Capitalism and Socialism: A Repudiation

Both capitalism and socialism are systems of control, controlled by powerful elites who rely on expropriation and corrupt political power. To be a libertarian, I can’t seriously support either system as they are reliant on centralising structures. In the case of capitalism, it is a liquid state controlled by large bureaucracies and multinational corporations that use rigged markets to peddle oppression and provide minimal choice, making individuals into mindless consumers. With socialism, there are also large bureaucracies. However the state doesn’t pretend to be minimal, taking control of the means of production and creating a political class of yes-men and busybodies. Neither system allows for autonomous individuals or free markets, where the concepts of choice and power are in the hands of individuals and communities. For this to occur, radical freed markets need to be the norm, with the ability of collective action and democratic control not being restricted in any way. By doing this, the current power structures would lose their importance and with it their control. Everyone needs to lose faith in the current statist systems, whether they be capitalism or socialism.

Class divisions are sown and power is centralised within any state-based system. This is the case with capitalism and socialism. As Hayek noted, the state has a knowledge problem in economic structures, as it cannot possibly record or understand all the forms of knowledge found within an economy. Thus, to get around this, state’s centralise economic power through a multitude of means. In early capitalism, this was done through enclosures and the de facto nationalisation of land in many Western countries, particularly England and Scotland. This has remained the norm in relation to land in most of the modern neoliberal world. However modern capitalism has taken on much more liquid forms of control through licensure, specific market regulation and subsidisation. This also explains the development of massive corporate power that burgeoned in the late 20th century, as corporations rely on these state arrangements to maintain their dominant market positions. Other implicit effects include intellectual property, with the dissemination and innovation of ideas and products locked up by economic elites who can extract rent. Then there’s the case of enforced wage slavery via sweatshop labour. Socialism as an economic system also relies on centralisation, with the state effectively owning most of the productive forces of an economy. This was seen in socialist states such as the Soviet Union and Maoist China. Because choice was controlled and individuals were regulated, we saw crushing poverty and dire forms of economic slavery. There was regularly a shortage of necessary goods, as the economy was based around arbitrary planning rather than the law of supply and demand. Both systems also share a centralisation in credit, either relying on a pure state-controlled scheme (socialism) or on an independent central bank (capitalism) which empirically has seen a huge rise in the cost-of-living in the past 40 years and has been anything but stable. Political freedom has also been restricted in both systems, most obviously in socialist countries where most basic civil liberties are in effect outlawed. Democracy within either system is farcical, with democratic power being in the hands of bureaucratic and economic elites.

Libertarianism as a political philosophy needs to advocate a post-statist order that moves away from capitalism and socialism, systems that are two sides of the same coin. I believe this new system would involve freed markets, where individuals can act collectively/communally and democratic organisation plays a key role. This means the unlocking of land and a recognition of historical land rights, such as the commons. It means an end to all state-control in an economy, including regulation, entry barriers, intellectual property and the control of credit creation. Modern free-market anarchists such as Carson and Chartier give a framework for this kind of society. It would involve a massive decentralisation of political and economic power, with governance becoming voluntary and markets being based on cooperation, not on pillaging and expropriation. There are other economic systems that can play a role in this post-statist order, such as the sharing economy and the modern commons. These systems end the artificial scarcity found in capitalism and allow for the free dissemination of ideas and production. The modern commons would end the producer-consumer distinction, changing the whole idea of work, moving towards a more Marxian system where the pursuit of interests and ideas is more important than the drudgery of modern wage labour. This could be further facilitated by a universal basic income funded via the accumulation of community capital by a community, instead of its expropriation via states and corporations. A UBI would give real economic freedom to individuals as they could become self-reliant and confident in their societal position. Real free markets are developed, where choice is left in the hands of the labourer, not the manager. It could allow for self-employment, worker-run industries, household production and the freeing of labour from capital, smashing the state-corporate nexus that relies on the confiscation of the workers value added. As a result, new wage systems are developed not purely based on marginal product, but also labour value or time and effort given. Participatory economics, as theorised by Hahnel and Albert, also gives direction to a post-statist world. Their theory of democratic producer and consumer councils to direct the economy, while in its purest form falling foul of the knowledge problem, does show how collective action can work if combined with the idea of freed markets and a Hayekian price system. Specifically, collective action in the sense of democratic councils allows for a combination of economic democracy, where decisions that are collectively placed can be decided on, and the free market. Things like public services and the production and consumption of certain goods in a community can be decided to some extent by radical democracy, so long as prices are dictated by supply and demand on a market. The difference between this and modern libertarian thoughts on market distribution is that this system doesn’t rely on methodological individualism and gives room for communal and democratic decisions on production and consumption. While the original thinkers see it as a form of economic planning, I believe there ideas do work in a market framework. For example the idea of balanced job complexes means genuine workplace equality. This kind of system is compatible with the concept of a free labour market, where collective action isn’t restricted and workers are much more empowered. The concept of collective action means that services generally provided via coercive government is able to be provided democratically for a community through nested councils. This can include things like roads, healthcare or housing. Of course such a concept isn’t truly compatible with all goods provided due to the knowledge problem, thus markets are a necessary part of society as they provide a price system that allows for community or individual demand to be met.

A post-statist system would mean an end to the current restrictions of political and economic freedom found in capitalism and socialism. It would allow for collective action in freed markets, the end of the regulatory state, the denationalisation and even democratisation of money, radical trade unionism, the development of alternative production and trade systems and the effective end of capitalist and socialist systems of control. This system is anarchic, with institutions being voluntary and individuals choosing their lot in life without the restrictions the state places upon them. This is radical democracy and true economic freedom.

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