In a futile and stupid back & forth between a couple of semi-informed Youtubers I offered to have a verbal discussion with the one advocating Anarcho-Whateverism. Hereafter things got cray-cray as people threw some bait at me to get me irate and finally challenged me wit a couple of posts worthy of actual responses.
The full text of the comment stream from my 'willingness to debate' post onwards is presented here, and followed by a long text responding to the last comment in the stream by Finnish Anarchist.
Text highlighted in yellow like this is annotations by me.
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Matthew John Hayden
Oct 2, 2015
+BadMouseProductions what topics would the debate cover?
Is it supposed to be about the ballsy memes? Remember any such meme is subject to the problem of summarising information about an ideology.
If it's not, and rather you just wanna have an AnCap vs. AnCom tickling contest then I'm up for a chat.
I happen to be informed and intelligent enough to handle a fairly simple discussion of epistemology, ontology, economics, ethics, jurisprudence and history if you're in the mood for a West Country shindig.
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eyeseethroughyou
Nov 4, 2015
+Matthew John Hayden "I happen to be informed and intelligent enough to handle a fairdiscussion"
Yet you believe that private property can exist without a state/government? I find that hard to believe.
"and history"
Then you would know that historically speaking, modern concepts of private property and capitalism arose along side the state and are, in fact, functions of the state. Ayncraps like you hold yourselves to a high standard, despite the fact that your entire ideology is intellectually, historically and philosophically bunk.
This paragraph will come back to haunt this person.
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Matthew John Hayden
Nov 7, 2015
+eyeseethroughyou
Backup your claims with reason and evidence and I might consider spending time and effort responding.
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Kenny Kendall
Nov 7, 2015+
+Matthew John Hayden
You don't need "evidence" to say that private property is enforced by the state, because it is.
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Matthew John Hayden
Nov 8, 2015
+Kenny Kendall
My claim is that it can exist sans the state.
And my interlocutor's case is that it cannot.
In other words either you're not paying attention to what either of us are saying or you're being deliberately dishonest.
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eyeseethroughyou
Nov 8, 2015
+Matthew John Hayden You can claim that unicorns live in your basement, but so what? I'd equally believe that unicorns live in your basement as I would that the state and private property could exist independently. In any case, it's well understood that capitalism arose along side the state, following the enclosure acts of the 15th century and the emergence of agrarian capitalism. If ayncraps were honest and actually studied history, I'd take them more serious.
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Kenny Kendall
Nov 8, 2015
+Matthew John Hayden
"My claim is that it can exist sans the state.
And my interlocutor's case is that it cannot."
Ok, so you make a positive claim, he rejects your claim and you think it's his responsibility to produce evidence for countering your claim. You fail to realize that if you're the one to make a positive claim; you have to be the one to prove it or you might as well assume the claim isn't true.
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Matthew John Hayden
Nov 9, 2015
+eyeseethroughyou
You started by talking about private property. My responses are in reference to that.
Now you talk of capitalism as though I'm supposed to see these two concepts as one and the same...
I'm confused.
Maybe you think I'm one of the nutty AnCaps who think capitalism is some kind of moral system or a panacea for all of life's problems...
Sorry to disappoint, but I'm just a boring old anti-state liberal.
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Matthew John Hayden
Nov 9, 2015
+Kenny Kendall
Saying private property can exist sans the state is only a positive claim because I used the word 'can' and says nothing about whether some additional effort is required to perform the reality of private property versus its absence.
So you conflated real-life action with language.
Here's what I mean;
"I believe public/common property can exist without the state."
My statement about private property applies equally to its opposite, this common thing you're all bully about.
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eyeseethroughyou
12:18 AM
+Matthew John Hayden
"'I'm just a boring old anti-state liberal"
Ok, but your position that you can have a free market capitalist system based on private property without a state is still irrational. You're an ayncrap that just doesn't put on airs of moral integrity.
"Saying private property can exist sans the state is only a positive claim because I used the word 'can' and says nothing about whether some additional effort is required to perform the reality of private property versus its absence"
This is just a really weasally way of admitting that you can't demonstrate, either through argument or historical/empirical evidence, that private property can exist sans the state. If you can't demonstrate or make a coherent, logically sound argument for stateless capitalism, than why should anyone accept your position?
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Finnish Anarchist
11:58 AM
+Matthew John Hayden You said that you understand economics. Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?
According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this). The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit.
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Matthew John Hayden
3:30 PM
To +eyeseethroughyou, this is sort of in response to +Kenny Kendall as well, so I apologise if bits of this seem irrelevant to your comment.
If you'd wanted historical examples you could have just asked upfront;
Icelandic Althingi Commonwealth (200 years)
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html
Republic of Cospaia (300 years - abolished by Napoleon Bonaparte)
https://en.wikipedia.org/wiki/Republic_of_Cospaia
https://dailyanarchist.com/2015/03/11/the-anarchist-republic-of-cospaia/
Tuath system in Ireland (2,000 years)
http://foranemergentgovernance.tumblr.com/post/1517339178/ireland
https://en.wikipedia.org/wiki/T%C3%BAath
Harrappa / Indus Valley Civ (2,300 years)
https://en.wikipedia.org/wiki/Indus_Valley_Civilization
https://hayden.liberty.me/scarcity/
http://www.independent.org/pdf/tir/tir_10_3_04_thompson.pdf
There's four off the top of my head. David Friedman & Bruce Benson are the guys who are probably best positioned to talk about non-state / private law.
I keep talking about private law because by definition a private law society is always characterised by the ownership of and trade in title to private property in land and everything else.
Sometimes this includes human beings, usually it does not, but you do not want to start using such cases as arguments against private property itself considering what modernity has given us in terms of technology, comfort, and knowledge of human nature.
To date there is no evidence of slavery in the Harrappan / Indus Valley Civilisation, and only of indentured servitude for criminals in Ireland, Scandinavia and ancient Germania, where people practiced a polycentric private law system based around weregilds, or "man prices".
https://en.m.wikipedia.org/wiki/Weregild
Just a quick piece here for some perspective on why private property is not some magical state invention;
https://properal.liberty.me/property-is-not-just-a-social-construct/
A quick explanation for how private property is an obvious method of social organisation because it minimises conflict;
https://properal.liberty.me/the-property-strategy/
This article, and the paper it's based on, posit individual property supplanting the common kind some time in the Holocene Period in conjunction with the rise of agriculture - this point is important later;
https://properal.liberty.me/emergence-of-individual-property-rights-in-humans/
On the other side, the Left case is probably summed up best in David Graeber's work Fragments of an Anarchist Anthropology;
http://www.eleuthera.it/files/materiali/David_Graeber_Fragments_%20Anarchist_Anthropology.pdf
Yes, I read Classical Anarchist intellectual literature, or at least I do in areas like sociology and anthropology - I only read the econ stuff if I really have to. Graeber is my favourite author in this space.
In this work he sets out to find examples of common property societies lasting from before Antiquity to today, and boy howdy does he find some;
https://en.m.wikipedia.org/wiki/Piaroa_people
https://en.m.wikipedia.org/wiki/Tiv_people
https://en.m.wikipedia.org/wiki/Merina_people
Note none of these groups practice the kind of advanced agriculture that has characterised every civilisation in history, and which in fact is the explanation for the emergence of every civilisation in history.
Apparently a common property society can't even get from settled subsistence to farming; whoops. That means common property societies have no way to advance themselves from their present station. This would consign almost the entire human race to death by starvation. Wow, don't I feel immoral for advocating private property and the freedom to enter wage labour.
Maybe you backed the wrong horse, my Commie friend.
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CONCERNING WEASALS
Since I've satiated - for now - your hunger for knowledge, it's time to talk about argumentation. You deleted an important word - 'can' - when you quoted me, and you forgot, somehow, the second and operative part of my argument, presumably because you have no response to it. Fair enough.
But do try to be a little more honest in future, because it makes life so much easier for everyone and spares me having to write extended comments like this one.
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A NOTE ABOUT HISTORY
[I think this bit is more for Kenny Kendall than eyeseethroughyou, but there is some inevitable conflation]
When a 19th Century Anarchist ( you call me an AynCrap, I call you obsolete ) tells me I know nothing of history while offering barely a ghost of a lesson themselves I am at a loss as to what the complaint is supposed to be.
Nobody would disagree with you about the increase in prevalence of capitalism from the 16th to 20th Centuries, or that the beginning of that increase coincides with the English / Scottish Enclosure Acts.
Concerning the prior claim, we have the GDP hockey stick graph, that delightful rejoinder to those who would cry foul at the mode of production called capitalism;
http://finance.townhall.com/columnists/danieljmitchell/2014/06/28/the-amazing-hockey-stick-of-economic-progress-n1856781
http://rdmckinney.blogspot.co.uk/2014/02/the-great-stagnation-explained.html
Course it was also irrelevant to the discussion, as private property has been the norm of every single civilisation to exist with the exceptions of the later Byzantine Empire (the Theme system of Absolute Feudalism, if you will) and the wave of state socialist adventurers in the 20th Century - a beat only Cuba, Laos and North Korea seem to have kept to.
Presumably you will quote the above and say it's irrelevant because you're an anarchist, but I'm not using state socialism to attack you, and nor would I.
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ECON VOX
I have answered the case concerning stateless private property and, in the process, stateless social / public / common property resoundingly in favour of the private kind, but there is still something bugging me.
I'm not sure why you asked about "stateless capitalism" as capitalism is just a mode of production and therefore agnostic to questions of the presence or absence of a state.
Whether entrepreneurs will ask financiers for money to fund previously untried resource allocation plans for the production of existing or original goods and services ( motivated by profit and loss ) relies only on the existence of private property and money.
It takes a lot less violence for several property owners to just hold and trade what they have than to go and expropriate what others have. This should be obvious. Congrats for hiding from this basic fact so well.
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DANCES WITH PRAXIS
See how much trouble I've gone to now? This was why I was fobbing you and Kenny off previously. I wanted to wait until somebody else made some compelling argument before saying what I've said above.
Don't worry, I don't expect you to respond in kind - in fact I expect you to pick and choose bits of this to attack, like my choice of link to the Indus Valley Civ. Since I wrote it I'm evil, or somesuch, right?
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Letter to a Finnish Anarchist
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EXECUTIVE SUMMARY
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"You said that you understand economics."
• Well, I hope so. More than that clown Molyneux.
"Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?"
• The only attested cartels in history and today are either state-owned, state-supervised, serving the state as their only customer, or illegal. Examples include police and security, finance, education, healthcare and pharmaceuticals. The illegal category is best exemplified in the UK by the firearms and narcotics industries.
"According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this)."
• Correct. And that's pretty much all I have to say on this point.
"The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit."
• This is a general economics question that speaks to the operation of humans interacting with each other in a marketplace.
• The answer is obviously 'no' because there's no evidence to date of free market cartels and because when humans organise into teams of whatever nature (corporate, co-operative, whatever) they compete horizontally against other teams trying to offer the same goods and/or services to the same demographic of potential customers.
• What tactics might cartels or monopolists employ, predatory pricing? No cigar. It's actually a joke in the econ profession - or an embarrassment in George Stigler's words - that anyone even still believes in free market price-fixing due to the complete lack of evidence.
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DEFINITIONS
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DRO, arbitration agency, & private court are synonymous. These agencies can be organised as for-profit or non-profit corporations, or as for-profit or non-profit co-ops (community, worker, customer, whatevs).
Corporation is taken to mean body of persons organised in such a way that its owners and workers are functionally distinct - in practice some people might own shares in a corporation that also employs them, but the positions are distinct nonetheless. People gain and lose ownership by buying or selling shares respectively.
Co-operative is taken to mean a team in which owners acquire and lose ownership shares on the basis of their interactions with it, whether as workers, customers, or just local neighbourhood dwellers. Any one co-op could be organised on any of these ownership principles or any combination of them.
Cartel means an alliance of people in an industry with the purpose of raising its price above market level, making this near enough a synonym of oligopoly.
Price is the ratio at which two goods are traded; three elephants for one cruise missile, etc.
Market or marketplace means the setting for trade.
Trade is any practical exchange of goods or services in which both parties give something up to each other, thus closing the debt loop to each other, which is why in business the term 'to close' is so often used to refer to the completion of an exchange. Any economic obligation between the parties re the objects traded begins and ends with that specific trade, so neither is in debt to the other.
Debt loop is taken to mean the opening between Person A giving Person B something and Person B giving Person A something in return. For example, in a common property gift economy the debt loop is infinite, & can never be escaped.
Industry is defined here as a set of social and productive activities in production of a specific good or service, or a specific type of good or service, say footwear, insurance, or dispute resolution.
Liberalism is taken to mean the ideology of individual liberty, that political force - if it exists at all - should be employed in the protection of people's liberty.
Socialism is taken to have two meanings;
a. The materialist political philosophy placing normative priority upon equality of circumstance and -somehow- luck.
b. The economic practice of social ownership of the means of production, distribution and exchange, which in a statist/archist context means state ownership and control, and in an anti-statist/anarchist context means community or union ownership. A whole lotta community co-ops or communes should result.
Anarchism is defined as the ideological preference for anarchy over archy. This one really should be obvious, but even in 2015 people are still trying to claim that a word from a root meaning 'no archon' in ancient Athens somehow HAS to mean anarcho-socialism. Yes, this means certain people should drop the quote marks in "anarcho"-capitalism. It just makes them sound petty.
Liberty is defined as autonomy, self-direction, the in-practice exercise of self-ownership by moral agents.
Self-ownership is the de facto inalienable self-control that any human being enjoys over their own mind and body absent certain actions taken upon them by other human beings e.g. murder. This exists by default due to other possibilities being logically absurd and relying on physical space and laws being organised in some way other than the 3-dimensional excludable space that exists now.
Agent, Action, Location, Time are the four primary components in assessing practical and moral significance of actions. When speaking of humans the four questions expressing this are Who, What, Where, When? often used in, say, a murder case or deciding who does and does not get a particular house. Socialism actually constitutes a grand denial of this universal law.
Moral agents are people, basically. They are distinguished from trees and frogs by their moral agency, or ability to tell that their actions have consequences for the continued self-direction of others - that they either do or do not respect others' self-direction.
Allocative efficiency is responsiveness of the process of resource allocation to changing circumstances as they change. Since statist socialism is not up for discussion the only problem here is the absence of money.
Predatory pricing is the practice of drawing on one's reserves of resources / money by lowering the prices one charges in trades below the market rate for whatever type of trade we're talking about.
Money is whatever people accept in trade more as a store of value for future trades than for any other use it may potentially be put to.
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BASIC ECON
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"You said that you understand economics."
Well... I've studied it extensively, certainly. Econ has taken over from history as my foremost academic endeavour these past eight years. I can readily waffle about New Classical, New Keynesian, some Post-Keynesian and a couple of Institutionalist topics with a fluency resembling that of at least an attentive undergrad, whereas my real meat and potatoes are Austrian on the one hand and British Classical Econ on the other.
As it is British Classical Econ ( per Smith & Ricardo) that animates both Classical Anarchism and Marxism I find myself able to say, at the very least, that while Proudhon and his liberalism-socialism splicing ilk have many good points to make, I cannot concede the field without insisting upon a couple of sticking points.
It won't surprise you at all to hear me moaning about objective value theory. In fact arguments between subjectivist and objectivist economic analysis are as old as the hills.
St Augustine was on the objective side, Thomas Aquinas the subjective, but neither theory really made a big mark because they were diffuse messes; the subjectivists just said "it's in your mind" while the objectivists just said "it's in the Earth" with little explanation; both ultimately referring to God's will at some point.
Then along comes Smith who formalises the liberal philosophy taking off in intellectual circles at the time and smushes it together with an economic analysis assuming, as always, that exchanges between people are simply a swap of equal values - something that Carl Menger found unbearable in the late 19th Century.
Smith's theory takes off big time, and becomes the standard in Great Britain until being overturned in the 1870's by William Stanley Jevons. But before we get to that bit there's the ruffian Ricardo to contend with, a man who finally decided that labour mixed with stuff gives stuff its value and thus determines its price. He never went into specifics on this, but because of his theories of comparative advantage and his 'monetary school' theory of the business cycle he gets a pass from me - better than he gets from Rothbard.
You can probably imagine labour value matching up nicely with the theory of equal exchange in trade. This nagged at the minds of three men in the 1860's and 70's until all three, within a couple of years of each other, published new economics treatises positing completely new - and finally rigorous - subjective value theories, all different but all revolving around the concept of emotional, psychological or spiritual well-being called utility.
At a stroke these men - Menger, Jevons & Leon Walras - had revolutionised economics as only Smith had previously. Their theory offered a concise and clean explanation for why a human-being would even bother to engage in any series of acts that change their situation - it is because they subjectively value their potential future situation - state of being - more than their present one.
Once this is stated out loud, its implications soon become inescapable. People aren't trading because they're exchanging equal values, they're trading because both parties value the goods they get out more than the goods they put in. That is, they both profit, making trade what economists call 'mutually unequal' because two exchanges are taking place, one each in the minds of both participants.
However, if this utility model is a fair enough representation of how humans are motivated to act from moment to moment, then alternatives to it must be false. If human experience & cognition determines the value an individual places on ends they can attain, including goods, then that value cannot by definition reside in the goods themselves.
Therefore any theory that requires value be in things themselves, that it be objective, is false, making the cost theory of value, the exchange theory of value, the use theory of value, the time theory of value, and the labour theory of value false. As these things are demonstrably false, any further axioms relying upon them are also.
Pretty much the only part of Proudhon's anti-profit & anti-interest stance on econ that can survive this truth is wage slavery, since it can be justified with or without reference to the labour theory of value.
So that's the gentlest econ history lesson I know how to give. I ain't a scholar in the discipline, much though I wish otherwise, as I misused my young life in English degrees and Media Studies... learning the semiotics of written words and designed spaces plus the tyranny of objectification and alienation. Gun to the temple stuff. Even Chomsky would agree.
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ANCAP & ANCOM FUTURES
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"Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?"
No. There's no evidence whatsoever. This is why this a difficult question to actually answer honestly.
As to the actual question, I'll answer when they drop the quotes. In all seriousness I will answer with reference to the intrinsic similarities between AnCap arbitration agencies and AnCom communes here, and then answer the basic econ case beneath other quotes from Finnish Anarchist's question further down.
Wouldn't "anarcho"-socialist society turn into a statist society due to unification of the church, the creche, the school, the hospital, the farm, the store, & the law court into the co-op / commune?
The way Kropotkin described his idealised Paris Commune it sounded as much like ancient Athens as a stateless society, just with 5-hour working days. That sounds like a directly-democratic city-state to me...
An advocate of such would be an anarchist archist, or an archist anarchist... either way there's the oxymoron everyone's trying to accuse everyone else of.
But I assume the answer is no, and I assume this because in your socialist anarchist world people will be free to drop out of their co-op / commune and take up with a different existing one or form a new one of their own.
And what is a commune? Or a dispute-resolution co-op? Are they not specialised organisations that people subscribe to by offering their labour services in return for the protection of the commune / co-op?
That sounds an awful lot like the quid pro quo marking the relationship between a labourer and an employer, or more relevantly here, between a customer and a service provider, though the customer generally surrenders money, not actual labour.
Let's bare in mind that the only distinction between these two circumstances is one that is imagined by folks like those delightful people running the Edinburgh Student Housing Co-op, this idea that there's something woefully inefficient about private property and the money prices that trading it gives rise to. They think charging rent at £300 per month (rounded down) is a panacea when all that's happened is that the Co-op requires the residents to fix up everything themselves rather than be spared such needs (money buys services, remember) ain't paying the cost of acquiring the building it's based in (it is leased for free by Castle Rock Edinvar Housing Association) and so is charging artificially low rents, a condition that will necessarily be temporary or lead to the extinction of the co-op.
Now, the ease of secession is supposed to assure competition by keeping the management of any one commune / co-op / DRO constantly aware that their clients can abandon them if the fancy should so take those clients. Even in the event of something as insipid as the abolition of money at least this modicum of competitive pressure would motivate people to vote for slightly less ridiculous commune policies than they would otherwise vote for.
As for you, so for me. The marketplace of communes / co-ops / DROs will admit no monopolist.
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COLLAB OR COLLUDE?
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"According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this)."
I guess there is a straight-forward econ answer to this question and a more sector-specific one.
On the basis of my understanding of economic theory I would posit that the incentive among folks working at one arbitration agency to collude with those at another would be constantly offset by their desire to win actual business, and since they won't have any special means by which to obscure their dealings they will be incentivised toward more honesty than might be the case in a state monopoly law system.
Where two insurers are likely to end up at loggerheads today, they go to arbitrators and, to preserve their good standing, abide by those arbitrators' decisions. Two private arbitrators, both of whose management have identified the possibility that they will be at odds someday, decide to make a contract between the two companies stating the identity of a 3rd DRO that they will place their disputes before. This is as much collaboration as anybody is talking about.
David Friedman writes that this collaboration basically takes two forms;
1. any two DRO's agree with each other what third DRO they will go to if they ever have a dispute between themselves, and
2. the set of laws themselves, as per standardisation amongst railway companies as to track guage and loading guage of the line, or manufacturers as to the dimensions of components*.
Tom Bell's take on basically the same subject is similar, and with equally horrible formatting, but at least it has hyperlinks to all the sections, and cites some real polycentric private law systems, such as [Section 1. a] the Kapauku with their system of tonowi judges, [Section 1. b] Maghrebi traders, the Law Merchant (Lex Mercatoria), and the American Arbitration Association.
Tom Bell also presented at the Mont Pelerin Society and summed up how private law necessarily precedes the existence of the state or even jurisprudence itself.
* Concerning standardisation, the PageAbode Anarchist FAQ utterly misrepresents the point of such a trend by stating that it renders the existence of multiple law providers pointless. It ain't different laws customers want, it's fair decisions in the event of disputes and low prices.
A worthwhile comparison, this time from Friedman and cited in the Anarchist FAQ, is the car industry, in which standardisation of components and of factory machines makes the quality of cars far greater than it could be without the economies of scale afforded by that standardisation.
Yet there are still lots of car companies, and cars continue to get better and better, with greater comfort, more fancy things inside, greater safety features, and longer average mileages before needing their first service. Not exactly a damning verdict on this capitalist malarkey, right?
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FREE MARKET CARTELS?
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"The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit."
Why do you see it that way? Which industries in which countries at which points in time look to you like cartels?
The Coca-Cola Company and PepsiCo in beverages and snacks are kings or queens of the hill. There are no competitors who even compare to these two giants for market share in their space. So why is there no love between them? No evidence has so far come to light of even the slightest hint of cartelisation.
Likewise in the case of The Walt Disney Company and 21st Century Fox in media.
Or we would have mentioned China Mobile, Vodafone and Bharti Airtel in mobile telecoms.
There is no evidence of cartelisation in any freely trading industry ever - even Standard Oil under Rockefeller doesn't qualify as a monopolist - therefore it won't happen.
In fact almost none of the so-called robber barons actually robbed anybody as Burton Folsom illuminates in his book The Myth of the Robber Barons & lectures.
For example Cornelius Vanderbilt actually defied (see 9m11s to 20m15s of the video) an existing, government-sanctioned monopoly in New Jersey/New York steamboat services and then a subsidised competitor from 1817 to 1850.
And so we move on to predatory pricing, baby. Tom DiLorenzo wrote a paper on US anti-trust laws for which he actually went and looked to see what the scary monopolists were up to in the 1880's and found nothing a neoclassical or Austrian would call monopoly in any of the 17 industries for which data were available. The data and findings are also included in a chapter of DiLorenzo's book.
On the same note DiLorenzo points out in this article that the only ones harmed in some way by the business practices of the so-called robber barons were their competitors, and it was those competitors who got the ball rolling on Anti-Trust laws by writing their congressman. He mentions one truly damning example of the impact of anti-trust regulation;
And AnComs want more of this? Anyway.
To return to the Tom Woods lecture video, at 37m10s he gets onto predatory pricing in earnest and mentions that economist George Stigler calls it "embarrassing" to hear any economist say they believe in predatory pricing because nobody has been able to find a single solitary example in the real world.
Woods explains over several minutes - using George Reisman's work in Capitalism - that even a chain store does not gain financial advantage from predatory pricing over long periods and cannot raise prices after the competitors are gone. Any attempt to raise prices above that market rate creates incentives for newcomers to enter the industry again, and even at the pre-predatory market rate there will still be room for new competitors.
He also explains minimum resale price agreements between producers and retailers - Merck in pharma and WalMart in drug retail - and how they solve the problem of predatory pricing, plus how the US anti-trust law makes MRPA's illegal.
In a further history lesson, Woods explains that the chemicals (chlorine and bromine especially) magnate Herbert Dow (the Dow Jones Industrial Average is partly named after him) was confronted by a real cartel in the late 19th Century formed of German chemicals companies backed financially by the German Imperial government - yeah, market monopoly, bro... - who conspired to sell bromine in Europe below the market rate at which he was selling. He decided "if they wanna sell it, I'll buy it..." so his purchasing managers bought all bromine made by the cartel members at their below-market values before selling it on at market rates, netting Herbert Dow a tidy profit and bringing Dow Chemical Co. to the entire world's attention.
This story goes to show that free markets don't create cartels. In fact they even erode existing ones. These so-called robbers created the prosperity that allowed people to flourish like never before until World War One brought the Long 19th Century to a screeching halt.
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YOU'RE NOT EVEN WRONG
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The case against free markets is non-existent, the case against private property, per my previous comment, is just a mess of sloppy historical analysis, and therefore they are not even wrong. Classical Anarchist and Marxist analysis are both bunk, and the accepted literature on the robber barons is just plain lazy, as is labour history, coincidentally.
It should be pretty clear that the degree of cartelisation of an industry positively correlates with the degree of government control of that industry with things that are completely government controlled (schools & hospitals in the UK) or banned (firearms & narotics, also in the UK).
Otherwise legalising drugs would strengthen the drugs cartels, right? But if you're in favour of narcotics being illegal, how would you police that in a stateless society? My point is that only the state can regulate these things (trade between consenting persons) in the way folks seem to want them regulated, therefore they must prefer the existence of the state to its non-existence, making them archists.
Or, alternatively, they believe in achieving a stateless society in which people cannot organise into corporations and conduct finance, trade and complex production through deepening division of labour. But if this is the case then they're just primitivists and effectively in favour of killing off those humans who depend for their existence on the legacy of the past two Centuries' economic development - that is about 19 in every 20 people will have to die so that these Anarchists can feel in tune with nature, assuming they're not among the 19.
The full text of the comment stream from my 'willingness to debate' post onwards is presented here, and followed by a long text responding to the last comment in the stream by Finnish Anarchist.
Text highlighted in yellow like this is annotations by me.
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Matthew John Hayden
Oct 2, 2015
+BadMouseProductions what topics would the debate cover?
Is it supposed to be about the ballsy memes? Remember any such meme is subject to the problem of summarising information about an ideology.
If it's not, and rather you just wanna have an AnCap vs. AnCom tickling contest then I'm up for a chat.
I happen to be informed and intelligent enough to handle a fairly simple discussion of epistemology, ontology, economics, ethics, jurisprudence and history if you're in the mood for a West Country shindig.
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eyeseethroughyou
Nov 4, 2015
+Matthew John Hayden "I happen to be informed and intelligent enough to handle a fairdiscussion"
Yet you believe that private property can exist without a state/government? I find that hard to believe.
"and history"
Then you would know that historically speaking, modern concepts of private property and capitalism arose along side the state and are, in fact, functions of the state. Ayncraps like you hold yourselves to a high standard, despite the fact that your entire ideology is intellectually, historically and philosophically bunk.
This paragraph will come back to haunt this person.
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Matthew John Hayden
Nov 7, 2015
+eyeseethroughyou
Backup your claims with reason and evidence and I might consider spending time and effort responding.
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Kenny Kendall
Nov 7, 2015+
+Matthew John Hayden
You don't need "evidence" to say that private property is enforced by the state, because it is.
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Matthew John Hayden
Nov 8, 2015
+Kenny Kendall
My claim is that it can exist sans the state.
And my interlocutor's case is that it cannot.
In other words either you're not paying attention to what either of us are saying or you're being deliberately dishonest.
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eyeseethroughyou
Nov 8, 2015
+Matthew John Hayden You can claim that unicorns live in your basement, but so what? I'd equally believe that unicorns live in your basement as I would that the state and private property could exist independently. In any case, it's well understood that capitalism arose along side the state, following the enclosure acts of the 15th century and the emergence of agrarian capitalism. If ayncraps were honest and actually studied history, I'd take them more serious.
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Kenny Kendall
Nov 8, 2015
+Matthew John Hayden
"My claim is that it can exist sans the state.
And my interlocutor's case is that it cannot."
Ok, so you make a positive claim, he rejects your claim and you think it's his responsibility to produce evidence for countering your claim. You fail to realize that if you're the one to make a positive claim; you have to be the one to prove it or you might as well assume the claim isn't true.
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Matthew John Hayden
Nov 9, 2015
+eyeseethroughyou
You started by talking about private property. My responses are in reference to that.
Now you talk of capitalism as though I'm supposed to see these two concepts as one and the same...
I'm confused.
Maybe you think I'm one of the nutty AnCaps who think capitalism is some kind of moral system or a panacea for all of life's problems...
Sorry to disappoint, but I'm just a boring old anti-state liberal.
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Matthew John Hayden
Nov 9, 2015
+Kenny Kendall
Saying private property can exist sans the state is only a positive claim because I used the word 'can' and says nothing about whether some additional effort is required to perform the reality of private property versus its absence.
So you conflated real-life action with language.
Here's what I mean;
"I believe public/common property can exist without the state."
My statement about private property applies equally to its opposite, this common thing you're all bully about.
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eyeseethroughyou
12:18 AM
+Matthew John Hayden
"'I'm just a boring old anti-state liberal"
Ok, but your position that you can have a free market capitalist system based on private property without a state is still irrational. You're an ayncrap that just doesn't put on airs of moral integrity.
"Saying private property can exist sans the state is only a positive claim because I used the word 'can' and says nothing about whether some additional effort is required to perform the reality of private property versus its absence"
This is just a really weasally way of admitting that you can't demonstrate, either through argument or historical/empirical evidence, that private property can exist sans the state. If you can't demonstrate or make a coherent, logically sound argument for stateless capitalism, than why should anyone accept your position?
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Finnish Anarchist
11:58 AM
+Matthew John Hayden You said that you understand economics. Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?
According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this). The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit.
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Matthew John Hayden
3:30 PM
To +eyeseethroughyou, this is sort of in response to +Kenny Kendall as well, so I apologise if bits of this seem irrelevant to your comment.
If you'd wanted historical examples you could have just asked upfront;
Icelandic Althingi Commonwealth (200 years)
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html
Republic of Cospaia (300 years - abolished by Napoleon Bonaparte)
https://en.wikipedia.org/wiki/Republic_of_Cospaia
https://dailyanarchist.com/2015/03/11/the-anarchist-republic-of-cospaia/
Tuath system in Ireland (2,000 years)
http://foranemergentgovernance.tumblr.com/post/1517339178/ireland
https://en.wikipedia.org/wiki/T%C3%BAath
Harrappa / Indus Valley Civ (2,300 years)
https://en.wikipedia.org/wiki/Indus_Valley_Civilization
https://hayden.liberty.me/scarcity/
http://www.independent.org/pdf/tir/tir_10_3_04_thompson.pdf
There's four off the top of my head. David Friedman & Bruce Benson are the guys who are probably best positioned to talk about non-state / private law.
I keep talking about private law because by definition a private law society is always characterised by the ownership of and trade in title to private property in land and everything else.
Sometimes this includes human beings, usually it does not, but you do not want to start using such cases as arguments against private property itself considering what modernity has given us in terms of technology, comfort, and knowledge of human nature.
To date there is no evidence of slavery in the Harrappan / Indus Valley Civilisation, and only of indentured servitude for criminals in Ireland, Scandinavia and ancient Germania, where people practiced a polycentric private law system based around weregilds, or "man prices".
https://en.m.wikipedia.org/wiki/Weregild
Just a quick piece here for some perspective on why private property is not some magical state invention;
https://properal.liberty.me/property-is-not-just-a-social-construct/
A quick explanation for how private property is an obvious method of social organisation because it minimises conflict;
https://properal.liberty.me/the-property-strategy/
This article, and the paper it's based on, posit individual property supplanting the common kind some time in the Holocene Period in conjunction with the rise of agriculture - this point is important later;
https://properal.liberty.me/emergence-of-individual-property-rights-in-humans/
On the other side, the Left case is probably summed up best in David Graeber's work Fragments of an Anarchist Anthropology;
http://www.eleuthera.it/files/materiali/David_Graeber_Fragments_%20Anarchist_Anthropology.pdf
Yes, I read Classical Anarchist intellectual literature, or at least I do in areas like sociology and anthropology - I only read the econ stuff if I really have to. Graeber is my favourite author in this space.
In this work he sets out to find examples of common property societies lasting from before Antiquity to today, and boy howdy does he find some;
https://en.m.wikipedia.org/wiki/Piaroa_people
https://en.m.wikipedia.org/wiki/Tiv_people
https://en.m.wikipedia.org/wiki/Merina_people
Note none of these groups practice the kind of advanced agriculture that has characterised every civilisation in history, and which in fact is the explanation for the emergence of every civilisation in history.
Apparently a common property society can't even get from settled subsistence to farming; whoops. That means common property societies have no way to advance themselves from their present station. This would consign almost the entire human race to death by starvation. Wow, don't I feel immoral for advocating private property and the freedom to enter wage labour.
Maybe you backed the wrong horse, my Commie friend.
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CONCERNING WEASALS
Since I've satiated - for now - your hunger for knowledge, it's time to talk about argumentation. You deleted an important word - 'can' - when you quoted me, and you forgot, somehow, the second and operative part of my argument, presumably because you have no response to it. Fair enough.
But do try to be a little more honest in future, because it makes life so much easier for everyone and spares me having to write extended comments like this one.
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A NOTE ABOUT HISTORY
[I think this bit is more for Kenny Kendall than eyeseethroughyou, but there is some inevitable conflation]
When a 19th Century Anarchist ( you call me an AynCrap, I call you obsolete ) tells me I know nothing of history while offering barely a ghost of a lesson themselves I am at a loss as to what the complaint is supposed to be.
Nobody would disagree with you about the increase in prevalence of capitalism from the 16th to 20th Centuries, or that the beginning of that increase coincides with the English / Scottish Enclosure Acts.
Concerning the prior claim, we have the GDP hockey stick graph, that delightful rejoinder to those who would cry foul at the mode of production called capitalism;
http://finance.townhall.com/columnists/danieljmitchell/2014/06/28/the-amazing-hockey-stick-of-economic-progress-n1856781
http://rdmckinney.blogspot.co.uk/2014/02/the-great-stagnation-explained.html
Course it was also irrelevant to the discussion, as private property has been the norm of every single civilisation to exist with the exceptions of the later Byzantine Empire (the Theme system of Absolute Feudalism, if you will) and the wave of state socialist adventurers in the 20th Century - a beat only Cuba, Laos and North Korea seem to have kept to.
Presumably you will quote the above and say it's irrelevant because you're an anarchist, but I'm not using state socialism to attack you, and nor would I.
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ECON VOX
I have answered the case concerning stateless private property and, in the process, stateless social / public / common property resoundingly in favour of the private kind, but there is still something bugging me.
I'm not sure why you asked about "stateless capitalism" as capitalism is just a mode of production and therefore agnostic to questions of the presence or absence of a state.
Whether entrepreneurs will ask financiers for money to fund previously untried resource allocation plans for the production of existing or original goods and services ( motivated by profit and loss ) relies only on the existence of private property and money.
It takes a lot less violence for several property owners to just hold and trade what they have than to go and expropriate what others have. This should be obvious. Congrats for hiding from this basic fact so well.
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DANCES WITH PRAXIS
See how much trouble I've gone to now? This was why I was fobbing you and Kenny off previously. I wanted to wait until somebody else made some compelling argument before saying what I've said above.
Don't worry, I don't expect you to respond in kind - in fact I expect you to pick and choose bits of this to attack, like my choice of link to the Indus Valley Civ. Since I wrote it I'm evil, or somesuch, right?
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Letter to a Finnish Anarchist
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EXECUTIVE SUMMARY
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"You said that you understand economics."
• Well, I hope so. More than that clown Molyneux.
"Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?"
• The only attested cartels in history and today are either state-owned, state-supervised, serving the state as their only customer, or illegal. Examples include police and security, finance, education, healthcare and pharmaceuticals. The illegal category is best exemplified in the UK by the firearms and narcotics industries.
"According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this)."
• Correct. And that's pretty much all I have to say on this point.
"The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit."
• This is a general economics question that speaks to the operation of humans interacting with each other in a marketplace.
• The answer is obviously 'no' because there's no evidence to date of free market cartels and because when humans organise into teams of whatever nature (corporate, co-operative, whatever) they compete horizontally against other teams trying to offer the same goods and/or services to the same demographic of potential customers.
• What tactics might cartels or monopolists employ, predatory pricing? No cigar. It's actually a joke in the econ profession - or an embarrassment in George Stigler's words - that anyone even still believes in free market price-fixing due to the complete lack of evidence.
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DEFINITIONS
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DRO, arbitration agency, & private court are synonymous. These agencies can be organised as for-profit or non-profit corporations, or as for-profit or non-profit co-ops (community, worker, customer, whatevs).
Corporation is taken to mean body of persons organised in such a way that its owners and workers are functionally distinct - in practice some people might own shares in a corporation that also employs them, but the positions are distinct nonetheless. People gain and lose ownership by buying or selling shares respectively.
Co-operative is taken to mean a team in which owners acquire and lose ownership shares on the basis of their interactions with it, whether as workers, customers, or just local neighbourhood dwellers. Any one co-op could be organised on any of these ownership principles or any combination of them.
Cartel means an alliance of people in an industry with the purpose of raising its price above market level, making this near enough a synonym of oligopoly.
Price is the ratio at which two goods are traded; three elephants for one cruise missile, etc.
Market or marketplace means the setting for trade.
Trade is any practical exchange of goods or services in which both parties give something up to each other, thus closing the debt loop to each other, which is why in business the term 'to close' is so often used to refer to the completion of an exchange. Any economic obligation between the parties re the objects traded begins and ends with that specific trade, so neither is in debt to the other.
Debt loop is taken to mean the opening between Person A giving Person B something and Person B giving Person A something in return. For example, in a common property gift economy the debt loop is infinite, & can never be escaped.
Industry is defined here as a set of social and productive activities in production of a specific good or service, or a specific type of good or service, say footwear, insurance, or dispute resolution.
Liberalism is taken to mean the ideology of individual liberty, that political force - if it exists at all - should be employed in the protection of people's liberty.
Socialism is taken to have two meanings;
a. The materialist political philosophy placing normative priority upon equality of circumstance and -somehow- luck.
b. The economic practice of social ownership of the means of production, distribution and exchange, which in a statist/archist context means state ownership and control, and in an anti-statist/anarchist context means community or union ownership. A whole lotta community co-ops or communes should result.
Anarchism is defined as the ideological preference for anarchy over archy. This one really should be obvious, but even in 2015 people are still trying to claim that a word from a root meaning 'no archon' in ancient Athens somehow HAS to mean anarcho-socialism. Yes, this means certain people should drop the quote marks in "anarcho"-capitalism. It just makes them sound petty.
Liberty is defined as autonomy, self-direction, the in-practice exercise of self-ownership by moral agents.
Self-ownership is the de facto inalienable self-control that any human being enjoys over their own mind and body absent certain actions taken upon them by other human beings e.g. murder. This exists by default due to other possibilities being logically absurd and relying on physical space and laws being organised in some way other than the 3-dimensional excludable space that exists now.
Agent, Action, Location, Time are the four primary components in assessing practical and moral significance of actions. When speaking of humans the four questions expressing this are Who, What, Where, When? often used in, say, a murder case or deciding who does and does not get a particular house. Socialism actually constitutes a grand denial of this universal law.
Moral agents are people, basically. They are distinguished from trees and frogs by their moral agency, or ability to tell that their actions have consequences for the continued self-direction of others - that they either do or do not respect others' self-direction.
Allocative efficiency is responsiveness of the process of resource allocation to changing circumstances as they change. Since statist socialism is not up for discussion the only problem here is the absence of money.
Predatory pricing is the practice of drawing on one's reserves of resources / money by lowering the prices one charges in trades below the market rate for whatever type of trade we're talking about.
Money is whatever people accept in trade more as a store of value for future trades than for any other use it may potentially be put to.
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BASIC ECON
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"You said that you understand economics."
Well... I've studied it extensively, certainly. Econ has taken over from history as my foremost academic endeavour these past eight years. I can readily waffle about New Classical, New Keynesian, some Post-Keynesian and a couple of Institutionalist topics with a fluency resembling that of at least an attentive undergrad, whereas my real meat and potatoes are Austrian on the one hand and British Classical Econ on the other.
As it is British Classical Econ ( per Smith & Ricardo) that animates both Classical Anarchism and Marxism I find myself able to say, at the very least, that while Proudhon and his liberalism-socialism splicing ilk have many good points to make, I cannot concede the field without insisting upon a couple of sticking points.
It won't surprise you at all to hear me moaning about objective value theory. In fact arguments between subjectivist and objectivist economic analysis are as old as the hills.
St Augustine was on the objective side, Thomas Aquinas the subjective, but neither theory really made a big mark because they were diffuse messes; the subjectivists just said "it's in your mind" while the objectivists just said "it's in the Earth" with little explanation; both ultimately referring to God's will at some point.
Then along comes Smith who formalises the liberal philosophy taking off in intellectual circles at the time and smushes it together with an economic analysis assuming, as always, that exchanges between people are simply a swap of equal values - something that Carl Menger found unbearable in the late 19th Century.
Smith's theory takes off big time, and becomes the standard in Great Britain until being overturned in the 1870's by William Stanley Jevons. But before we get to that bit there's the ruffian Ricardo to contend with, a man who finally decided that labour mixed with stuff gives stuff its value and thus determines its price. He never went into specifics on this, but because of his theories of comparative advantage and his 'monetary school' theory of the business cycle he gets a pass from me - better than he gets from Rothbard.
You can probably imagine labour value matching up nicely with the theory of equal exchange in trade. This nagged at the minds of three men in the 1860's and 70's until all three, within a couple of years of each other, published new economics treatises positing completely new - and finally rigorous - subjective value theories, all different but all revolving around the concept of emotional, psychological or spiritual well-being called utility.
At a stroke these men - Menger, Jevons & Leon Walras - had revolutionised economics as only Smith had previously. Their theory offered a concise and clean explanation for why a human-being would even bother to engage in any series of acts that change their situation - it is because they subjectively value their potential future situation - state of being - more than their present one.
Once this is stated out loud, its implications soon become inescapable. People aren't trading because they're exchanging equal values, they're trading because both parties value the goods they get out more than the goods they put in. That is, they both profit, making trade what economists call 'mutually unequal' because two exchanges are taking place, one each in the minds of both participants.
However, if this utility model is a fair enough representation of how humans are motivated to act from moment to moment, then alternatives to it must be false. If human experience & cognition determines the value an individual places on ends they can attain, including goods, then that value cannot by definition reside in the goods themselves.
Therefore any theory that requires value be in things themselves, that it be objective, is false, making the cost theory of value, the exchange theory of value, the use theory of value, the time theory of value, and the labour theory of value false. As these things are demonstrably false, any further axioms relying upon them are also.
Pretty much the only part of Proudhon's anti-profit & anti-interest stance on econ that can survive this truth is wage slavery, since it can be justified with or without reference to the labour theory of value.
So that's the gentlest econ history lesson I know how to give. I ain't a scholar in the discipline, much though I wish otherwise, as I misused my young life in English degrees and Media Studies... learning the semiotics of written words and designed spaces plus the tyranny of objectification and alienation. Gun to the temple stuff. Even Chomsky would agree.
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ANCAP & ANCOM FUTURES
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"Could you help me understand one thing: wouldn't "anarcho"-capitalist society turn into a statist society due to cartels formed by security companies?"
No. There's no evidence whatsoever. This is why this a difficult question to actually answer honestly.
As to the actual question, I'll answer when they drop the quotes. In all seriousness I will answer with reference to the intrinsic similarities between AnCap arbitration agencies and AnCom communes here, and then answer the basic econ case beneath other quotes from Finnish Anarchist's question further down.
Wouldn't "anarcho"-socialist society turn into a statist society due to unification of the church, the creche, the school, the hospital, the farm, the store, & the law court into the co-op / commune?
The way Kropotkin described his idealised Paris Commune it sounded as much like ancient Athens as a stateless society, just with 5-hour working days. That sounds like a directly-democratic city-state to me...
An advocate of such would be an anarchist archist, or an archist anarchist... either way there's the oxymoron everyone's trying to accuse everyone else of.
But I assume the answer is no, and I assume this because in your socialist anarchist world people will be free to drop out of their co-op / commune and take up with a different existing one or form a new one of their own.
And what is a commune? Or a dispute-resolution co-op? Are they not specialised organisations that people subscribe to by offering their labour services in return for the protection of the commune / co-op?
That sounds an awful lot like the quid pro quo marking the relationship between a labourer and an employer, or more relevantly here, between a customer and a service provider, though the customer generally surrenders money, not actual labour.
Let's bare in mind that the only distinction between these two circumstances is one that is imagined by folks like those delightful people running the Edinburgh Student Housing Co-op, this idea that there's something woefully inefficient about private property and the money prices that trading it gives rise to. They think charging rent at £300 per month (rounded down) is a panacea when all that's happened is that the Co-op requires the residents to fix up everything themselves rather than be spared such needs (money buys services, remember) ain't paying the cost of acquiring the building it's based in (it is leased for free by Castle Rock Edinvar Housing Association) and so is charging artificially low rents, a condition that will necessarily be temporary or lead to the extinction of the co-op.
Now, the ease of secession is supposed to assure competition by keeping the management of any one commune / co-op / DRO constantly aware that their clients can abandon them if the fancy should so take those clients. Even in the event of something as insipid as the abolition of money at least this modicum of competitive pressure would motivate people to vote for slightly less ridiculous commune policies than they would otherwise vote for.
As for you, so for me. The marketplace of communes / co-ops / DROs will admit no monopolist.
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COLLAB OR COLLUDE?
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"According to "an"caps, security providers would collaborate to handle disputes between their customers, because otherwise they would have to go to war with each other (for example, Walter Block admitted this)."
I guess there is a straight-forward econ answer to this question and a more sector-specific one.
On the basis of my understanding of economic theory I would posit that the incentive among folks working at one arbitration agency to collude with those at another would be constantly offset by their desire to win actual business, and since they won't have any special means by which to obscure their dealings they will be incentivised toward more honesty than might be the case in a state monopoly law system.
Where two insurers are likely to end up at loggerheads today, they go to arbitrators and, to preserve their good standing, abide by those arbitrators' decisions. Two private arbitrators, both of whose management have identified the possibility that they will be at odds someday, decide to make a contract between the two companies stating the identity of a 3rd DRO that they will place their disputes before. This is as much collaboration as anybody is talking about.
David Friedman writes that this collaboration basically takes two forms;
1. any two DRO's agree with each other what third DRO they will go to if they ever have a dispute between themselves, and
2. the set of laws themselves, as per standardisation amongst railway companies as to track guage and loading guage of the line, or manufacturers as to the dimensions of components*.
Tom Bell's take on basically the same subject is similar, and with equally horrible formatting, but at least it has hyperlinks to all the sections, and cites some real polycentric private law systems, such as [Section 1. a] the Kapauku with their system of tonowi judges, [Section 1. b] Maghrebi traders, the Law Merchant (Lex Mercatoria), and the American Arbitration Association.
Tom Bell also presented at the Mont Pelerin Society and summed up how private law necessarily precedes the existence of the state or even jurisprudence itself.
* Concerning standardisation, the PageAbode Anarchist FAQ utterly misrepresents the point of such a trend by stating that it renders the existence of multiple law providers pointless. It ain't different laws customers want, it's fair decisions in the event of disputes and low prices.
A worthwhile comparison, this time from Friedman and cited in the Anarchist FAQ, is the car industry, in which standardisation of components and of factory machines makes the quality of cars far greater than it could be without the economies of scale afforded by that standardisation.
Yet there are still lots of car companies, and cars continue to get better and better, with greater comfort, more fancy things inside, greater safety features, and longer average mileages before needing their first service. Not exactly a damning verdict on this capitalist malarkey, right?
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FREE MARKET CARTELS?
~~~~~~~~~~~~~~~~~~~~
"The way I see it, this would very likely lead to a situation in which security companies collaborated to raise prices in order to make more profit."
Why do you see it that way? Which industries in which countries at which points in time look to you like cartels?
The Coca-Cola Company and PepsiCo in beverages and snacks are kings or queens of the hill. There are no competitors who even compare to these two giants for market share in their space. So why is there no love between them? No evidence has so far come to light of even the slightest hint of cartelisation.
Likewise in the case of The Walt Disney Company and 21st Century Fox in media.
Or we would have mentioned China Mobile, Vodafone and Bharti Airtel in mobile telecoms.
There is no evidence of cartelisation in any freely trading industry ever - even Standard Oil under Rockefeller doesn't qualify as a monopolist - therefore it won't happen.
In fact almost none of the so-called robber barons actually robbed anybody as Burton Folsom illuminates in his book The Myth of the Robber Barons & lectures.
For example Cornelius Vanderbilt actually defied (see 9m11s to 20m15s of the video) an existing, government-sanctioned monopoly in New Jersey/New York steamboat services and then a subsidised competitor from 1817 to 1850.
And so we move on to predatory pricing, baby. Tom DiLorenzo wrote a paper on US anti-trust laws for which he actually went and looked to see what the scary monopolists were up to in the 1880's and found nothing a neoclassical or Austrian would call monopoly in any of the 17 industries for which data were available. The data and findings are also included in a chapter of DiLorenzo's book.
On the same note DiLorenzo points out in this article that the only ones harmed in some way by the business practices of the so-called robber barons were their competitors, and it was those competitors who got the ball rolling on Anti-Trust laws by writing their congressman. He mentions one truly damning example of the impact of anti-trust regulation;
"In what is perhaps the best example of nonsensical double-talk in antitrust history, in 1944 Judge Learned Hand found Alcoa guilty of "monopolizing" the virgin ingot aluminum market by employing "superior skill and foresight" which the judge feared had "forestalled" competition by those businesses with less skill and foresight. He condemned Alcoa for being extremely adept at correctly anticipating market demand for its product and then supplying that demand, to the "exclusion" of its less efficient competitors."
And AnComs want more of this? Anyway.
To return to the Tom Woods lecture video, at 37m10s he gets onto predatory pricing in earnest and mentions that economist George Stigler calls it "embarrassing" to hear any economist say they believe in predatory pricing because nobody has been able to find a single solitary example in the real world.
Woods explains over several minutes - using George Reisman's work in Capitalism - that even a chain store does not gain financial advantage from predatory pricing over long periods and cannot raise prices after the competitors are gone. Any attempt to raise prices above that market rate creates incentives for newcomers to enter the industry again, and even at the pre-predatory market rate there will still be room for new competitors.
He also explains minimum resale price agreements between producers and retailers - Merck in pharma and WalMart in drug retail - and how they solve the problem of predatory pricing, plus how the US anti-trust law makes MRPA's illegal.
In a further history lesson, Woods explains that the chemicals (chlorine and bromine especially) magnate Herbert Dow (the Dow Jones Industrial Average is partly named after him) was confronted by a real cartel in the late 19th Century formed of German chemicals companies backed financially by the German Imperial government - yeah, market monopoly, bro... - who conspired to sell bromine in Europe below the market rate at which he was selling. He decided "if they wanna sell it, I'll buy it..." so his purchasing managers bought all bromine made by the cartel members at their below-market values before selling it on at market rates, netting Herbert Dow a tidy profit and bringing Dow Chemical Co. to the entire world's attention.
This story goes to show that free markets don't create cartels. In fact they even erode existing ones. These so-called robbers created the prosperity that allowed people to flourish like never before until World War One brought the Long 19th Century to a screeching halt.
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YOU'RE NOT EVEN WRONG
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The case against free markets is non-existent, the case against private property, per my previous comment, is just a mess of sloppy historical analysis, and therefore they are not even wrong. Classical Anarchist and Marxist analysis are both bunk, and the accepted literature on the robber barons is just plain lazy, as is labour history, coincidentally.
It should be pretty clear that the degree of cartelisation of an industry positively correlates with the degree of government control of that industry with things that are completely government controlled (schools & hospitals in the UK) or banned (firearms & narotics, also in the UK).
Otherwise legalising drugs would strengthen the drugs cartels, right? But if you're in favour of narcotics being illegal, how would you police that in a stateless society? My point is that only the state can regulate these things (trade between consenting persons) in the way folks seem to want them regulated, therefore they must prefer the existence of the state to its non-existence, making them archists.
Or, alternatively, they believe in achieving a stateless society in which people cannot organise into corporations and conduct finance, trade and complex production through deepening division of labour. But if this is the case then they're just primitivists and effectively in favour of killing off those humans who depend for their existence on the legacy of the past two Centuries' economic development - that is about 19 in every 20 people will have to die so that these Anarchists can feel in tune with nature, assuming they're not among the 19.
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