Anna Morgenstern | February 3rd, 2014 Recently, a rebuttal of my previous article “Anarcho-Capitalism is Impossible” was brought to my attention. The author, Christopher Cantwell, made some points that are worth addressing and my own thoughts on the matter have shifted somewhat over time. Therefore, I think it would be worth revisiting the topic with fresh eyes.

In his introductory paragraphs, he defines “the left” as being basically anti-propertarian, and socialism as the state ownership of property. Anti-propertarian in this case would mean against anyone but the state owning property. Under these definitions, there’s no such thing for sure as left-libertarianism or anarcho-socialism. Socialism is a pretty nebulous word, in fact, so is the concept of being “left” as opposed to “right” wing. Capitalism is equally nebulous, and yet has a concrete historical instance. One of the concepts I was trying to lay out in my original essay was that if one judged “capitalism” by its concrete history, and not its various theoretical definitions, then anarcho-capitalists were certainly anarchists, but certainly not “capitalists” because the changes they would make in society would make the historical appearance of “capitalism” impossible. This is in opposition to what anarcho-socialists usually claim which is that ancaps are capitalists, but not anarchists. This confusion arises I believe because of conflation problems (commonly known as the “xaxlebax” problem, after a thought exercise in an essay by Roderick Long: “Left and Right, 40 Years Later”). Basically, what is being conflated in people’s minds is the free market and the historical, actual economy we think of as “capitalism”. This conflation, I believe, is a mistake.

Cantwell makes two major points against my original essay that I think are fair criticisms. The first is that I wrote that “Under anarchism, mass accumulation and concentration of capital is impossible.” Cantwell argues that accumulation of capital will go on even more so than under our current system. I happen to currently agree, but in a way that will make heavy concentrations of capital unlikely or in fact impossible. I did not distinguish between capital accumulation and capital concentration properly, and it’s fair to attack my statement on the accumulation side. My apologies, I was wrong to conflate the two concepts as I did. Secondly, and sort of relatedly, in my essay I claimed that the protection of large concentrations of capital would (at some level) become prohibitively expensive, to the point where it became basically a losing proposition. He knocks that point down fairly well I think. I do think that “raids” will make widespread absentee property ownership extremely difficult to defend without great expense, but not necessarily impossible. And over time, if I am right about the overall wealth level in society rising, then this aspect of things will die out anyway.

This brings me to the “revisitation” part of my essay. The main distinguishing “negative” features of “capitalism” as seen by the left are related to the tyranny of the boss over the worker and the tyranny of commerce over impoverished consumers. Both of these root problems are actually related to a scarcity of capital in relation to either labor, or in relation to effective demand. If you go into a wealthy community, the problems of “alienation” and reduction of relations to the “cash nexus” don’t exist between wealthy people. Or at least not so you’d notice it. I happen to have good reason to believe that this scarcity of capital is created by the state. The current owners of capital don’t want capital to expand willy nilly, because that dilutes the relative power and value of the capital they possess. If you had a means of making, let’s say smartphones, at a very low marginal cost, and for an average-good quality, you would not want other people to also have this means, in fact the less people that had the means to produce those phones the better off you would be. But wouldn’t the owners of capital want everyone else’s goods to be non-scarce? Well, sometimes, but not always, and plus it’s just not that important to them. When you reach a certain level of wealth, it’s not about affording consumer goods anymore. Everything is relatively inexpensive for you, so what’s more important then having cheaper yachts is making sure that you stay on top, and if that means you have to pay 30% more for your yacht, that’s fine. In addition note that it’s practically a cliche that at that level of wealth, good-exclusivity (“This is a genuine Able-Dable bag made by hand by Mr. Able-Dable himself”) is more important than expense. These factors are related. Good-exclusivity is a sign that you are at a level of wealth where you prefer absolute scarcity of capital to absolute abundance, because your relative level of abundance is so high. You’re trading a slight percentage increase in consumer spending to get power over the market. It is exactly this power over the market which becomes impossible under anarchism.

The means by which the state acts to prevent the overall stock of capital from growing too quickly and/or from spreading too widely are too numerous to mention in one short essay. But some of the main ones are War, Chartered Banking and Licensing. War is pretty obviously not always just a grab for land and people, but a destruction of resources. War and chartered banking go hand in hand to drain the overall level of capital through deficit spending. Almost no nation ever pays for a war through direct taxation. On that note let’s look at the so-called “progressive income tax”. It’s really not that progressive when you take everything into account. It may be possible that for the ultra-wealthy, the gains they make from preventing competition and thus driving wages down is more than they lose from taxation. Licensing and permits are an obvious way that the state keeps too many “newcomers” from getting into the game, and furthermore makes it difficult for the smaller fish to get too big.

Under an anarchist economy, the overall level of capital in the society will grow enormously, especially at first. And most of these gains (in the aggregate) will not go toward those who already possess large amounts of capital, because the state has not been restricting them as much to begin with. Wage gains furthermore will tend to accelerate fastest for those who are paid less. A person with very specialized, advanced skills is already getting paid quite a bit right now. The companies who are let us say, not-under-capitalized right now are already making the highest use of these sorts of people that they can. The new jobs created by the massive explosion of capital will not be, by and large, competing for these sort of people as much. Their wages will rise, but not as quickly as for someone who is a bit less skilled and/or specialized. Furthermore, there will be an enormous explosion of production which will drive down prices, effectively multiplying everyone’s wealth level. At some point, the alienation of work and tyranny of the boss disappears. This is because when someone is no longer materially insecure, they cannot be threatened so easily.

If the workers at your shop each have 2 years worth of disposable income in the bank, they aren’t going to respond to the stick anymore. This will create a new equilibrium of course, as productivity slows, and wages rise, profit slows and the rate of acceleration of capital growth slows. But overall one is left with an economy where everything must be run with carrots. Furthermore the opportunity cost for anyone to pursue their own peculiar interests will become no longer prohibitive. Some of this will simply create a happy playful social atmosphere, and some of it will lead to new avenues of production for those who find that their interests are shared by enough people, and can find a way to make it profitable. Either way the salient features of what the social critic imagines when they see the word “capitalism” will no longer apply to such a society. Gone will be the rush hour, the asshole boss, the fear of losing your entire life because you weren’t servile enough, the daily “grind”, crushing bills to pay, overtime, the fear of your neighbors because they are even more desperate than you are.

Cantwell’s counter-essay is interesting because it touches on or even agrees with some of this analysis but then sort of drops away and turns on it at the same time. What I find among some of the more “right” or “plumb-line” libertarians, if they’re at least somewhat intelligent, is that on one hand, they seem to understand or agree that the state has impoverished the poor and middle class beyond all reckoning, but on the other hand they don’t see that this is the only thing keeping the current relation of employees to employers the way it is. They see how the financial system and regulatory sieve favor some over others, but they don’t see that this is exactly the point. To some extent it’s because they’ve made the same conflation of the free market and our “capitalist” society that the mainstream left and right have, and to some extent I think it’s because they take the liberal/progressive wing at their own words. They really do think that the state wants to level everyone out and protect the poor and downtrodden, and that somehow our current levels of poverty and inequality are despite the state’s best, albeit stupid, efforts.

To the extent that the state gives anything to the poor it is only because they don’t want mass starvation and revolution (now that they’ve broken the legs, they feel like it would be wise to offer crutches). And the wealthy in our current system are not rough and ready individualists who are being held back by the state. (All of those guys are bitter and have no money because the state already crushed them. I kid, I kid.) I believe it is this misunderstanding of the actual situation that leads anarcho-”capitalists” to call themselves that, and to sympathize on occasion with the very forces that are feeding and encouraging the state they hate so much.