Studies in Mutualist Political Economy II: Primitive Accumulation. And Karl Popper.

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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  1. Avatar Pat Cahalan
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    “Wars would be fewer”

    Yeah, I don’t buy that part. Well, they may very well be fewer, but they’d be bigger and the likelihood of someone with a decidedly different view of how things ought to be would likely be the guy coming out on top.

    There’s plenty of reasons to argue for a less centralized social structure, but it’s also (at least historically) evident that centralized organizations produce specialists, and once you scale up to a certain point, a substantial portion of those specialists are warriors and weapons makers, and then the centralized organization gets into throwing its weight around, usually by taking things away from the decentralized neighbors.

    I don’t really have any faith that humanity, as an aggregate, is going to jump en masse into utopia, or that a sufficiently large critical mass of people will ever choose that level of responsible freedom. It’s not just because of socioeconomic factors (although poor and economically immobilized people can be manipulated this way, well-educated and well-off people join crazy ass cults, too).

    I’m fairly certain that our current balance is way off, granted, but I suspect the tradeoff in stability between centralized structures and decentralized ones isn’t towards either pole.Report

  2. Avatar Francis
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    I’m very far from anything I can remotely call an area of expertise, but …

    The Federal Reserve of the US has a dual role of full employment and low inflation. Back in the 80s when I was in college, these were seen in direct conflict due to the wage-price spiral and the Phillips Curve. And since then the Fed has seemed to be far more concerned about inflation rather than employment.

    But if the Fed is going to raise interest rates and cool off the economy every time it looks like labor is capturing “too much” of the share of GDP, so as to avoid inflation, then capital is going to get it all. As it has, since 1980.

    So, it’s not that I agree or disagree with a labor theory of value. It’s more that it seems this country has a Federal Reserve theory of the wages for labor. This country is enormously wealthier than it was in 1980, and even the poor have TVs, air conditioning and cell phones. But there’s also no dispute that the distribution of gains in GDP are incredibly skewed.

    One final point: as a democratic country, we have passed laws regulating the conduct of employers. They must bear many costs that employers in other countries get to externalize (i.e, pollution), and impose laws that require that a bare minimum share of income go to labor (ie, minimum wage and other benefit laws). Now, since we have decided to have a Fed policy that requires a certain amount of unemployment, it seems to me such laws are only fair. Otherwise low-end wages would violate the 13th Amendment.

    But other countries don’t have the same view. So why shouldn’t we impose taxes / tariffs on imported goods that are manufactured in ways that violate our own laws? Why should manufacturers use the existence of a national boundary to do in Mexico what they couldn’t do just a few miles farther north?Report

  3. Avatar Brett
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    I am strongly tempted to agree, however, that what little we can say about the world Carson envisions is very, very encouraging. Carson seems to imagine a world of small-scale industry and small-scale farming, but one as prosperous or even more than today’s world, at least as regards the genuine material needs of human beings. Wealth would be more evenly distributed. More production would likely be local. People would likely work shorter hours. More people would be their own bosses. Wars would be fewer.

    I don’t see it. A lot of the prosperity and productivity that we take for granted – and which allows us to work as little as we already do – arises from the economies-of-scale and organization in a large, industrialized country.

    Think of your yeoman farmer, for example. Does he want a steel plow? He’d better hope there’s someone willing to make it at a reasonable price, transport the steel to make it, spend the time training to make it, mine the iron ore for it – the list goes on.

    I don’t buy the “fewer wars”, either. Particularly since the first state to consolidate in this environment to greater military and industrial effectiveness would be at an immense advantage, and able to take advantage of the localized, disorganized neighbors.Report

    • Avatar Jason Kuznicki in reply to Brett
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      says:

      @Brett,

      On the size of firms, it’s certainly possible that Carson is overstating the effect of the force he identifies. Still, I’d support efforts to curb rent seeking behavior regardless of whether or not it meant smaller firms.

      On wars, you might be right as well. But I’d be willing to find out.Report

  4. Avatar Simon K
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    says:

    I also don’t understand the absentee landlord thing. I think the goal is to prevent the monopolization of land, but since land is inseperable from its improvements, it also denies people protection for the product of their labor. If I build a house and need to move to a bigger one, apparently I have to give it away? It undermines the point of mutualism as I understand it. Mind you, there have been cases in Peru where granting people in favellas property rights to their land has backfired since they’ve then turned into absentee landlords and moved elsewhere.

    I agree with Brett’s point on economies of scale – I think Carson hugely underestimates the importance of scale in modern agriculture’s ability to feed such a large number of people. He’s in good company there, along with huge numbers of environmental and food activists, but they’re all wrong, sadly.

    I am with Carson on the money thing, though. Private credit money has the huge advantage, from a mutualist standpoint, of allowing any community to create and use their own money to facilitate transactions without having to get approval from banks with state backing.Report

    • Avatar dexter45 in reply to Simon K
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      says:

      @Simon K, Could you give me some of the reasons that the “environmentalal and food activist” are wrong. I am of two minds about large scale farming. The amount of damage that comes from the fertilizer and petrocarbons used on the land and the erosion caused by present day methods comes at a price that the next generation will have to pay. Plus, as a Louisiana man that is watching the dead zone in the Gulf grow yearly, I would like to see some way to keep the fertilizers out of the Gulf. Large scale would not bother me near as much if it was done in a more benign way. I would stop all subsudies to farms over a certain acreage and the owner would have to physically work the land. Having said that, factory farms do feed a lot of people.Report

      • Avatar Francis in reply to dexter45
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        says:

        @dexter45, Actually, your federal government is working (very slowly) on it. Research “EPA Mississippi River TMDL”.

        TMDL stands for Total Maximum Daily Load, or the amount of non-point source discharges allowable to a river system. It’s part of the Clean Water Act, but enforcement has been slow and spotty. (And the Bush admin. didn’t do a damn thing.)Report

      • Avatar Simon K in reply to dexter45
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        says:

        @dexter45, Large scale agriculture is pretty much required to get benefits from machinery and improved seed stock. You need consistent, productive plants to be able to speed up harvesting with machinery, and you then need big fields, for example. Some innovations – eg variations on no-till agriculture – reduced the need for machinery, but still require uniformity. So I don’t see how any form of agriculture capable of feeding billions of people would be able to rely on small producers.

        I’m not endorsing the current state of agriculture in saying this. In particular, a lot of the abuse of the land and excessive use of fertilizer thats causing nasty outflows into the Gulf comes about because corn and fertilizer prices are subsidized so farmers over-use and over-produce. I’d put a stop to that.Report

  5. Avatar Miko
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    says:

    Popper:

    But if these laws are sufficient to explain these effects, then we do not need the labor theory of value at all

    This doesn’t follow at all. Suppose that physicists discover the “theory of everything” tomorrow. Does that imply that they’ll abandon every other theory that they’ve developed, even if the other theory is perfectly good for explaining some particular subset of everything? Or, take a mathematician who proves a theorem from some basic axioms: if the axioms convey the same information, why did she bother with the theorem? Derivative laws are useful for pointing out certain important consequences of the general laws and for simplifying further arguments. The fact that LTV has an argument explaining why it’s true doesn’t make it less useful.

    Carson’s problem with state-run money is, somewhat strangely, the opposite of the Austrians’ problem with it — where the Austrian critique of central banking is that political pressure produces easy money (and credit crises like the one we just saw), Carson seems to think that state-run money is too tight, making it difficult for laborers to accumulate capital.

    Couldn’t both be true? Easy credit to those with connections leads to easy money and credit crises. Hard credit to those who don’t deal directly with the central bank makes it difficult for laborers to raise capital. Last time I checked, the average credit card interest rate was quite a bit above prime.Report

    • Avatar Jason Kuznicki in reply to Miko
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      says:

      As to the labor theory of value being derivative — point granted. But a theory that both explains why the LTV holds in some situations, while also explaining those situations where it doesn’t hold, is surely a better answer to the question of where market prices come from.

      As to the problem with state-run credit, both can’t be true. State-run credit can either be systematically too tight or systematically too loose. It can’t be both. We’re talking about the overall money supply here, not about any one person or class’s access to it.Report

      • Avatar Marja Erwin in reply to Jason Kuznicki
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        says:

        @Jason Kuznicki,

        It can be systematically too corrupt. The politically powerful have access other people do not; inflation occurs unevenly, and some parties can use the money before he prices adjust.

        Anyway, Carson favors more competition among institutions offering secured credit, and bundles-of-goods standards alongside metallic ones. Not inflationary credit.Report

      • Avatar quasibill in reply to Jason Kuznicki
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        says:

        @Jason Kuznicki,

        That’s a bit too simplistic, re: credit. Cantillon effects should not be ignored, and I think they’re generally given short shrift by those who do happen explicate them. I think much of the observed “malinvestment” of the ABCT is a direct result of the disproportionate access to credit moreso than merely “easy” credit systematically. The knowledge of those first to the trough is obviously as limited as the knowledge of any individual in the market. Accordingly, even ignoring corruption, graft, etc., concentrating the benefits of easy credit to a small subset of the population is very much akin to giving that small subset central planning power. Except that it is probably even worse, as there isn’t a need for even rhetorical obeisance to the “public good” in spending the money they derive from the public spigot.Report

  6. Avatar Kevin Carson
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    says:

    Thanks, Jason.

    I agree that the LTV is not crucial to a free market theory of exploitation. One can argue, on an a prioristic/axiomatic basis analogous to the Austrians, that the direction of state intervention is toward labor receiving less of its product (however that is defined), in favor of rents on artificial scarcity.

    I don’t really have time for an extended debate on the whole empirical question of the alleged efficiencies of large scale. But it’s something I covered in detail in the first three chapters of Organization Theory (available online here: http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html ) and in The Homebrew Industrial Revolution (here: http://homebrewindustrialrevolution.wordpress.com/ ). Suffice it to say that most of these alleged economies are achieved at the point of production, and involve creating imbalances between the scale of production and consumption that result in all sorts of diseconomies of transportation, distribution, warehousing, etc. I agree with the lean theorists that the most efficient form of production is one that scales machinery to production flow (even if the smaller machinery makes that stage of production “less efficient” taken in isolation), scales production flow to demand, and sites production as close as possible to the point of consumption. Most of the godawful inefficiencies of bloated inventory, high-pressure marketing, brand-name markups, and landfills crammed with planned obsolete discards — not to mention the boom-bust cycle and problems of excess capacity — result from “efficient” production that’s out of sync with demand.

    Re absentee landlordism, I’d say my position has become more nuanced since I wrote MPE. By way of eirenic possibilities, let’s just say that implementing the stuff I agree with the no-Proviso Lockeans on (i.e., ceasing to enforce title to vacant and unimproved land, and current rents stemming from grant of such title) would probably go a majority of the way toward eliminating unjust monopoly rents.
    http://mutualist.blogspot.com/2006/06/there-he-goes-again.html
    http://mutualist.blogspot.com/2006/06/george-reismans-double-standard.htmlReport

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