Political vs. economic capitalism

"political capitalism (which we pro-capitalists sometimes call mercantilism, corporatism, state capitalism, crony capitalism, or even fascism), is something we and the anti-capitalists can agree on: it is the exploitation of the productive class by a parasitic class. We might even surprise them with our sample list of parasites: defense contractors, the banking cartel, the steel industry, big agribusiness, Halliburton ... There is a persuasive power in joining the leftists' rants against privilege once you've insisted that the term they mean is political capitalism. Similarly, it is easier to convince them to open their minds to the potential virtues of economic capitalism than it is to promote only 'capitalism' without the distinguishing modifiers."

[From Straw Men and Ham Sandwiches by B. K. Marcus at LRC]

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the problem i run to when

the problem i run to when explain this to the left (and right) is that they simply respond with the fact that, at least recently, capitalism in any major form has always existed alongside the state, and that it will continue to be inseparable from it (due to history, similar hierarchical structures, etc.).

so, how do you respond to this concerning their seperation?

I've spent quite a lot of

I've spent quite a lot of time trying to hammer this notion into the heads of leftists, including Chomsky himself (!), with limited success.

Noam admitted that the current system he dislikes isn't remotely like free-market capitalism. However, when I ask, "Why don't we try (economic) capitalism, then?" he started gibbering.

I don't see how their

I don't see how their argument counters the idea. There are many different political systems - types of states and rules they can have. This idea simply suggests that we distinguish between rules which encourage one type of venture (making money by producing a useful product) from another (making money by getting favorable laws passed). The latter is not what we libertarians are defending as capitalism. It may be true that some laws encourage both - in which case, our feelings on them would be mixed.

The argument that capitalism can exist without the state (market anarchy) is a much more complicated and dificult one. Marcus' approach, which I favor, is simply a small initial step. It does not require acceptance of capitalism/state separation. Simply a recognition that there are two very different things which big organizations are doing (producing and stealing), and we shouldn't mix them up.

The lefties are upset that

The lefties are upset that the big corporations have political power because they want to political power to murder and enslave. Obnoxious as they are, steel tariffs and agricultural subsidies are gnat bites compared to the mass murder the lefties have planned.

- Josh

TJ- Via what avenue did you

TJ-
Via what avenue did you happen to interface with chomsky?

Patri-
Good post, I think we have a lot more to agree about than we think sometimes. The answer that chomsky gives, and that I agree with is that capitalism is left with nothing to recommend it. Seperated from state power it's as theoretical as anarcho-syndicalism- probably even moreso. Why advocate it?

Josh-
"have planned"? Eek.

-Matt

Matt, I'm not sure how you

Matt,

I'm not sure how you or Chomsky reach that conclusion. Incredibly expansive division of labor? Unmatched productivity? Wealth creation? The superiority of exit over voice? The structural reasons why competition and consumer preferences work better at challenging authority than popular voting? The information signals of prices as determined by supply and demand?

I just don't see how you can dismiss these with the claim that capitalism has nothing to recommend it.

And if you think that anarcho-capitalism is as theoretical as anarcho-syndicalism (I don't think it is, and even if it is, economic theory has a lot to say about why ancap would work and ansoc would not), why advocate an-syndicalism either?

Yes, matt, "have planned."

Yes, matt, "have planned." I can't think of any other way to characterise it when socialists and communists deny or ignore the horrible crimes of communist states.

- Josh

Why advocate capitalism?

Why advocate capitalism? Because it may be theoretical, but I'm all for a theoretical world where other people don't control my life, force their beliefs on me, and violate my rights at will because they think they know what's best for me. I'm always a little wary when people talk about how anarcho-capitalism "wouldn't work". What is the exact definition of work? I'm perfectly serious- my university professors think socialism in Cuba works even though it's a hellhole. I would like to have someone explain what they mean when they say it wouldn't work.

"The argument that

"The argument that capitalism can exist without the state (market anarchy) is a much more complicated and dificult one."

I don't see what's complicated or difficult about it. Nations exist in a relative state of anarchy with respect to one another, and markets exist in that anarchy. Clearly markets function in anarchy. Q.E.D.

Not an entirely convincing

Not an entirely convincing argument, John, for markets also exist in a world of rampant statism, and there are no currently existing examples of geographical locations without government but with functioning, well-developed markets.

"Not an entirely convincing

"Not an entirely convincing argument, John, for markets also exist in a world of rampant statism,

Who said they didn't? The point is that that markets obviously function when no state has authority over them.

"and there are no currently existing examples of geographical locations without government but with functioning, well-developed markets."

The U.S. and Canada exist in a state of anarchy relative to one another, yet Americans and Canadians trade all the time.

For the purposes of considering international markets national governments are simply agencies, their internal workings are irrelevant.

Micha Iâ??m not sure how

Micha

Iâ??m not sure how you or Chomsky reach that conclusion. Incredibly expansive division of labor? Unmatched productivity? Wealth creation? The superiority of exit over voice? The structural reasons why competition and consumer preferences work better at challenging authority than popular voting? The information signals of prices as determined by supply and demand?
spew some verbiage why don't you? These would require a case-by-case rebuttal not worth giving since you apparently didn't consider the question and aren't even trying to make the case. Take "unmatched productivity" for example- protectionism (according to eminent economic historian Paul Bairoch and others, and seems pretty well borne out by a cursory examination of history) and state socialized risk does seem to have created unmatched productivity. Where is the reccomendation of capitalism in this?

And if you think that anarcho-capitalism is as theoretical as anarcho-syndicalism (I donâ??t think it is, and even if it is, economic theory has a lot to say about why ancap would work and ansoc would not), why advocate an-syndicalism either?
I'm not saying you can't advocate it, but I wouldn't advocate ansoc by touting the (at the time unmatched) success of Stalin's 5 year plans now would I? I'm saying they are on approx. equal theoretical footing and should be argued as such. USing the limited historical examples, too.

Josh-
Yes, matt, â??have planned.â?? I canâ??t think of any other way to characterise it when socialists and communists deny or ignore the horrible crimes of communist states.
Slow down, broseph- you think:
a. all "lefties" are socialists and communists?
b. all "lefties" deny stalinist atrocities and the like?
c. all "lefties" plan new atrocities because they disagree about the facts of the old ones?

By theway, I am probably not of those who disagrees with your interpretation of stalinist atrocities. Take a look at capitalist atrocities in the 90's in Russia since they privatised. It's been estimated that 10 million extra deaths were caused during that 10 year period- that'd make even Stalin jealous.

Lisa
Why advocate capitalism? Because it may be theoretical, but Iâ??m all for a theoretical world where other people donâ??t control my life, force their beliefs on me, and violate my rights at will because they think they know whatâ??s best for me. Iâ??m always a little wary when people talk about how anarcho-capitalism â??wouldnâ??t work". What is the exact definition of work? Iâ??m perfectly serious- my university professors think socialism in Cuba works even though itâ??s a hellhole. I would like to have someone explain what they mean when they say it wouldnâ??t work.
Yeah, I'm sure it would work, I just etimate that it'd create one of the worst forms of totalitariansim imaginable. Large private enterprise, seeking to preserve itself against the onslaught of competition would either create quasi governmental trade organizations to regulate trade in their favor or simply use their size to leverage populations into granting them extra rights. Look at what happens all the time- citizens of cities like Peoria agree to pay 25%-50% of a large corporation's capital costs in exchange for that corp. moving there. They do so because the size of the operation benefits them and the corp. is large enought to be choosy, etc. Edmond Cahn correctly described large corporations as "petty sovereigns" which function like miniature totalitarian govt's. Only they're not always so mini...

I donâ??t see whatâ??s complicated or difficult about it. Nations exist in a relative state of anarchy with respect to one another, and markets exist in that anarchy. Clearly markets function in anarchy. Q.E.D.
this isn't convincing at all, actually. These markets are so heavily distorted by state intervention of all kinds that they don't even approximate "freedom." Perhaps an example would help me here.

The U.S. and Canada exist in a state of anarchy relative to one another, yet Americans and Canadians trade all the time.
not that this has any bearing on the issue, but I don't think this is true. NAFTA is hardly a free trade agreement at all; it's rather an investor rights agreement. These agreements are a lot like the quasi-governmental regulations I was writing about to Lisa.

Matt, Protectionism leads to

Matt,

Protectionism leads to unmatched productivity? You believe this? I've never heard of Paul Bairoch, but the mainstream view in economics is that protectionism represents a dead-weight loss, not a gain. I think its also pretty clear that state socialized risk does not lead to economic growth. Even supporters of European social democracy admit that; they just maintain that a more equal distribution is better than higher growth and productivity.

I considered the question. I don't understand how you or Chomsky could say that capitalism has nothing to recommend it. I gave you a number of examples that would recommend it. You may disagree with those examples, but you are at odds with the vast majority of economists.