely at no additional cost.  In other words, there is no scarcity.  But if you turn music into a form of private property, it becomes rivalrous, excludable, and you create artificial scarcity.  This means that owners of “private property” can now charge a fee.  Without private property, music is non-rivalrous, nonexcludable, and non-scarce.  The focus of neoliberal policies being spread worldwide is to take anything and everything and turn it into private property so that a very small handful of people can benefit from monopolies.  The state is being used to enforce these monopolies.

Let’s take another simple case: at this moment, most people don’t own the means of production i.e. the tools, factories, or workplaces which we need in order to produce necessities.  Every worker could have access – or be part owner- to the factory or workplace.  However, the monopoly of private property means that only a very select few have access.  Instead of having abundance, private property means scarcity; it means that the vast majority of people must rent themselves to another human being in order to survive.  There is also the example of knowledge.  Knowledge can be considered private property (in the form of intellectual property) meaning that only those with access can be informed about the hidden secrets of nature.  Sometimes at the expense of human life and suffering as it pertains to medical and pharmaceutical industries.  Instead of having degrees of rivalrous resources, excludability implies monopoly and monopoly implies scarcity and the redistribution of resources and wealth to the New Aristocrats.  Instead of market capitalism being the solution to scarcity, it turns out to be the source of additional scarcity!

Rules of the Commons

In her book, “Governing the Commons: The Evolution of Intuitions for Collective Action,” Ostrom has documented how different communities around the world have sustainably managed their own commons (many for over a thousand years) without resource mismanagement or resource depletion.  These commons include things such as fisheries, water ways, grazing land, forests and so on.  What she found was a number of highly successful rules that promote self-management, sustainability, equity, and mutual respect among commoners.

She has detailed eight principles for the commons:

Define clear boundaries for sharing.

This is perhaps the most important guideline for successfully managing and maintaining the commons because without boundaries, disputes can arise.  There is a need to set boundaries defining the use of neighborhood, local, regional, and global open access resources.  Community gardens, parks, roads, and resources required but not available locally are examples of open access resources.  The types of boundaries defined include such things as who uses what, how resources are planned and how sharing with other communities occurs.

Rules governing use are matched to local needs and conditions.

Clear rules for use must exist and should pair with the local needs and conditions.  If members live in a desert, they must abide by an agreed use of water resources that balances the need for drinking with planting crops.

Collective participation in rule-making.

Individuals affected by rules have choice and opportunity to participation in modifying and maintaining the rules.  This implies two things: self-managed direct democracy and localism.

Each level of community association must retain sovereignty.

Communities must be autonomous to allow for members to make their own decisions and design the commons in a way that benefits them.  However, reaching outside the community may also be beneficial.  However, if external groups try to govern the community, the commons break down as members lose control over their own resources.

Members must develop and participate in a system of accountability.

Members who are affected by the commons must be accountable to one another to make sure that behaviors are in line with other members.  This implies audit or monitoring of appropriation and provision levels of the users of the commons.

Graduated sanctions for rule violators.

People who violate rules must receive sanctions that vary depending on the offense and the frequency of the offenders violations.  Punishments range from the minimal to more extreme forms of punishments.  However, Ostrom notes that because “In these robust institutions, monitoring and sanctioning are undertaken not by external authorities but by the participants themselves.  The initial sanctions used in these systems are also surprisingly low.”[xi]  Therefore, the “costs of monitoring are low in many long-enduring CPRs [common pool resources] as a result of the rules in use.[xii]  Sanctions rarely come into play as commoners rarely break rules.  The incentives that drive people to follow the rule system are trust, character, and relationships.

Dispute resolution must be accessible and low-cost.

Disputes today, especially environmental issues, can take years where large corporation can carry out long-term delays and mounting millions of dollars while those affected have little chance of real justice.  Resolution needs to occur in a low-cost structure that provides everyone who shares the commons the opportunity to bring to light and solve disputes.

Nested and interconnected layers of responsibility allow for scalable and complex governance of the commons.

Large collections of interconnected social groups act as large scale societies that govern the commons in scalable, layered relationships.  As Ostrom says, “All of the more complex, enduring CPRs meet this last design principle…. Establishing rules at one level, without rules at the other levels, will produce an incomplete system that may not endure over the long run.”[xiii]  Nesting means that those affected can participate in decision making that affect them.  For instance, a large river that travels through a number of communities needs representation from all the communities affected.  This is a very large subject for which volumes could be written.  But in short, communities shouldn’t be viewed as tribal groups but “the integration of producers and consumers, many civil society organizations could evolve into local/regional councils and commons trusts, or perhaps form partnerships with them.  The increased participation and political choices offered to citizens through these new accountability structures would transform economic, social and political decision-making at all levels of commons (local, state, interstate, regional, and global).”[xiv]

When Ostrom looked at commons that were mismanaged, depleted, or communities that failed, what she found was a lack of many of the above guidelines.  Ostrom and her guidelines of successful commons are completely in line with the left-libertarian perspective.

The Left-Libertarian Alternative

Left-libertarians replace private property with personal possession and state lands with the commons.  Personal possessions are the things you own such as your home, car, television, clothes, and the stuff purchased for personal use from a store.  A possession is considered “private property” of the user because they hold a monopoly on that possession.  There tends to be an automatic assumption that when left-libertarians reject private property they reject personal possessions (homes, car, clothes, books, computers, etc.) and must advocate something akin to Stalinism or collective farming in China.  Perhaps it is better to say left-libertarians aren’t against “private property” but rework the subject.

Beyond personal possessions, everything is part of the commons including the air, oceans, water ways, forests, factories, workplaces, parks, libraries, roads, knowledge, music, education, culture, civic centers, etc.  The commons are not owned by any one member and in fact, shouldn’t be considered owned at all.  The commons are simply managed and when our society eventually dies, it is left to the next generation to manage.  In other words, nature (and its resources) has its own intrinsic value beyond what utility it can provide for human beings.  This is the opposite mentality of many private property advocates such as William Blackstone who defines private property as “that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.”

What the above implies is that left-libertarianism is decentralized and both anti-capitalist (anti-private property) and anti-state.  However, the above should not be confused as a society without boundaries.  There are a number of use rights, usufruct rules, sanctions, and self-organization which evolves organically within a framework based on local responsibility.  Simply put, the community self-manages the resources they share in common because they have the incentives and they do so in collaboration with others.

Let’s unpack the above a little to clarify some issues.  “Use rights” means individuals have the right to use resources in order to benefit from them.  For instance, a worker run firm is part of the commons, owned by no one, but it is the worker in that particular shop who has the use rights.  A person from another region can’t simply walk into the factory and start using tools because they don’t have use rights.  Left-libertarianism is a system of use rights and possession.  Communities only manage what they can manage.  If they can’t manage an entire forest, they may do so jointly with other communities. There may also be areas that remain unclaimed.  Those lands remain untouched until someone else can come along to use the land.  Some have concluded that left-libertarianism is system of “tribal communities” which misunderstands the commons.  Many commons are jointly used which is why left-libertarians advocate local commons, regional commons, and national commons.

Secondly, without state or private property, there is no monopoly of resources.  Decentralization frees organization to occur based on horizontal relationships.  When a user has an exclusive right to resources, they can deprive others.  This deprivation means organizations based on centralized hierarchies; in the case of the state, it means bureaucratic government and in the case of private property, it means capitalists, CEOs, and board-of-directors.  In the absence of private property, organizations have no centralized head(s), relationships have equal footing, and members share power.  The fact that all relevant decisions are made at local levels also means decentralization away from an overarching government that either lacks knowledge of local conditions or may mismanage them for political ends.

One of the main objectives of left-libertarianism is to integrate producers and consumers within the framework of self-management which implies a society based on localism, sustainability, and resilience.  Localism, sustainability, and resilience shouldn’t be viewed as separate entities but as an interwoven concept.  Like the village of older times, localism means that most of the needs can be met within the community including food resources, access to green spaces, clean water, entertainment, culture, civic centers, places to shop and work.  Localism means walkability, the capacity to walk (or bike) to any of these places without getting into a car and driving through suburban sprawl.  Localism also means that we aren’t shipping things from around the world to the local community.  More importantly, localism means that we take a closer look at our actions whether socioeconomic or political rather than ignore them or rely on outside help.[xv]

Sustainability is the capacity to endure through time by being aware and adapting to our ecological surroundings.  In fact, sustainable communities are those that work much like an ecosystem by recycling and reusing its own waste.  Just like nature, there is a web of connections that sustain themselves.  Energy, water, agriculture, and transportation should also be used in sustainable ways which means they are maintained with abundance in mind and preserved for future generations.

Resilience is the ability for a community to adapt or bounce back quickly from changes in the environment.  This requires a high degree of social capital with good communication and the ability to plan for future events while also having local autonomy.  Collaboration plays a key role in making sure the community promotes well-being and quality of life with an emphasis on future generations.

To describe a resilient community permaculturist Rob Hopkins states a community:

“…might include community-owned energy companies that install renewable energy systems; the building of highly energy-efficient homes that use mainly local materials (clay, straw, hemp); the installation of a range of urban food production models; and the re-linking of farmers with their local markets.  By seeing resilience as a key ingredient of the strategies and approaches that will enable community to thrive beyond today’s economic turmoil, huge creativity, reskilling and entrepreneurship are unleashed.”[xvi]

There is also a strong desire to create a credit or money commons.  “It is possible to organize an entirely new structure of money, banking, and finance, one that is interest-free, decentralized, and controlled, not by banks or central governments….”[xvii]  A credit commons could provide a self-sufficient community where credit is given “to those individuals and businesses that merit it and withhold it from those that do not, and for us to apply our talents and energies to those enterprises that enhance community resilience, sustainability, self-reliance and the common good.”[xviii]

Within this framework, progression toward abundance is possible. We can consider three types of abundance.  Information abundance which includes knowledge such as open source education, research and development including medicine and technology, software, research in academics, etc.  In a left-libertarian society, there is no need to keep nature’s secrets but an incentive to share with all.  When information is enclosed, many cannot benefit which chokes growth and progress.  Biological abundance “creates as much potential for abundance as information multiplication, and promises us a perpetual stream of ecological benefits as well as raw materials for industrial production.”[xix]  This means not only protecting the environment but also sustaining it using new techniques in farming and so on.  But most of all, it requires viewing the world through a lens that is more organic, holistic, and thinks in terms of future generations.

Last and most important is organized abundance.  The best way to think of organized abundance is analogous to the Biosphere 2 in Tucson, Arizona.  The biosphere is enclosed natural ecosystem sealed off from the rest of the world and meant to sustain life for long periods of time.  Inside the biosphere the size of two and one-half football fields is a rainforest, an ocean with a coral reef, a mangrove wetlands, a savannah grassland, a fog desert, an agricultural system, and a human habitat.  Organized abundance is similar by the fact that we have a totally sustainable system because it is designed that way.  As abundance economist Roberto Verzola states:

“The life cycle of every product must be reviewed to move towards true zero-waste production.  We have to increase throughput and flow rather than accumulate and then use up stock.  This is organized abundance, by design, when, through the right combination of production components, functions and processes, every byproduct is used in another production process and the whole thing is fueled by renewables.”[xx]

So within the framework of a designed community, there is a real chance of developing a society based on abundance.  However, many mainstream economists scoff at the idea and consider it absolutely impossible.  Humans have unlimited wants which might be true.  The real revelation is that abundance is impossible… within the framework of market capitalism.  Capitalism is a system that must continually grow or suffer the consequences of collapse.  Secondly, market actors can’t buy their way into consciously designed environments.  However, within the frame work of the planned commons, abundance is a real possibility.

One criticism of the commons comes from neoliberals and other proponents of free market capitalism.  From their perspective, the commons is a collectivized dystopia where mob democracy rules.  They claim that individual sovereignty is violated because an individual can’t own a mountain or lake… or any commons.  They believe that we should leave it to individual consumers to decide if a company like Walmart should survive.  After all, consumers know best.  These criticisms can be dismissed easily.  First off, the idea that democracy is mob rule (in freely associated organizations) is really a sales pitch for minority or elite rule.  Free market capitalists reject the idea that workers should have control and believe private owners should decide for everyone.  The same applies to our commons.  They don’t want the people who are affected by the commons to have a say.  They would rather hand the commons over to private companies (a small elite in society) so they can have a monopoly on resources to gain profits.

One common description of free market capitalism is that “a rising tide lifts all boats.”  This is the belief that the market is a holistic system which raises all the individuals in society.  If the market is a holistic system, then the institution of the market will shape everything within it.  In other words, the market will shape everything!  The market is perhaps the most thorough penetrating institution ever devised by human beings.  It reaches worldwide and determines everything from the way products are manufactured to the way communities are organized.  Markets will also dictate if communities are sustainable, resilient, or local while also determining the relationships of all members and how they interact with each other.  This is as true globally as it is locally.  What we are seeing with the global market is that we are shipping goods from all around the world resulting in a real tragedy of the commons: depleting resources, increasing pollution, and non-existent communities and cultural homogeneity.

The term “consumer knows best” is absolute nonsense.  Consumers don’t know what’s best because they lack the necessary information.  Consumers lack knowledge about the condition in which their goods were produced such as whether clothes were made in a sweatshop, if their meat comes from animals treated inhumanely, or if coercion or child-labor was used.  Consumers rarely understand how products got to the market such as the long-term scale or impact of distributions systems, the impact of production on the local environments where they were produced, or the complex relationships between vendors and subcontractors.  Consumers will unknowingly participate with their wallet in supporting despotic states, horrifying working conditions, and menacing environmental practices that they would otherwise be repulsed by.  Market participants can also act in ways that appear rational but on larger scales can be completely irrational.  For instance, one person driving their car is totally rational but when everyone does it, it leads to pollution, congestion, physical and social health problems, and the destruction of the environment.  The “consumer knows best” is a complete myth and only lead to irrational collectivism.

The organization of our collective resources is the largest factor shaping our shared reality, whether it is organized by free markets or by defining a shared Commons.  The difference between the two is compelling.  Free markets are based on irrational actors, none of which have any clue how they are shaping society.  Market capitalism leads to structural isolation where communities become fragmented and individuals become alienated.  In this environment, the commons are turned into valueless utility units but value “cannot simply be collapsed into a single scale of commensurable, tradeable value – i.e., price – and it occurs through processes that are too subtle, qualitative and long-term for the market’s mandarins to measure.”[xxi]  On the other hand, the Commons are deliberate, informed, and decisively designed and managed to flexibly maximize the attainment of the intentional goals of the members.  The result of an intentional Commons is whatever we want it to be.

Notes


[i] One common objection with the term “inherited the earth,” is the assumption that to inherit something, implies a previous owner.  There is also Proudhon’s term “property is theft” which is sometimes criticized on the same ground.  However, the term has a deeper insight and should be understood on the grounds that property can be “put aside” or misused.  For further clarification, see Shawn Wilbur’s discussion on the issue: http://libertarian-labyrinth.blogspot.com/2011/12/varieties-of-theft-and-property.html

[ii]   Kratzwalk, B. (2012). Rethinking the social welfare state in light of the commons. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 55). Amherst: Levellers Press.

[iii]  Bennholdt-Thomsen, V. (2012). Subsistence: Perspective for a society based on commons. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 84). Amherst: Levellers Press.

[iv]  McKay, I. (2012). An anarchist faq: Faq volume 2. (1st ed., p. 966). Oakland: AK Press.

 [v]  Ostrom, E. (1990). Governing the commons, the evolution of institutions for collective action. (p. 1). Cambridge: Cambridge Univ Pr.

 [vi]  Linebaugh, P. (2012). Enclosure from the bottom up. In P. Linebaugh & P. Linebaugh (Eds.), The Wealth of the Commons: A World Beyond: A World Beyond Market & Commons (1st ed., p. 114). Amherst: Levellers Press.

 [vii]  Ibid., pp. 30.

 [viii]  Proudhon, P. (2008). What is property?: An inquiry into the principle of right and of government (forgotten books). (p. 149). Central: Forgotten Books.

 [ix] Ibid., pp. 149.

[x] Helfrich, S. (2012). Common goods don. In S. Helfrich & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 61). Amherst: Levellers Press.

 [xi]  Ostrom, E. (1990). Governing the commons, the evolution of institutions for collective action. (p. 94). Cambridge: Cambridge Univ Pr.

 [xii]  Ibid., pp. 95.

[xiii] Ibid., pp. 101 – 102.

 [xiv]  Quilligan, J. B. (2012). Why distinguish common goods from public goods? In J. B. Quilligan & J. B. Quilligan (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 78). Amherst: Levellers Press.

[xv] There are some resources that can only be found or produced in certain regions such as copper, certain crops, and other potentially vital resources.  In this case, there are reasons to move resources from far off places but the goal is to be as local as possible.

[xvi] Hopkins, R. (2012). Resilience thinking. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 22). Amherst: Levellers Press.

[xvii] Greco, Jr., T. H. (2112). Reclaiming the credit commons: Towards a butterfly society. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 232). Amherst: Levellers Press.

[xviii] Ibid., pp. 232.

[xix] Verzola, R. (June, 2010). Building an economic theory of scarcity and abundance . Retrieved from http://copysouth.org/portal/sites/default/files/VERZOLA Roberto_Economic theory of scarcity and abundance EN.pdf

[xx]  Davey, B., Helfrich, S., Hoeschele, W., & Verzola, R. (2010, November). The abundance of the commons?. , Berlin.

[xxi]  Bollier, D., & Helfrich, S. (2012). Introduction: The commons as a transformative vision. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. xvii). Amherst: Levellers Press.

Posted in Uncategorized | Leave a comment

Institutions: Adaption and Maximizing Internal Traits

Institutions have a profound influence over the lives of the individuals they govern.  However, the public rarely talks about them or understands the concept of institutions.  I would like to speak about the importance of institutions from the left-libertarian perspective, as the subject is sometimes neglected within libertarian circles.  I will first define the institution and explain how they work.  I then investigate how institutions influence society and how society influences institutions.  I then cover the left-libertarian perspective on who should control institutions.  Last, I introduce the idea that institutions should maximize particular human traits and that left-libertarianism should be viewed as an evolving system with tendencies rather than specific institutional models.

In the following, I draw mainly from Institutional Economics and philosophers such as John R. Searle since they provide the most in-depth and comprehensive account of the subject.  Institutional economics (sometimes called American Institutional Economics or Old-Institutional Economics) is “an approach to economics that sees economic life as taking place within a social context” and views “human behavior as determined more by social factors than by deliberative individual thought.”[i]

Institutions:  A Brief Examination

Geoffrey M. Hodgson defines institutions “as durable systems of established and embedded social rules that structure social interactions.  In short, institutions are social rule systems.  They both constrain and enable behavior.”[ii]   Simply put, institutions are the structures within society that govern human interaction.  Institutions can include things such as government (congress, executive, military), economic institutions (private companies, brokerage firms, free market, money), legal institutions (private property, laws of the land), special-purpose institutions (church, schools, unions), and unstructured institutions such as family and friends.  Many of the rules that govern society are unseen.  In other words, they create norms and customs by which we live without our direct knowledge of their existence.  For instance, if one where to walk into a business seminar, individuals don’t need to be told to remain sitting, not to constantly interrupt the speaker, or make obscene noises even though there is no explicit rules before entering.  Concert goers realize the same rules do not apply as a business seminar and that it might be customary or even desired to act rowdy.  Therefore, if we change the institution, we change the way people interact with others, how they behave, and ultimately how they think.

When we look at institutions, we are penetrating behind the surface of the world we live in to see the rules that constitute our social lives.  But the rules are very different from those of physics.  Institutional rules aren’t imbedded in the physical world like the laws of gravity.  If institutional rules are not embedded in nature, where do they come from?  I hesitate to give too much of a philosophical account on this subject because it would be too time consuming.  But I will at least give a brief description.  We can define three primary structures which underlie institutions: collective intentionality, status function, and constitutive rules.  Philosopher John Searle suggests that institutional rules have their existence because people have come to collectively accept or recognize a particular status given to the institution. These are referred to as collective intentionality (sometimes called intersubjectivity).  This isn’t to say that one believes a particular institution to be legitimate.  For example, enough people in the U.S. believe in an institution called the “presidency.”  So collectively, people have to come to believe there is such an institution and will act accordingly by voting or recognizing George Washington as the first U.S. president.  Secondly, a status function is when humans “have the capacity to assign functions to objects, where the object does not have the function intrinsically but only in virtue of the collective assignment.”[iii]  For instance, a one hundred dollar bill is just a piece of paper.  But it has a status because enough people have come to believe that it has a particular function and that we can use that function to carry out particular tasks such as buying groceries.  Last, we have constitutive rules which are a number of guidelines and procedures such as driving on the right side of the road, rules of a game, or hierarchical private companies.  While institutions can be extremely complex and vary from states to paper money, “the principles that underlie the constitution of social reality are rather few in number.”[iv]  These three classes of institutions can be said to consist of a “single unifying principle” analogous to the atom in physics or DNA molecule in genetics.  As I mentioned above, the topic is a bit more complex; but the important point to realize is that human beings give power to institutions and they exist because we collectively accept them.

A more specific question to ask is: Why do we have institution in the first place?  There are a number of answers to this question.  But for the most part, people benefit from institutions because they make life easier and they allow individuals to associate with one another to materialize their desires.  We have gone from the days of hunting and gathering to acquiring massive wealth.  As libertarian-socialist, Robin Hahnel states, “institutions are the necessary consequence of human sociability…. Any institutional boundary makes some individual choices easier and others harder, and therefore infringes on individual freedom to some extent.  But abolishing social institutions is impossible for the human species.”[v]  I would like to return to the possibility in how an institution “infringes on individual freedom” later.

Many institutions are specifically designed or engineered to bring about particular results.  Capitalism is a system that distributes wealth and power.  The State acts as a monopoly on the use of force to control certain behaviors.  These institutions can be said to contain elements of rational action because they are designed with a number of rules, incentives, and relationships of power in order to create end results.  In most cases, the people who design the institution or those who head the institution tend to benefit the most from them.  Over time, institutions become normalized and individuals in society come to believe that the institutions that guide them are somehow natural or god given.  However, most institutions are the creation or byproducts of human beings.  In many cases, institutions become completely entrenched in society and within the minds of individuals.  Historically, as institutions age, they become invisible and people stop recognizing how they control human actions. In short, institutions just become part of the societal landscape.  But even when one does recognize institutions, even unjust ones, people “despair of ever being able to change it.  Yes, the distribution of property is unjust, and perhaps there is something unjust about the institution of private property itself, but there isn’t much that an individual can do about it, so the individual tends to feel helpless in the face of the institution.”[vi]

Institutional Effects on Society and Societies Effects on Institutions

In the following paragraph, Searle demonstrates the number of institutions that surround us by italicizing institutions Searle interacts with throughout his day:

quote[vii]

As one can see, humans are imbedded into world of institutions, many of them constituting the way we act, live, and socialize with others.  What’s interesting to note here is how little control we have over institution but how much power they exert over individuals and society.  Individuals are surrounded by unseen mechanisms that control human behavior and compel them to act in certain ways.  Depending on the institutions, they can help to liberate or they can cage us like rats in a maze.  Does that mean that institutions predetermine personality, habits, thoughts, etc.?  The answer is simply, no.  People who believe that institutions predetermine individual personality reduce themselves to mere automatons, remove human agency, and neglect to see the mechanism by which individuals change institutions.  Over the course of time, humans do tend to alter institutions especially when we consider that many ancient institutions no longer exists such as aristocratic feudalism or certain forms of slavery.  People do influence institutions, but only indirectly.  At the same time, we keep them functioning because we participate in them.  In effect, “by getting married a couple unintentionally help to reproduce the institution of marriage; by going to work the worker unintentionally helps to reproduce the social relation of wage labour/capital; by paying rent the tenant unintentionally helps to reproduce the social relation of landlord/tenant.  Thus social structures constrain and enable the very practice through which they are reproduced.”[viii]

It would be convenient to say that we could simply stop participating in unwanted institutions to dispose of them.  However, reality is more complex especially when you have to account for the fact that human survival depends on working for someone else to receive wages, we have to pay taxes or go to jail, or conform to specific customs or be ostracized.  Another problem develops because there is an interconnected system where economic systems connect to the state apparatus, social customs are formed by education, family and church, and all of these institutions influence one another.  As Richard Wolff states:

“…the economic aspects of society influence the noneconomic, and the reverse holds true as well.  For example, economic considerations certainly influence decisions about marriage and family, and family considerations likewise influence the economic decisions people make.  Economic calculations affect U.S. foreign policies, and foreign policy decisions make their marks on our economy as well.”  In other words this “view assigns no priority to economic over non-economic aspects of society as determinants of one another.  All the different aspects shape and are shaped by all the others.  No one part of society, neither the economy nor any other part, determines the whole of society.”[ix]

In other words, to act within one institution helps to reproduce other institutions which thereby changes social norms, customs, and culture.  In effect, one is unknowingly participating and reproducing systems of control with little influence and guidance.

Who Should Control Institutions? 

At this point, I would like to introduce a left-libertarian perspective on the subject of institutions.  Thus far, we have discussed what institutions are, how they function, and how they reproduce over time.  Individuals are born into a number of institutions which guide their life, thoughts, habits, customs, beliefs, and human action.  Why should it be that individuals are born into institutions or that they have very little influence over them?  The answer is pretty straight forward — especially when we are talking about our main institution such as the state (including the military, executive, legislation, etc.), private companies, private property, organized religion, media, and the educational system. All of the above have an organized hierarchy where power and control is distributed to the few and those members directly benefit from such organization.  An owner of a private company or the head of a church have little to no incentives to change the organization.  Instead, they exert massive power and control over the people they govern.  In many cases, institutional heads have been willing to use violence to uphold their power and status.

If it is true that institutions have massive control over the individual and society, it seems reasonable to say that the people who are shaped and affected by institutions should be the ones who directly control them.  However, institutions are a social phenomenon which influences a number of people.  The only way to have individuals influence institutions is by giving them direct control over them.  The above implies two important left-libertarian concepts.  The first concept implies that power is evenly distributed within the organization. For instance, in the case of the firm, all members share power rather than redistributing power to the top of a hierarchy.  Secondly, those affected by the institutions should have control directly proportional to how it affects their life.   To simplify this concept, let’s take a local community. It seems that I should have more influence over the local community than a community 500 miles away.

What I am suggesting is that individuals should be the ones to design and engineer the institutions that influence their life.  Only individuals have the incentive to make institutions fit their specific needs and the desire to fulfill their wishes.  The above necessitates a complete transformation of our main institutions especially since the vast majority of individuals have little say over the mechanisms that control their life.  The ecological, cultural, or economic problems facing the world today are so severe; tinkering with our institutions is no longer a viable option.  Times have changed especially in the last 200 years, yet our institutions remain relatively the same.  This is analogous to using a donkey to plow fields when we have better alternatives.  Emma Goldman explains, “Our institutions and conditions rest upon deep-seated ideas. To change those conditions and at the same time leave the underlying ideas and values intact means only a superficial transformation, one that cannot be permanent or bring real betterment. It is a change of form only, not of substance…”

One common objection is that people are not smart enough to create their own institutions because they lack intelligence.  There are a number of responses to this objection most of which are outside the scope of this article.  But a couple of points should be made.  First off, we don’t need to ask if people are intelligent enough because left-libertarians institutions have already existed and many of them remain today.  We even have schools where students K-12 self-manage their education without any problems.  During the Spanish Civil War, large parts of Spain became self-managed from the workshop to the community, again, with very few problems.  In places like Argentina, workers took over abandoned factories during an economic collapse and started production without hierarchy with huge success.  We even have common lands being used that are self-managed such as community gardens.  Secondly, institutions have what might be called a “constitution” with a number of rules, guidelines, and goals.  Once a constitution is established, members of the organization act within the framework.  Last, left-libertarians are not demanding that institutions be abolished, but they should be organized differently.

Intuitions can be, or should be specifically engineered to bring about particular results because they “lock into human rationality.”[x]  Institutions are social conventions and they don’t appear out of nowhere.  They are usually designed and those designs benefit the people who logically construct them.  The question to ask is: what should institutions be designed to do?

Institutions and the Maximization Process   

As stated before, institutions infringe “on individual freedom to some extent.”  Institutions are a byproduct of social interaction and even giving a gift or speaking a particular language fall within the category of institutions. Therefore, institutions are a permanent aspect of society.  Robin Hahnel makes the point that “The relevant question about institutions, therefore, should not be whether we want them to exist, but whether any particular institution poses unnecessarily oppressive limitations, or promotes human development and fulfillment to the maximum extent possible.”[xi]

In my opening paragraph, I stated that institutions “should maximize particular human internal traits and that left-libertarianism should be viewed as an evolving system with tendencies rather than specific models.”  I would like to answer the following questions below:

  1.  What does it mean to maximize particular internal traits?
  2.  What traits should be maximized?
  3.  Why and how should institutions evolve over time?
  4.  Why have tendencies rather than model building?

Institutions can bring about certain traits within individuals who interact with them.  In effect, an institution can empower the individual and allow certain behaviors, social norms, thoughts, and emotions to flourish.  For instance, workers’ self-management produces positive social attribute such as cooperation and autonomy.  On the other hand, private companies tend to maximize negative human attributes such as selfishness and paternalism.  While I’m painting with a broad brush and each case is different, on the aggregate, these traits do tend to appear in individuals within these institutions.

To maximize something means to increase as much as possible.  When I say, the “maximization process” I mean that we create institutions that maximize particular traits and values that allow for human flourishing.  The maximization process shouldn’t be considered a hard and fast rule or even a specific model.  In fact, each institution is very different and some attributes may not be needed or even wanted depending on the organization.  In each case, individuals design the institution rationally as possible with the goal to provide particular outcomes. It is important to realize that institutions and organizations work within a framework so there are boundaries that institution must work within.  Institutions are vastly complicated networks.  Economic institutions effect non-economic institutions, and so on.  While one may wish to sit around singing “Kumbaya, my Lord”, the external world is a factor that must be considered, otherwise, members suffer consequences.

The goal of left-libertarianism is to maximize positive human attributes within rational limits rather than anti-social ones.  Left-libertarians believe that many of our current institutions produce negative traits within individuals.  To quote Kropotkin, “When we ask for the abolition of the state and its organs we are always told that we dream of a society composed of men [and women] better than they are in reality.  But no; a thousand times, no.  All we ask is that men [and women] should not be made worse than they are, by such institutions!”[xii]  Again, this points to the need for individuals to design institutions rather than the select few who design them in their own self-interest as they do today.

Which attributes should we maximize within individuals?  As stated before, there are no set rules.  Most left-libertarians may suggest liberty be maximized in all cases but I believe this to be naïve in some cases.  For instance, if someone is teaching a course on knitting, it would seem strange to maximize the liberty of each individual.  You wouldn’t want someone to constantly interrupt or shout slogans during the course especially when it infringes on other people’s liberty.  Instead, it might be better to maximize creativity and self-reliance in such a situation.  There are many other values such as well-being, fraternity, self-directedness, integrity, honesty, justice, responsibility, reciprocity, equality, and other values that lead to an enriching life.  The whole point of left-libertarianism is to find positive traits and values and maximize them within rational limits so they are expressed within the individual that interacts with the institution.   To quote Aristotle, “The end and purpose of a polis is the good life, and the institutions of social life are means to that end.”

There is also the question of how institutions evolve over time and why they survive in the first place.  Anything that replicates itself or reproduces itself with slight modification, such as DNA, by definition will evolve over time.  Institutions are no different.  They replicate themselves and are slightly modified over the course of time.  Institutions shouldn’t be viewed as static, but dynamic systems that require alterations to make changes to the real world.  The term “evolution” is sometimes equated with progress.  However, Hodgson observes that “evolution does not drive towards some goal or destination.  Instead it carries the baggage of its past, in a typically haphazard, ongoing process of adaptation and selection.  It is important to dispense with all mistaken notions of evolution as an optimizing, goal-driven or necessarily progressive process.”[xiii]

One of the major problems with the state is that it has a hard time adjusting to changes.  Part of the reasons for this factor is that states are extremely large, centralized, and bureaucratic due to top-down planning.  Furthermore, because of the size of the state, when it makes mistakes, such as an economic mistake, it doesn’t just affect a small part of the whole but everything it governs.  Left-libertarians suggest that organizations be smaller, decentralized, and bottom-up institutions.  This type of organization is more suitable and adaptable to changes that happen in the real world.

Private enterprise also suffers because entrepreneurs lack sufficient knowledge of other market actors, use centralization, and top-down planning which minimizes the information and knowledge pool of its employees while also creating bureaucracies.  Kropotkin has also shown that “survival of the fittest” (a phrase coined by Herbert Spencer rather than Darwin), plays a much smaller and decisive role than mutual aid.  Instead of a society based on survival of the fittest, it would be better to have institutions based on resilience.  Resilience is “the capacity of a system to absorb disturbance and reorganize while undergoing change, so as to retain essentially the same function, structure identity and feedbacks.”[xiv]  Cooperation taps into knowledge pools which we otherwise wouldn’t have while also taking advantage of localization.  In any case, it seems odd to subject individuals and society to “survival of the fittest” as though it’s some positive virtue.  It’s not.  I suggest that left-libertarian institutions dispense with many of the negative attributes such as lack of information, a purely “survival of the fittest” mechanism, and move toward optimization, localization, cooperation, transparency, resilience, mutual aid, and rational goal setting.

I would like to suggest that left-libertarianism has tendencies toward particular institutions rather than rigid institutional models.  By tendencies, I mean “an inclination toward a particular characteristic or type of behavior.”  There are many types of institutions and it would be impossible to build models of each of them because the institution of money is vastly different from the institution of capitalism or the state.  Today, there are major dissatisfactions with our political and economic institutions especially because the public has little ability to control their intuitions and some even feel imprisoned by them.  Instead, left-libertarianism believes that those affected by institutions should be the ones to design them within a particular framework.  The framework uses institutions not to create invisible cages but to maximize positive internal traits. It is finally time for left-libertarians to start to talk about alternative institutions.  If we spend 95 percent of our time talking about the evils of the world and only 5 percent giving an alternative, we will sow apathy, helplessness, and powerlessness within society.  While the left-libertarian slogans such as “Against All Authority,” are perhaps clever, they are only that: slogans.  In reality, left-libertarianism is a socioeconomic and political movement which has tendencies toward the liberation of every human being.

NOTES

[i] Pressman, S. (2003). Institutionalism. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (p. 196). Northhampton: Edward Elgar Publishing Limited.

[ii] Hodgson, G. M. (2004). The evolution of institutional economics: Agency, structure and darwinism in american institutionalism. (1st ed., p. 424). New York: Routledge.

[iii] Searle, J. R. (2008). Philosophy in a new century: Selected essays. (1st ed., p. 32). Cambridge: Cambridge Univerity Press.

[iv] Ibid., pp. 30.

[v] Hahnel, R. (2002). The abcs of political economy, a modern approach. (p. 11). Sterling: Pluto Press.

[vi] Searle, J. R. (2010). Making the social world, the structure of human civilization. (p. 108). New York: Oxford University Press, USA.

[vii] Ibid., pp. 90-91.

[viii] Brown, A. (2003). Critical realism. In J. King (Ed.), The Elgar Companion to Post Keynesian Economics (p. 83). Northampton: Edward Elgar Publishing Limited.

[ix] Wolff, R. D., & Resnick, S. A. (1987). Economics: Marxian versus neoclassical . (1st ed., p. 134). Baltimore: John Hopkins University Press.

[x] Searle, J. R. (2010). Making the social world, the structure of human civilization. (p. 124). New York: Oxford University Press, USA.

[xi] Hahnel, R. (2002). The abcs of political economy, a modern approach. (p. 11). Sterling: Pluto Press.

[xii] Kropotkin, P. (2002). Anarchism: Its philosophy and ideal. In Dover Ed edition (Ed.), Anarchism A Collection of Revolutionary Writings (2 ed., p. 134). Mineola: Dover Publications.

[xiii] Hodgson, G. M. (2004). The evolution of institutional economics: Agency, structure and darwinism in american institutionalism. (1st ed., p. 44). New York: Routledge.

[xiv] Hopkins, R. (2012). Resilience thinking. In D. Bollier & S. Helfrich (Eds.), The Wealth of the Commons: A World Beyond Market & State (1st ed., p. 19). Amherst: Levellers Press.

Posted in Uncategorized | Tagged , , | Leave a comment

Anatomy of Collectivism: Social Body, Philosophical Collectivism, Institutional Collectivism, Communalism

Left-libertarians tend to use “collective” or “collectivism” in a number of distinct and perhaps idiosyncratic ways which could be confusing to someone new to the subject.  Below, I’ve tried to distinguish between the different types of collectives.  As far as I know, this subject has never been studied in-depth within the context of left-libertarianism.  I start with a simplest component of collectivism which is simply a group of people and then speak about whether these social bodies have an element which I’ll refer to as communal.  I then broach the subject of philosophical collectivism and ask whether left-libertarians adhere to the philosophy.  Last, and perhaps most importantly, I discuss what kinds of social bodies left-libertarians reject and advocate. 

Social Body

A “collective” is simply a group of people or a social body.  This can include things such as a family, workplace, town, village, association, sports team, friends, a free market, race, church, civic group, internet forum, school, creed, et cetera.  We are surrounded by collectives in our everyday life and the vast majority of people are a part of some type of collective.  People freely chose to join collectives because in many cases, they make life enriching, allow individuals to pursue their own goals, and give a sense of fraternity.  Collectives don’t just make individual lives healthier but enrich society as a whole.  For instance, one may choose to join an association that rebuilds homes for victims of a storm because they feel a deep desire to help others while also making personal connections.  At the same time, the homeowner receives the benefits while the neighborhood and community at large are rehabilitated. 

A social body can  be described by its size and the intensity of the relationships involved.  For instance, a family is a small collective involving very few individuals while the relationships can be said to be more intense, that is, the bond of the collective tends to be stronger.  Friendships tend to have more members but the intensity decreases slightly.  We can then move to the workplace and then on to neighborhood, to the community, to the region, to the nation, and finally the earth.  Recognizing the importance of this characteristic in social bodies is valued within left-libertarianism because it recognizes the individual first and that these individuals should have influence over the things that directly affect their life.  This simply means that the region isn’t prioritized over the individual but that the individual should affect the region. 

Communalism

There are times when left-libertarians use the term “collectivism” in the sense of communalism rather than a type of organization or a philosophical belief.  Sociologist Robert Putnam describes communalism as “social capital” as opposed to physical capital (tools, machines, computers, etc.).  He makes an analogy that “Just as a screwdriver (physical capital) or a college education (human capital) can increase productivity (both individual and collective), so too social contacts affect the productivity of individuals and groups.”[i]  To make this clearer, Putnam is saying that social contacts don’t only allow for human flourishing but also allow for collective growth. 

Social bodies can be defined along a gradation from very communal to very fragmented.  What creates communalism in many cases is proximity and opportunity to communicate or affect others.  In a communal social body, members are tied to each other in some way which could be spiritual, ideological, locational, et cetera. Communalism can take many different forms such as fraternity where members share a common goal or a neighborhood community where members care for one another.  This should not be confused with group think for community and fraternity “does not assume that our struggles are the same struggles, or that our pain is the same pain, or that our hope is for the same future.  Solidarity involves commitment, and work, as well as the recognition that even if we do not have the same feelings, or the same lives, or the same bodies, we do live on common ground.”[ii]   

In a fragmented social body, members have very little in common and in many cases feel little or nothing toward other members.  For instance, we could say a small tightknit community is communal but a home located in suburban sprawl where members rarely interact could be said to be fragmented.  Left-libertarianism views communalism as being fundamental for human development and well-being.   People are social animals and we find meaning when we connect with others.  Research on the subject finds that social bonds have an effect on stress levels, personal happiness, mental states, and even physical health.  Communalism gives a sense of value, of belonging, well-being, and communalism helps us to achieve goals.   On the other hand, fragmented communities tend to lack social support, civic or community organizations, social bonds, and thereby create social alienation, ill health, isolation, and lack social engagement. 

One should always realize that there is a flip side to communalism and one should not overly praise or romanticize the subject.  Communalism has the ability to produce negative side-effects such as, create “in groups” and “out groups,” become ripe with gossip, and even produce hierarchical relationships.  Communalism isn’t necessarily a type of organization, so it isn’t something to reorganize and expel these negative occurrences.  All organizations can have negative qualities but there are techniques to overcome them.  One way of dealing with negative consequences is to allow members to express their concerns, dissatisfactions, beliefs, and air concerns of injustice.  These can be informal meetings and once members express these opinions, they tend to feel better while others can take action to correct the problem(s).  Secondly, there are groups that we could say are communal with fraternal ties such as the Church of Scientology and the KKK.  Just because a collective is communal doesn’t automatically mean they are a healthy part of society.  Left-libertarianism fights against groups that decay the well-being of the larger social body as I discuss later and in my last post on the Anatomy of Power and Authority. 

Philosophical Collectivism

Philosophical collectivism is the belief that one should submit themselves to a group or institution in the belief that the group’s goal should triumph or be superior to the individual.  All left-libertarians reject philosophical collectivism.  As Iain McKay explains, “the idea that individuals should sacrifice themselves for the “group” or “greater good” is nonsensical.  Groups are made up of individuals, and if people think only of what’s best for the group, the group will be a lifeless shell.  It is only the dynamics of human interaction within groups which give them life.”[iii]  At the same time, left-libertarians realize that all human action can have an effect on others, that groups are interdependent.  Interdependence means that humans are intricately tied not only to other members but the environment for our very survival.  As Kropotkin states, human beings have “a tendency towards the fullest freedom of the individual in the prosecution of all aims, beneficial both for himself and for society at large.”  In other words, what might be best for the individual can be healthy for society as a whole.  At the same time, what is good for society, might be good for the individual.  Therefore, the left-libertarian “considers society as an aggregation of organisms trying to find out the best ways of combining the wants of the individual with those of cooperation for the welfare of the species.” [iv]  While left-libertarians reject philosophical collectivism, they do realize that there are some legitimate aspects behind the ideas such as interdependence and that individuals can influence the whole and vice versa.   While left-libertarians reject philosophical collectivism, one should not automatically assume that they adhere to philosophical individualism because they ultimately reject both (this is a subject I’ll cover in another post).  It might be better to say that left-libertarianism synthesizes elements of both while discarding many of the negative aspects of philosophical individualism and collectivism. 

Institutional Collectivism

Left-libertarians are often accused of being philosophical collectivists.  One might sympathize with this misunderstanding because some left-libertarians refer to themselves as “libertarian-collectivists” and some refer to “collectivizing the workplace.”   However, whenever left-libertarians refer to “collectivism” or to “collectivize,” they are referring to institutional collectivism.  The word “collectivism” has become a tainted word, akin to Stalinism.  However, there are a number of types of organizational collectives that we’ll discuss below which have nothing to do with philosophical collectivism or state socialism. 

Organizational collectivism determines how the group or social body is internally organized.  There are three main collective organizations: authoritarian collectivism, self-management, and irrational collectivism.  These three organizations can also be said to have a corresponding feature with authoritarianism being centralized, self-management being decentralized, and irrational collectivism being fragmented.  Left-libertarians reject authoritarian collectivism and irrational collectivism and advocate self-management.  In each case, there is a distribution of power and the distribution of that power affects the dynamics and interactions of the individual’s within the organization.  Because each member is affected in some way, we can say that a particular organization have tendencies to produce certain traits within individuals.

Authoritarian collectivism:  The vast majority of organizations both in the US and around the world are based on authoritarian collectivism (sometimes called vertical collectivism).  If we were to use a diagram, they all use hierarchical pyramid where power is concentrated on the top.  There are two main features of the hierarchy.  First, all of these organizations are centralized with very few members at the top while the vast majorities below have little power.  Second, there tends to be a gradation of power.  At the lowest level of the hierarchy, individuals could be considered mere pawns and they tend to have larger numbers.  As we travel up the hierarchy, members gain more power but membership also decreases.  To move up the hierarchy (or ladder), one must conform to the wishes and orders of the people who sit at the summit of the hierarchy.  Let’s use the workplace as an example.  The owner(s) who sit on top of the pyramid are few in number (perhaps even one) and have the most power which is centralized.  Underneath them are top managers, also few in number but have gained a degree of power over the many.  They have gained their power because they conform and carry out the wishes of the people who sit at the summit of the pyramid.  However, one should realize that this power is simply delegated.  While managers do have some autonomy, their organizational function is to provide control because owner(s) can’t be in all places at all times.  In almost all cases, the majority, the pawns, just do as they are told.  Therefore people on the top can then use social coercion to control its members.  When members do not conform, punishments are used to make members comply.  Other organizations that use authoritarian collectivism are the military, police, sports teams, educational system, most non-profits, government, capitalism, organized religion, et cetera.  Simply put, almost all of our existing organizations are based on authoritarian collectivism. 

One byproduct of authoritarian collectivism is that hierarchy creates bureaucracy.   Bureaucracy can be defined as “the existence of some kind of specialized administrative staff.”[v]  As Kathleen P. Iannelo argues, “hierarchy is the key component of bureaucracy, around which channels of authority, systems of communication, and performance guidelines have developed.”[vi]  Not only should we consider politicians as bureaucrats but clerics, managers, teachers, CEOs, et cetera.   

As stated above, members toward the bottom tend to have certain traits while members at the top remain exempt.  For instance, because members lack autonomy and knowledge, they tend to be prone to paternalism, group think, collective guilt, collective identity, alienation, blind trust, nationalism, et cetera.  For instance, the lack of autonomy and knowledge means that one must constantly rely on superiors who don’t lack autonomy and knowledge.  As Max Weber says, “Bureaucratic administration means fundamentally domination through knowledge.”  One of the many reasons for this is that information and commands become directional.  With a hierarchy, the information starts from the top and makes its way down.  An autocrat makes the decisions and they make those decisions in their own self-interest without joint action.  In essence, one has entered into a parent/child relationship.  In order to act, one has to be told what to do and how to do it because they become reliant on superiors.  Not only does information and knowledgeable tend to be directional but so does resources such as wealth, money, power, prestige, and privilege.  While information and knowledge may flow down authoritarian collectivism is a distributional structure where resources, wealth, money, power, prestige, and privilege tend to flow toward the top. 

Rarely do subjects within the organization question these relationships because the organizations themselves have become normalized.  This type of relationship can create a servant identity without critical thought.   In many cases, the superior establish a relationship that becomes internalized by the subject.  By internalization, I mean the subject has come to psychologically integrate particular social norms, beliefs, attitudes, opinions which then cause them to carry out particular behaviors.  The military epitomizes such an organization.  However, workplaces, organized religion, states, patriarchy, sports teams, and education all suffer from these deficiencies.  We can now see a clear flow:

Group –> distribution of power (distributed and centralized at the top) -> Vertical –> Authoritarian –> Bureaucratic –> Servant Identity 

We start with a social body (a group of people) and the type of organization that internally distributes power.  In a vertical collective, power is distributed and centralized toward the top with fewer members having most of the social power.   We have now established an authoritarian collective.   As a byproduct of having a vertical relationship, we create bureaucracy.  Members then tend to internalize certain traits such as paternalism, lack of autonomy, and can become prone to group think, alienation, and blind trust. 

Irrational Collectivism:   An irrational collective is a group of people where members lack sufficient knowledge to make decisions.  Decisions that are made tend to have unwanted consequences that are externalized without the full knowledge of the individual.  We can also say that an irrational collective is fragmented since information tends to be lacking or nonexistent and power tends to move haphazardly.  The classic example of an irrational collective is the movie theater on fire but these cases are rare.  A more popular example of irrational collectivism is pollution.  What happens at the micro level (the individual) might be perfectly rational but at the macro scale could be completely irrational.  For instance, the individual alone has very minimal impact on the environment but collectively they could destroy every species on earth including themselves.  Irrational collectivism is also prevalent in the case of the stock market.  We have thousands of people, none of which have sufficient knowledge who make major decisions.  At the individual level, it might be rational to move money from the stock market but if everyone does it, it leads to collapse.   This also applies to individuals who save.  One person saving is fine and highly rational but when huge numbers of people do the same thing, you could have a lack of demand which can cause businesses to fail throughout the economy.  We can say that such instances produce a paradox because the assumption is that what benefits at small scales (the individual) will be duplicated at larger scales (society) when the opposite might be the case. 

A free market is another irrational collective because individuals participating have very little knowledge what they are doing.  One of the reasons for this is that products tend to function within a web of other companies.  For instance, you could buy a purse not realizing that it came from a pre-industrial country where a 13 year old girl was locked into a sweatshop and can’t escape the work conditions or country because her passport had been taken by the company.  The leather that was used to make the purse comes from poorly treated cattle from Brazil where clear cutting of forest where used for grazing to pay off national debt by corrupt politicians.  The machines that are used to assemble purses where made from a mine in Colombia where workers experience harassment and threats from death squads just for asking for safer conditions, more pay or trying to freely associate.  What the individual consumer might not realize when they buy the purse is that they are contributing, in fact, propelling and solidifying such organizations and institutions.  They lack knowledge or even the ability to gain access to knowledge to know such information and are therefore externalizing those costs onto society.  This barely touches surface because we are talking about entire webs where thousands of interconnected parts are functioning within layers of unaccountable companies that keep information private. 

Decision making is heavily affected by irrational collectivism and people are much more likely to make immoral or anti-social decisions.  “Prof. Dr. Armin Falk from the University of Bonn and Prof. Dr. Nora Szech from the University of Bamberg, both economists, have shown in an experiment that markets erode moral concerns. In comparison to non-market decisions, moral standards are significantly lower if people participate in markets.”[vii]  The new research on the subject is starting to show that individuals “ignore their own moral standards when acting as market participants, searching for the cheapest electronics, fashion or food.”   Members within the market may be against child labor, sweat shops, pollution, animal cruelty but these moral obligations may fall to the side once the effected member becomes a third party.  In other words, out of sight, out of mind.  Interestingly enough, the idiom “out of sight, out of mind” describes irrational collectivism perfectly because “out of sight” implies a lack of knowledge and “out of mind” describes insanity or irrationality. 

Just as members of an authoritarian collective can have certain attributes so can members within an irrational collective.  These organizations tend to incentivize irresponsibility because those who act to their own benefit fail to see the consequences of doing so.  An example is the individual who is morally opposed to pollution but benefits from driving.  This type of organization can also produce alienation because members rarely act in fraternal or communal ways.  While these organizations might be called disorganized, order usually emerges from such chaos.  However, the results are usually unpredictable while there tends to be negative consequences.  Although, it should be mentioned that at times, there can be progress to emerge.  Let’s look again at the flow from the social body to its repercussions.

Group –> distribution of power (lumpy results) –> Irrational –> Emergence

We start with a group of people who are usually acting with little knowledge and in many cases work in their own self-interest.  There is a distribution of power, but that distribution tends to be “lumpy,” scattered, and unpredictable.  We now have an irrational collective which lacks centralization and information can be said to be fragmented.  From the chaos of such an organization, order usually emerges although in many cases with unwanted consequences.  Members of such organization tend to be irresponsible, disorganized, confused, act in their own self-interest, and fail to see their own irrational behavior or the consequences they produce. 

Self-Management:  The last organizational collective I’ll cover is self-management.  In a self-managed organization, all members share the same amount of power while information tends to be freely available to all members.  This means that the organization can be said to be horizontal because it lacks hierarchy.  This type of horizontal organization of the social body encourages freedom, autonomy to work on their own projects, and open sharing of ideas.  In order to distribute power evenly, each member has a say either by consensus decision making or by the vote.  Because members are equals, they tend to have stronger social bonds and fraternity grows throughout the group.  Examples of self-management are many friendships because they don’t have a hierarchy but also lack the disorganization of irrational collectivism.  No one member of a group controls the rest by threat of non-compliance (at least in a healthy relationship) and individuals are encouraged to participate while fulfilling the needs of the group.  Another example of a horizontal organization would be workers’ self-management.  With workers’ self-management, all members of a firm have equal ownership in the company.   One of the main features of self-management is that the entire organization is transparent which is different from authoritarian collectivism where information is usually hidden and irrational collectivism where information is too fragmented to make sense.  Self-management allows individuals to make informed decisions without relying on distorted or insufficient knowledge.  In order to make clear and concise decisions, information needs to be known and transparent.  Those affected should be the ones to decide what to do with that information. 

Unlike authoritarian collectivism and irrational collectivism, self-managed members have more autonomy, have access to information, share power, lack feelings of alienation, make self-directed goals, and use their own critical thought.  At the same time, creativity, individuality, self-actualization, empowerment, fraternity, and well-being flourish in this environment.  With that said, we should also use precaution.  One should not assume that self-managed groups can’t fall into group think or even have some of the negative attributes of irrational and authoritarian collectivism.  Left-libertarians are not utopians.  Self-managed groups are based on the decisions of people which means you can’t predict or even model how they will function.  It is only in the real world can these experiments be tried as they have in the past.  Negative elements will crop up from time to time so it is important to confront these issues.

Group –> distribution of power (power is distributed evenly to all members) -> Horizontal –> Self-management –> Rational Fraternity 

Self-management is the social body where power is evenly divided among all members making the organization horizontal, transparent, and a tendency for stronger bonds between individuals.  These groups tend to be more rational and fraternal while creativity, autonomy, self-directness and well-being are maximized.

Conclusion

There are two other types of collectivism which I’ve chosen not to mention here because they merit a much longer discussion.  The first is methodological collectivism and the second is collectivization of land or resources.  As one can readily see, the word “collective” can have a number of meanings depending on the context.  To conclude, left-libertarians recognize that social groups do gather and people join them freely in order to accomplish their own goals.  Humans are social animals; communal relationships are not only healthy but mandatory for well-being.  Left-libertarians desire to minimize fragmented organizations because they tend to foster alienation, loneliness, helplessness, anti-social behavior, and don’t allow individuals to fulfill their own self-interest.  Left-libertarians also reject philosophical collectivism because no one should submit themselves to the goals of the powerful, privileged, the organization, or hive mind.  Only when individuals have full autonomy do they make groups more vibrant and purposeful. 

Left-libertarianism rejects authoritarian collectivism because it restricts human action, produces paternalism, dumbs people down, creates an unnecessary bureaucratic class which wastes resources, and has negative effects on individuals.  Irrational collectivism is also rejected because information becomes fragmented while individuals make decisions that have unwanted consequences that are not obvious.  Left-libertarians believe that self-management is a better type of organization because it mitigates the negative effects authoritarian collectivism such as alienation and paternalism and allows decisions to be made by those affected.  Self-management also deters the negative aspects of irrational collectivism such as having a lack of knowledge and acting irrationally.  Self-management produces what might be considered positive human qualities such as autonomy, critical thought, creativity, self-realization, and well-being. 


Notes

[i] Putnam, R. D. (2001). Bowling alone: America’s declining social capital. (1st ed., p. 19). New York: Simon and Schuster.

[ii] Ahmed, S. (2004). The cultural politics of emotion. (1st ed. ed., p. 189). New York: Routledge.

[iii] McKay, I. (2008). An anarchist faq. (p. 43). Oakland: AK Press.

[iv] Kropotkin, P. (2002). Anarchist communism: Its basis and principles. In Dover Ed edition (Ed.), Anarchism A Collection of Revolutionary Writings (2 ed., p. 47). Mineola: Dover Publications.

[v] Richard, S. W. (1981). Organizations. (p. 4). Englewood Cliffs: Prentice-Hall.

[vi] Iannello, K. P. (1992). Decision without hierarchy: Feminist interventions in organization theory and practice. (p. 26). New York: Routledge, Champman and Hall.

[vii] von Johannes Seiler, E. (2013). Markets erode moral values . Unpublished raw data, Department of Economics, Retrieved from http://www3.uni-bonn.de/Press-releases/markets-erode-moral-values

Posted in Uncategorized | Leave a comment

The Anatomy of Power and Authority

There are a number of definitions for the word power such as the kinetic power in physics that propels an automobile or lifts a hundred pounds.  When left-libertarians use the word power, they are usually referring to social power.  Social power can be defined as “the exercise of influence: it is the process of affecting policies of others with the help of (actual or threatened) severe deprivations for nonconformity with the policies intended.”[i]  Another way to say this is that social power is the ability to impose penalties for noncompliance.  What is implied in the definition is that power has a social context since it requires more than one individual.  Furthermore, it is clear that “Power relations are asymmetrical in that the power holder exercises greater control over the behavior of the power subject than the reverse…”[ii]  With this context in mind, we can say that power is a form of social control.

Social power plays a central role in understanding left-libertarianism since it’s premised on an anti-authoritarian philosophy.  Authoritarianism is viewed negatively because it is perceived as the primary source that limits human action.  “Power is different from authority for where the latter asserts the right to command and they right to be obeyed, the former is the ability to compel compliance, either through the use or threat of force.  A society without political authority can still have coercive power relationships.”[iii]  If the goal is to understand authority, power must be understood because power and authority are intertwined:  to have authority, one must have power and to have power means to have authority.  However, there are cases where power and authority are justified.  Before returning to this subject, I would like to give an outline of the taxonomy of power.

Taxonomy of Power

The taxonomy I have created is in the context of left-libertarianism which is separate from other taxonomies of power created by those such as Dennis H. Wrong (Power:  Its Forms, Bases, and Uses) and Steven Lukes (Power: A Radical View).  Social Power can be broken up into 4 main components:  Authoritarian Power, Competent Authority, Persuasion, and Manipulation.  I’ll speak mostly of Authoritarian Power but before doing so, I would like to say a quick word on persuasion and competent authority since left-libertarians aren’t concerned with them.  First, competent authority is defined as having a specialized skill or knowledge.  This could include everything from being a fast runner to having technical knowledge of the sciences.  As Bakunin elegantly put it, “Does it follow that I reject all authority? Far from me such a thought. In the matter of boots, I refer to the authority of the bootmaker; concerning houses, canals, or railroads, I consult that of the architect or the engineer…  But I allow neither the bootmaker nor the architect nor the savant to impose his authority upon me. I listen to them freely and with all the respect merited by their intelligence, their character, their knowledge, reserving always my incontestable right of criticism and censure.”[iv]

Persuasion is another form of power where one puts forth an argument, idea, or opinion in order to convince someone of a position.   The individual is then able to freely accept or reject.  Without the power of persuasion, individuals could not disagree.  Unlike Competent Authority and Persuasion, Authoritarian Power is the ability to use leverage for social control.

One of the central features of authoritarian power is the ability of the authoritarian to use coercion.  Coercion is defined as “the practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats or intimidation or some other form of pressure or force.”[v]  Coercion might be said to be the opposite of liberty.  We now have a number of interrelated concepts.  In order to have authority, one must have power but in order to use that power, one requires the use of coercion, and in order to use coercion, one needs leverage.  Social power, leverage, coercion, and authority all emerge in a social context.   Without a social context, these related concepts become meaningless.  Let’s move onto the subject of authoritarian power.

One form of authoritarian power is manipulation which occurs when “the power holder conceals his intent from the power subject – that is, the intended effect he wishes to produce, he is attempting to manipulate the latter.”[vi]  The power holder is able to control future human action by deceit while the subject is not fully informed of needed information.  Advertising, the public relations industry, and think tanks all tend to use forms of manipulation.  Manipulation is different than persuasion because the former uses deceit by omission while the latter does not (or at least the persuader doesn’t believe they are leaving important parts of the argument aside).

Authoritarian power does not use the presentation of ideas to convince others but issues commands that are expected to be followed.   When commands are rejected or ignored, penalties are used to reassert power and impose conformity.   If successful, subjects acquiesce because the “subordinate obeys a superior solely out of fear that he will suffer physical punishment or economic deprivation should he [sic] resist.”[vii]  Authoritarian Power can be broken into two separate categories:  physical force and situational coercion.

Physical Force is most often, but not exclusively, associated with laws of the state.  One of the defining features of the state is that is has monopoly on the use of violence.  “Force involves treating a human subject as if he were no more than a physical object, or at most a biological organism vulnerable to pain and the impairment of its life-processes.  The ultimate form of force is violence: direct assault upon the body of another in order to inflict pain, injury or death.”[viii]  There are also forms of nonviolent physical force such as a “sit-in.”  Individuals use their own physical bodies to prevent others from carrying out action.

People tend to be blinded as to the definition of oppression by focusing on the most brutal modern and historical regimes, violence, and slavery.  Behind the scenes of our modern world, we are caged by invisible oppression fueled by the centripetal force of inequality transacting through effective overlapping forms of control such as information and money.  In effect, the alternatives to physical force that operate behind the scenes are far more effective as people voluntarily participate in their own oppression.

The vast majority of social control happens by the use of situational coercion.  Situational coercion occurs when an individual uses leverage by obtaining power in a situation and uses that leverage to control their subject.  The classic example is a person who has fallen into a deep well on their land.  Another individual comes along and uses the situation as leverage to coerce the individual to sign over all of their land.  The person in the hole is left with no choice but to sign over their land or die of starvation.  Most relationships involve some sort of situational coercion during the course of their lifetime.

Institutionalized situational coercion is when a situation is manufactured in which one person has permanent control over another.   While membership may be voluntary, obedience to authority is mandatory.  Capitalism is a classic example.  State laws (which require force) are used to enforce private property which is then used to create relationships based on subjects and superiors.  There are also cases where laws aren’t used.  For instance, racism, organized religion, and patriarchy are examples of institutionalized situational coercion that come about through culture.

Two important attributes of power are the extensiveness and intensity of power.  The extensiveness of power could be considered be either narrow or broad.  A narrow case would be one power holder controlling one subordinate while a broad case might be manipulative advertising which might control thousands.  The state would also be defined as having broad power because it can control a number of different intuitions from landownership to private companies.  The intensity of power might be classified as either weak or strong.  Laws which are often ignored might be considered a weak form of power while overbearing micromanagement within a company is strong.  Let’s turn to the subject of power and left-libertarianism.

There is a common slogan among left-libertarianism which claims they are, “Against All Authority.”   However, there are numerous cases where authority is justified, a few examples being persuasion and competent authority.  This has led critics of left-libertarianism to claim that the philosophy is internally inconsistent.  This false understanding of left-libertarianism occurs when one replaces a slogan with the philosophy of anti-authoritarianism.  As stated above; authority, power, and coercion emerge in a social context.  Therefore, within any society, there will likely be authority even within a left-libertarian society.  The aim and philosophy of left-libertarianism is twofold:  The first is the prevention of coercive authoritarian relationships, “to seek out and identify structures of authority, hierarchy, and domination in every aspect of life, and to challenge them; unless a justification for them can be given, they are illegitimate, and should be dismantled, to increase the scope of human freedom. That includes political power, ownership and management, relations among men and women, parents and children, our control over the fate of future generations…, and much else.”[ix]  Second, left-libertarians aim for the maximization of individual liberty which “strives for the free unhindered unfolding of all the individual and social forces in life.”[x]  The “maximization process” means to increase the greatest possible amount.

Intrinsically tied to the maximization of liberty are subsidiary qualities which are of primary importance to left-libertarianism.  For instance, to maximize liberty means to facilitate the maximization of equality, creativity, fraternity, mutuality, personal autonomy, and self-realization; or what Bakunin refers to as  “…the liberty which implies the full development of all the material, intellectual, and moral capacities latent in everyone….”[xi]  In effect, the aim of left-libertarianism is not the maximization of vices but the maximization of virtues.  Left-libertarians wish to create intuitions which limit or eliminate authoritarian bonds and replace them by freely associated institutions that allow the free unfolding of positive human attributes.  Left-libertarianism believes that the only way to produce these qualities is to have direct control of the intuitions and associations that affect their lives i.e. to self-manage them.


[i] Lasswell, H., & Kaplan, A. (1950). Power and society. (p. 75). New Haven: Yale University Press.

[ii] Wrong , D. H. (1988). Power, its forms, bases, and uses. (p. 10). Chicago: University of Chicago Press.

[iii] Marshall, P. (2010). Demanding the impossible: A history of anarchism. (p. 45). Oakland: PM Press.

[iv] Bakunin, M. (1970). God and the state. (p. 32). New York: Dover Publications Inc.

[v] Coercion. (n.d.). Retrieved from http://en.wikipedia.org/wiki/Coercion

[vi] Wrong , D. H. (1988). Power, its forms, bases, and uses. (p. 28). Chicago: University of Chicago Press.

[vii] Ibid., p. 36.

[viii] Ibid., p. 24.

[ix] Chomsky, N. (1995, May). Interview by Kevin Doyle []. Noam chomsky on anarchism, marxism & hope for the future., Retrieved from http://flag.blackened.net/revolt/rbr/noamrbr2.html

[x] Rocker, R. (2004). Anarcho-syndicalism, theory and practice. (6th edition ed., p. 16). Edinburgh: AK Press.

[xi] Bakunin, M. (1971). The paris commune and the idea of the state. Retrieved from http://www.marxists.org/reference/archive/bakunin/works/1871/paris-commune.htm

Posted in Uncategorized | 1 Comment

Introductory Notes

This blog is my temporary home for what will be The Institute for Left Libertarian Studies (ILLS).  I’m hoping that ILLS will be a sort of online school for left-libertarians with a major emphasis on teaching introduction material in left-libertarian philosophy, economics, and institutions that will replace both capitalism and the state.  However, I would also like to have more advanced texts which extend the left-libertarian ideas into a new century.  I am particularly interested in developing new concepts (not blueprints) of the post capitalist world.  At the moment, I’m looking for contributing writers that are knowledgeable in political philosophy, economics, and the institutions that will replace capitalism and the state.  I also need volunteers to read and record older texts, anything from a small 4 page article to larger works such as book. While I still encourage the importance of books about the subject, ILLS will be heavily media driven to address the fast paced lifestyle of the world we are in.   The format needs to accommodate that many people have busy schedules full of obligations to family, work, and friends.

I would like to have a quick word on the language I use on this blog.  Most people who are interested in politics or current events use the language of political science.  That’s fine.  However, on this blog I will be using the language of political philosophy which in many cases has the opposite meaning from most political uses.  For most people, communism means something along the lines of the former USSR or North Korea.  Socialism means big state while capitalism means corporatism.  In political philosophy, however, language is extremely precise and cannot be extended this way.  Rather than studying current events, political philosophy questions the underlying structures and institutions while asking deeper questions on the subject of property rights, theories of justice, and liberty.  In current political philosophical discourse, we can separate political systems into four main groups: state capitalism, state socialism, classical liberalism, and libertarian socialism.

State Capitalism: A system that uses both the state and capitalism, examples of which would include everything from the Democrats and Republicans to most European countries.

State Socialism:  The state owns the majority of the means of productions such as land, factories, tools, and workplaces.  Examples include Cuba, North Korea, and the former USSR.

Classical Liberalism:  A belief in little or no state.  If the state does exist, its primary job is to protect private property and provide a small military.  This would include schools of thought such as right-“libertarianism,” and “anarcho-capitalism,” along with those of a number of older philosophers such as John Locke and Adam Smith.

Libertarian Socialism:  A stateless society where the means of production are either commonly owned or owned by the workers.  An example is the anarchist stronghold in Spain during the Spanish Civil War.

Each of these groups usually has a number of schools of thought within them.  A left-libertarian is synonymous with libertarian socialism and includes schools of thought such as individualist anarchism, mutualism, libertarian-collectivism, libertarian Marxism, etc.  However, in this blog, I use the term left-libertarianism to be closer to what is called social anarchism.

We can further define a couple of terms which I’ll use.

Communism: Communism is considered a stateless, classless, moneyless society.  It has nothing to do with North Korea, Cuba, and the former USSR which are more accurately classed as totalitarian state socialist societies.

Capitalism:  Private ownership of the means of production and the use of wage labor.

Free Market: Voluntary trade between individuals within a particular framework of property ownership. 

Anarchism:  Anarchism is an anti-authoritarian philosophy which aims to replace vertical social bonds with horizontal bonds in order to maximize individual autonomy.

In the field of political science or current events, most of the underlying institutions, property norms, and legal systems remain unquestioned.  When they are questioned, they remain so within a very limited framework.  For instance, one might question a particular law but individuals rarely question the entire legal system, how and for whom it operates, nor do they offer totally new forms of rehabilitation.  Political philosophy aims to question the underlying systems and structures that govern our lives.  Currently, most individuals falsely believe that politics falls within a very narrow framework where we have a straight line where the USSR sits on the far left and Fascism falls on the far right.  The US might be considered to be in the middle.  The reality is: there is no such line and none has ever existed.  Instead, we can have systems which apparently contradict each other according to linear forms of political thought.  For instance, you can have a free market, anti-capitalist, anti-state system of socialism.  This is what individualist anarchism claims to be.  They desire for the elimination of the state and capitalism but believe that workers should own the means of production.

Left-libertarianism

I’ve decided to consistently refer to myself as a left-libertarian for a number of reasons.  What I’ll refer to as left-libertarianism is synonymous with social anarchism  Schools of thought within this group include Proudonian Mutualism, anarcho-syndicalism, libertarian-collectivism, and libertarian communism.  The main difference between these is how they are organized in a post-capitalist, post-statist world.  In my own opinion, I think real world experience will bear out aspects of each.  I also believe that each school of thought has much to contribute to modern libertarian thought. In other words, I don’t fully subscribe to one school, but have a number of sympathies and criticism of each.

Secondly, I use the term left-libertarianism as a signal that a new direction in the course of anarchism is deeply needed.  While I think history and older writings are important, I believe it is time to move into new modes of thinking about the subject.  The world has drastically changed in the past 150 years and much research in economics, sociology, psychology, philosophy, and anthropology can aid left-libertarianism in a major way.  To be blunt, I think left-libertarianism needs a major facelift.  In my opinion, this facelift needs to take into account the world we’ve inherited which means directing our message toward the masses.  I think it is time to drop some of the rhetoric and words such as anarchism, socialism, and claiming to be “against private property.”  While I consider myself an anarchist and a socialist and I’m certainly against private property, people new to the subject will make a number of false assumption such as believing that left-libertarians are pro-state, believe in chaos, or are against personal property such as an individual’s home and car.  Language plays an important role is shaping thought and once certain words are introduced, individuals will conceptualize left-libertarianism within that framework.

Over the years, left-libertarianism has fallen into an internal trap; a world which alienates most outsiders while promoting its own internal code or even uniform.  If the world is really as dire as left-libertarians claim, we must end factionalism, exclusivity, and elitism.  We must reach out to our enemies and others with similar value systems.  This requires that left-libertarians remain as pluralistic as possible which means being open to a diversity of thoughts.  This could include everything from being open to new schools of economic thought to trying to find common ground between Continental and Analytic philosophy.

Lastly, I’ve chosen to use the term left-libertarianism because I think left-libertarianism speaks to individuals on the political Right and Left especially because left-libertarian history synthesizes individualism with socialism.  While libertarianism might be considered a right-wing philosophy in the US, it was the left that originally coined and developed the thought.  Therefore, I think we have a platform to appeal to a large number of people especially those disenfranchised by the state of current events.  People are looking for alternatives and I think left-libertarianism has something important to offer.

It is also important to realize that the masses feel comfortable with the status quo.  Individuals work hard within the framework they are presented (such as the state and capitalism) and feel like they should be rewarded when they work hard to accomplish goals.  When the foundations of the status quo are questioned, individuals who obey the rules tend to get upset, which is completely justifiable.  A person could spend an entire life working, going to school, and trying to achieve what is believed to be right.   They follow the rules of the game and like most games, they are rewarded.  Then suddenly, the left-libertarian comes along and says all the rules are wrong.  In fact, they aren’t just wrong, they are unjust.  It is no wonder so many people react to left-libertarianism the way they do.  However, we still need to find positive methods and messages that encourage ourselves to question the very foundations of our world and ensure that we are where we want to collectively be as a society.

To me, anarchism isn’t just a negative philosophy, one that critiques current institutions.  The “I’m against ___.”  Rather, it’s a philosophy that has an analysis of the present with a plan for new institutions and infrastructure.  In short, we believe another, better world is possible.

Posted in Uncategorized | Leave a comment