Lately, I’ve been getting more than my fair share of “socialist anarchists” wanting to claim that anarcho-capitalism is an impossible term. Most arguments with them comes down to a rejection of the english dictionary and the claim, “I just use different definitions for things is all.” I have found that “true” anarchists as they call themselves find it very hard to define exactly who they are and what they stand for. The best explanation I have come across says that capitalism is a system in which the government supports and gives special privileges to corporations and allows them to underpay the workers. Let’s ignore the fact that the anti-capitalists have always been at the front of the issue of minimum wage, forcefully raising it and forcefully raising unemployment. Let’s pretend that’s a non-issue for now. Let’s stick to theory; I’ll get into a more clear and proper definition of socialist anarchism later. For now lets stick to the basics. First “capitalism”.
The english dictionary defines capitalism as follows:
an economic wealth in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth
The anarcho-capitalist may argue with the “corporations” aspect by saying that they are government invented entities. A corporation is a business “authorized” to operate as a “single entity”. This would lead to a deeper and more interesting conversation, but for now, the goal is set on socialism calling itself anarchy.
It is worth noting that the term capitalism was coined around the same time as socialism and communism. These three terms each represented a specifically different form of economics. Capitalism was meant to represent the free market and private trade. Every definition of capitalism from english history to classical socialism and liberalism have been consistent on what this word means. Socialism has always been a way to define centrally controlled production.
The socialist anarchist also tries to claim originality on anarchy or anarchism. Let’s go through the motions of this one. Anarchy first appeared in Athens in 404 B.C., it was a noun of “anarkhos” which means “ruler-less”. It appeared in French in the 1530′s coming from the medieval latin “anarchia” which means “lack of a leader, the state of people without a government”. Prince Peter Kropotkin (1842 – 1921), a Russian philosopher, talked openly of individualist anarchy.
Either the State for ever, crushing individual and local life, taking over in all fields of human activity, bringing with it its wars and its domestic struggles fo power, its palace revolutions which only replace one tyrant by another, and inevitably at the end of this development there is ... death! Or the destruction of States, and new life starting again in thousands of centers on the principle of the lively initiative of the individual and groups and that of free agreement. The choice lies with you!
The socialists point to people like Pierre-Joseph Proudhon as the father of anarchy, who happened to be socialist. Except calling yourself an anarchist does not make you an anarchist. He made an attempt to create his own central bank that could place an income tax on capitalists and shareholders. Basically, he wanted to steal from anyone who was working in the creation of modern goods. Goods that can not be made through barter or the bare hands of individuals. Needless to say this high-tax, low interest system was a massive failure, in fact, we see it being tried again today.
But here’s the most important of this man’s claims, “property is theft”, “property is impossible”, “property is despotism”, and “property is freedom”. By saying “property is theft” he believed that employers were stealing from the employees simply because those employees weren’t being paid the full value of what they were producing. This of course ignores the fact that management is a real job, that labor can be contractually rented, some people prefer stable work, and that profits = growth.
He believed that the only legitimate form of property was the property of a single man’s labor. Of course if a man can not choose to rent his labor to a stable employer who can put all the processes of production together and generate profits and growth, he does not truly own his labor. When Proudhon states “property is theft” and “property is freedom” he is trying to say that man’s only property is what he creates. “Bosses” must create in order to earn, by paying people and by taking profits for the company, and management costs, those “bosses” are stealing.
Per Bylund, a PhD candidate in economics at the University of Missouri and Ludwig von Mises Institute fellow expands on this by showing that socialist anarchists are totally ignorant of what Mises called “time preference”. He states:
To understand this view, we need to remember time preference is not applicable (or not allowed). From the socialist perspective, any difference in value between input and output is either fraud or theft (to use libertarian terminology). If you invest labor (input) to achieve a value of $100 and receive pay (output) of $95 dollars you are being oppressed.
This is where capitalism becomes “evil”, and I’m glad Per Bylund can explain this because every anarcho-socialist I have spoken to can not explain this or they refuse to do so. Instead, they choose to argue over definitions. This also means that by the mere act of offering a job, a person is conspiring to commit a crime. Bylund also explains:
The analysis, however, is fundamentally wrong, and it is so simply because socialists don't understand time preference. It is of value (but not necessarily monetary value) to many a worker frequently to receive a fixed amount of pay for invested labor instead of taking the risks of producing, marketing, and selling a product in the market place (even if the enterprise is not carried out individually but in cooperation with other workers).
It is also true in reverse: the "capitalist" values money now more than money later; thus, profits at a later time need to be greater than labor costs now to "break even." The point here is that if a worker would voluntarily choose between multiple different alternatives there is reason to believe employment is sometimes (or, in perhaps often) an attractive choice.
The socialist not only ignores time preference and voluntary work but the division of labor and market risks. Being able to work for a regular paycheck rather than acting as a sort of “capital-less entrepreneur” is a very attractive thing to most people. Some people prefer, by their own choice to generate $100 worth of products that will go to the market in a month and get $95 now. It is hard to research such history, but it is doubtful that the first “job” was government mandated or done by slavery. In fact, it more than likely originated in the family unit where parents delegated work to children. Or in tribes when a tribe leader may have delegated work to hunters, “Got get food so we can eat.” This was a spontaneous and mutual interaction. It was done without government, and instead private individuals. It was free trade. Anarchy and capitalism.
Add this with the fact that value is subjective, and all of the sudden when socialists say, “Individuals must be paid the value of their actual labor,” the answer is, “According to whom?” $5 holds different value to different people due purely to individual perception. If a person values having a steady job by the amount of the profit that is being “taken” from him, who is to say that is invalid?
To the socialist anarchist is the delivery of a pizza, not worth any sort of payment? He has not produced anything. His pay normally comes from the production of many farmers, between them are truck drivers and cooks at the least. Who is to say that the help of that delivery guy is not worth a bit of pay? What about the managers?
If all men are free individuals, why can the socialist anarchist tell them what they can and can’t do with their own bodies? Only the individual can truly make decisions on what is best for him, and only the individual can subjectively make assessments of value for himself. To the anarcho-capitalist it is perfectly OK for someone to make the individual decision, to refrain from regular work, but they must live with those consequences and if most people prefer to work, the socialist must compete with that. It may sound “unfair” but this is natural spontaneous order.
Making claims about what a person should and shouldn’t do, or what they should “earn”, is not an anarchist way of thinking. It rejects the right to self ownership. Employment and capital are not state functions. They are a part of what makes humans human. To claim otherwise is wrong.
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