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My Beef with Capitalism, in a Nutshell

‘Capitalism’ is a funny word. It means so many different things to so many different people, that it’s become entirely useless as a basis for any kind of rational or constructive communication. For some, it is a vessel to romanticize and to pour all their dreams into. For others, it is a trashcan they fill with their complaints and most cynical expectations for the future. But what is capitalism, at its root?

Some will mention wage labor, others exploitation and yet others will talk of free trade. But I think the defining feature is the ability to accumulate lots and lots and lots of stuff (capital). And then, most importantly, to have a third party protect your ability to control that stuff even when you’re not using it. That third party, of course, is the state (the government).

(Does it have to be a state? No. But I don’t think a non-aggressive organization will go to the same lengths as the state to protect property.)

Without this ability to accumulate and have your title to said stuff protected at little to no cost to yourself, things like wage labor, exploitation and managed trade could not happen. These all depend on the power imbalances that stem from the state protecting capitalists’ control of their property.

I don’t think capitalism would survive without the state. In a stateless society, people would be freer to rise up against people who attempt to control more property than they actually use. Acting in concert, great numbers of people could, in the worst case, purchase arms, form a defense force and fight capitalists on a more level playing field. Squatters, worker-owned cooperatives and similar direct actors would take control of more of the capitalists’ property. In the process, their power would be eaten away.

To those who say that capitalism is free trade, nothing more and nothing less, that is not its defining characteristic. Free trade can happen under many different ideological systems. Free trade is blooming right now in China in the midst of an ostensibly socialist system. Free trade can happen in an anarchist society. I don’t doubt that free trade even happened in the Soviet Union, where some may have bartered vodka for bread (or the opposite), for example.

Neither is exploitation a defining characteristic of capitalism, since it can happen anywhere there is an imbalance of power, including under socialist, communist, democratic or plain old totalitarian regimes. In other words, exploitation is not unique to capitalism.

So that’s my problem with capitalism: that some privileged people get to accumulate tons of stuff at other’s expense by using the government to shield them from market action. By market action, I mean homesteading of property the capitalists aren’t themselves using.

So, I’m not high on capitalism (anymore). What am I into? I like the idea that people’s possessions should be respected. These are the things an individual uses on a regular basis to live his life. I would include all the tools and toys a person uses in their home and business, including a reasonable amount of land to live on, to use for recreation and producing food; and everything that goes with their business.

If a person prospers legitimately, I have no basis to challenge any accumulation of wealth. But I take issue with absentee control of things, especially natural resources. There is an argument that the earth is the common heritage of all people. I find this convincing. So for one person to deny others the reasonable use of this common heritage is not legitimate.

For example, if someone fences off 1,000 acres of land but consistently uses only 2, I don’t consider that legitimate. Simply being first to fence is not a solid foundation for denying this common heritage to others. If someone needed land and had a solid intention to use it to sustain his life, I would support that person in any attempt to homestead a reasonable parcel out of the 1,000 acres.

A capitalist might argue that the the first-fencer mixed his labor with the land or registered title and so it was now “a part of him” (which sounds a little too mystical for my tastes). But the first-fencer only mixed his labor with the 2 acres he is using and the thin strip of land the fence is on. What about the other ~998 acres? He hasn’t done anything there. So I don’t even think the homesteading principle supports the first-fencer’s actions.

But you can’t live life without property, say the capitalists. Yes, you can. You can live life with possessions, the things you control and use. You absolutely can live life without those things that you don’t use but control (property). If you don’t use them, that right there shows that you do not need them in order to live.

I invite reasoned criticism of my comments here. Anything else I do not tolerate.

By George Donnelly

I'm building a tribe of radical libertarians to voluntarize the world by 2064. Join me.

10 replies on “My Beef with Capitalism, in a Nutshell”

Definitely an interesting perspective and I can definitely sympathize. So I take it you have moved philosophically from Agorism to Mutualism? Since what you’re saying seems to be heavily into the labor theory of value….which in my opinion is one of the main differences between Agorism and Mutualism.

It’s interesting how you’ve moved the discussion away from “rights” to “abilities” (ie what is possible with or without govt). I think that many minarchists start with an assumption of property rights and move backwards from there to assume that since you have that right (to own demarcated space on the ground or distant objects through title) that it also means that the state must exist to guarantee that right.

Here’s another way to look at this issue. Think about nomadic societies (past and present). What do they own? Only what they can carry with them or can have overseen by others in their tribe (usually close friends and extended family). They periodically squat on different grazing land, but don’t claim ownership of it in the traditional sense.

…but, what if they wanted to “own” something more substantial? (like a burial plot or a storage facility or maybe money in a secure location) This is where contract enters into the equation and social values become an important part of how we understand “property.” The book of Genesis (for example) is full of stories of nomadic people entering into property contracts (or covenants) with each other and with urban people. The book itself functions as “record keeping” of many of those agreements, but also mentions other ways that people confirmed and remembered these agreements. In a society where writing was a scarce trade, that usually meant having a feast and putting up a big rock or other landmark as some type of memorial. Oral tradition about those landmarks (and people’s adherence to this code) would then ensure that the agreement is kept.

To sum up, I think that people can hold somewhat large amounts of property without a state enforcer. The big difference, in my mind, between a stateless and a statist society is who enforces and decides disputes over property (these disputes are inevitable whether property is large or small). In a statist society the ultimate power of this role goes to the court system and police. In a stateless society different groups would compete for this privilege…if a decision cannot be agreed to through third-party arbitration, then it is up to the various individuals involved to settle the matter themselves through either force or negotiation.

PS – I agree. Capitalism is a pointless word to use in almost any discussion these days.

I love that you’re talking about property and land rights. For those who base their entire philosophy on the idea of property rights I would expect more discussion on this fundamental issue.

A caller many years ago to Free Talk Live asked about some of these basic property issues. What about nomadic people? How do they survive with strict land/property rights? What if I buy or homestead several acres of land for the specific purpose of it being a natural habitat?

They didn’t have many good answers on the air and I don’t have the answers now but I enjoy your articles on the subject and the discussion.

George,

Before I get to my response to this article, I want to thank you for your contributions to the liberty community (of all stripes), especially the Agora I/O Unconferences. You have brought a lot of disparate people together and opened up healthy productive dialog aimed at our joint goal of peaceful evolution toward a voluntary stateless society.

That being said, upon reading your article, a few concerns/objections immediately popped into my head.

Firstly, what if said property owner fenced in the 1000 acres with the express intention of allowing the remaining 998 acres to remain wild—as a conservation project. How would your system of ‘possessions, not property’ (if I may call it that) permit the non-use of land for the purpose of conserving natural spaces? I’m sure you value ecological preservation as much as I do. I’m also sure you wouldn’t want a world packed full of wall-to-wall homes, businesses, factories, and asphault. How would your definition of rightful ownership and homesteading prevent anyone from claiming seemingly unused land as their own, descending like locusts, populating and destroying every inch of the Earth’s surface?

My second concern regards the Theory of Idle Resources. Your homesteader sees land currently not being utilized and claims it as his own. But suppose the owner had indeed intended to use it. Suppose that fencing in the land was merely the first step, and that he was just saving up cash or building up the capital necessary to utilize it. Or, since you seem to be ignoring economic time-preference, consider that he is simply waiting to utilize it when the conditions are most profitable to do so. Perhaps he expects the cost of development to decrease in the future, that labor will be cheaper, or that the market is just not yet there for the goods he intends to produce. Productive endeavors rarely develop over-night. Wouldn’t your system of ‘possessions, not property’ stifle economic production and development—at least, anything beyond what can be done in someone’s garage?

Thank you.

Is there a problem with accumulating wealth if you HAVE homesteaded it? I agree that a mere fence around vast tracts of land is not sufficient, but what if you are using those natural resources to produce things in order to trade and accumulate ‘tons of stuff’, and live better for it? For instance, if I am the producer of refrigerators. I personally only have use for at most one refrigerator in my kitchen. So the first refrigerator I produce could be used by myself, directly, in my own kitchen. I value it for its direct uses, and so it can become mine through the idea of possession. And since I built it from natural resources, without stealing from anybody else in the, who could argue with that?

But if I move on to create a second refrigerator, identical in every respects to the first, well I have no need for that one. This is the idea of marginal utility. It’s the exact same refrigerator, but I don’t value very highly at all, at least for its direct uses. I would only build a second refrigerator IF I had the opportunity to trade it for other things that I want. Would you consider the second refrigerator to be mine, even though I am not personally using it directly? Or is the second refrigerator up-for-grabs, available to anybody to be homesteaded by whoever feels they need a refrigerator, with no compensation due to me?

You said on Facebook that you consider the division of labour to be ‘overrated’. But this is an example where the division of labour leads to more production and more wealth in the world. Being able to specialize in what you’re good at doing, and trading that product for the other things you want, is a beneficial thing. It’s more productive that way. But if I am not considered the legitimate owner of the second refrigerator, I have no incentive to create it in the first place.

If the second refrigerator is considered mine legitimately, then I AM able to accumulate “tons of stuff”, no? So long as the stuff I get is through creating value in the world. There are going to be certain businesses that produce a LOT of stuff with the expectation that they will be able to sell them. And since they produce a lot of stuff, why can’t they own a lot of stuff? Just like my creating the second refrigerator wasn’t at anybody else’s expense.

In fact turning resources into something useful is a benefit to other people, because now people have the opportunity to be able to buy a refrigerator and computer chips, and all other manner of wonderful things. Tons of “stuff” in other words, but all what I consider to be legitimately owned. Ignoring the political favours, do you think a company like Intel, which produces a lot of products (and highly valuable products at that), should not be considered the owner of the chips they produce or of the “tons of stuff” they trade their chips for? You can make an argument from their political favours sure. Nobody is in favour of state-granted privileges like that, but you’re saying that just accumulating stuff is a privilege. Imagining a company like Intel with no political favours, who just exist on the merits of their own computer chips (which I think is perfectly feasible given that their chips ARE valued highly and profitable to produce): can they legitimately own their own product? Do is it not feasible? Will a company like Intel simply not be able to exist, and will computer chips like those not be produced at all? Will we be living in poverty from the lack of division of labour?

Also another thing you said is that the Earth is the common heritage of all people. I personally don’t find this convincing. I don’t consider wilderness to be ‘owned by everybody’, but rather to be ‘unowned by anybody’. You only have to think about it in geographic terms. I live in the UK, and I’ve never even been to Australia or know anybody there. It’s on the other side of the globe. Why would I have any stake in the ownership of wilderness over there? Does somebody who decides to cut down trees, clear some land, and builds a farm in the wilderness there have to pay rent to me for using some of ‘my’ or ‘the world’s’ property (i.e. Georgism)? Obviously that is absurd, but then how far out does my stake in any amount of wilderness reach? Do I only have common ownership of wilderness in the UK with other British people? Why? That’s arbitrary after all. Well, the UK is an island, so there are some natural borders there, but for somebody living in France it’s not so clear. Does a French man on one side of France have any stake in the wilderness of the other-side of France, simply for having been born within an arbitrary border?

All genuine questions I’d like to know. I’m not trying to be snarky or anything, I’m genuinely interested in your take on it!

Thanks.

I’m in complete agreement w/ you George. Most objections to the model of ownership you outline seem to be related to complex production processes. People are afraid they will disappear without the state to enforce non-possession property. I think that complex production can be rapidly reestablished under a non-coercive social framework. Like defense and legal frameworks, complex production hasn’t taken place outside violence-based social institutions, so people have a hard time imagining what they will look like. I wrote more extensively about this awhile back: http://www.jad-davis.com/wordpress/?p=1014 (title: Limiting the Scope of Violence: Complex Production and “The Roads” in a Consensual Society)

I’ve been interested in a discussion about this for some time now. Like Jeremy, I don’t think it’s discussed enough so thanks for starting one George. Some thoughts and comments…

I’m not clear how you can say that you don’t think a non-aggressive organization will go to the same lengths as the state to protect property. You might be right but doesn’t it all depend upon the market demand? We can’t really predict the lengths at which people might want to use property protection services can we?

I’m not clear as to how you delineate possessions and property. How do you define using something on a “regular” basis? Who would define this? If I don’t ride my bike for 8 months out of a year, is it then open to be homesteaded by someone who will use it daily and all year long?

Also how would you define a “reasonable” amount of land to live on? If I build a house, how much land is “reasonable” to have outside the space the actual house uses? Just enough to walk around it and perhaps be able to perform maintenance of the building that is actually being used? Or would it be defined in some other way like, a quarter acre? And if a quarter acre is valid why isn’t one or two acres?

You also said land (that elusive “reasonable” amount anyway) is a valid possession if used for recreation. So if I have property I fenced in order to be able to use it for recreation, perhaps to ride my bike and snowmobile on a very irregular basis or whatever, then by your own definition this would be valid, even if it’s that proverbial 1000 acres that “no one is consistently using.”

I cannot argue with the idea that just building a fence and then claiming all property inside that fenced area as property as valid. This is probably THE sticking point about property that has been nagging at me for some time now, but maybe it’s just a problem because we are not living in a stateless society.

In a stateless society, it seems that since people will somehow have to directly pay in some manner to protect that property claim, then if there are property claims that are being artificially propped up due to government force, many of those claims would end up dissolving naturally as no one would do anything to help someone protect a large amount of unused land.

This would still seem valid even using the example some other commenter used about claiming a large amount of land simply because someone wanted to conserve it as is. If enough people value that idea, they will likely put their time, money and energy into doing what is necessary to hold onto that claim. But if not, then the claim would somehow dissolve.

This is a tough subject for me to ponder. I look forward to seeing this discussion continue.

So now you went from an anarcho-capitalist, to a possession ownership of land. Not quite anarcho-capitalism. But not quite mutualism either. Mutualism is based on the possession principle, but it is not limited to land. You only want land to uphold the possession principle.

So now you’re something between anarcho-capitalist and mutualist. “Georgist”?

Is George a Georgist? But seriously I think people should have somewhat differing views as I don’t think this is a clear cut issue.

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