This is going to be hard to judge given the near non-existence of this utopian idea. However there are some sources to draw from to put together a list of accomplishments that have been achieved. Of course there will be some problems with this as many in the stateless capitalist community say that such a nation has never existed, and therefore there is nothing that has been accomplished and nothing that can be criticized.
If this is true that a stateless capitalist society has never existed, then any supporter of such a system would be forced to admit that they have nothing but theory. And as such all their posturing of knowing better than everyone else must be taken for what it is: Merely the rantings of a “theorist” who has no concrete experience in reality.
However this is not the case, we can extrapolate some experience from the semi existence of stateless capitalism in the United States. More importantly we can analyze the results of stateless capitalism’s effects on the African nation of Somalia.
Here I will be critiquing the beliefs of stateless capitalists. I will also be looking at the effects of a lack of regulation. One final note, I will be using the terms stateless capitalist, far-right libertarian and Anarcho-capitalist interchangeably.
We begin this critique with an analysis of the money system proposed by stateless capitalists. We know that without a form of money we can have no capitalism in any form. However it is not simply a case of just having money. Money is an unstable commodity in itself; it has a contradictory function in society. Both as a measure of value and as a method of lubricating the exchange of commodities. We can’t exchange shoes for houses, so we determine a money value and exchange the shoes for money, and then exchange the money for a house. Without this lubrication of exchange, this money as a means exchange, we would be on a completely ineffective barter system. As a result, we would have no capitalism.
Now that we have an understanding of why and how money functions in a capitalist society, we now move on to where money comes from. Enter the Federal Reserve and its satanic alien reptile board of directors.
Much of the hatred thrown at the Federal Reserve is completely taken out of the context of its actual function and position in society. People like Ron Paul and Alex Jones are very quick to throw criticisms at the Federal Reserve, but lack seemingly even a basic understanding of how much power (rather how little) it actually has.
While it is true that the Federal Reserve does in fact print the money that the banks and society uses, you as a stateless capitalist also knows that the privately owned banks also create their own money through book keeping entry, out of thin air as you say. This is true; I’m not denying this at all. The job of the Federal Reserve is to safe guard the value of the money by having some form of power over the money. That power over money mainly takes two forms: the money supply an interest rates.
As just about everyone knows, if you have more money in circulation than you have demand for goods and services, you have inflation. You as a stateless capitalist are already familiar with inflation and its effects on society. This was just for review’s sake for anyone who didn’t know. One of the jobs of the Federal Reserve is to control this inflation by determining how much money is in the money system. We’re all familiar with Zeitgeist how it showed that there has been a 94% devaluation of currency in 96 years.
But exactly how is the Federal Reserve supposed to regulate the money supply if banks are creating their own money through loans? How is the Federal Reserve supposed to control the money supply when it comes from cheap foreign credit? It can’t and that’s the point. The Federal Reserve doesn’t really have that much power over the money system at all. It really only has power over about maybe a third of all money in the system. This money created through domestic and foreign loans are not regulated. So in a stateless society, exactly how is no regulation whatsoever supposed to make this work? Banks will just keep creating more loans because it’s the only way they make money. Why would they regulate the loans they make? They would just be working against their own profit motive. And this working against the profit motive would defeat the purpose of capitalism.
The other form of power held by the Federal Reserve is the power to control interest rates. Unlike “regulating” the money supply, this is a very real power actually held by the central bank. It is required for the regulation of interest rates that you have a central bank.
Interest rates work like this; you have two kinds of capitalists; productive capitalists who produce commodities and financial capitalists who loan money. Capitalism requires both sets of capitalists to exist in order for it to function. When a productive capitalist wants to start a manufacturing firm or begin a new manufacturing cycle, he’ll borrow money from a financial capitalist. This loan will be made with interest which is how the financial institution makes money.
The bank wants the interest rate to be as high as possible so as to make the most money possible from the loan. However, the productive capitalist wants the interest rate to be as low as possible so as to give as little of his surplus-value (his profit) as possible in paying back the loan. This takes on the form of a struggle between two sets of capitalists. In the concrete, a bank’s interest rates must be high enough to generate a profit, but low enough so as not to choke off the profits of the productive capitalist.
This is why so often you hear someone in some magazine or on television saying that interest rates are too high, (discouraging people from investing in production), and then someone saying that it is too low (discouraging banks from lending money). It is absolutely necessary to have some form of regulation to keep these two groups from going to war.
The far-right libertarian position is that the banks will always lower their rates compared to other banks because they are competing for loans. However this is not true and proven so by the financial collapse of 2008. Banks and other financial institutions gave out tons of sub-prime loans both in manufacturing and mortgages. This created credit bubbles that collapsed and ruined credit. The fact is they keep creating (and are still creating) bubbles shows that it will take regulation to keep another credit collapse. Unfortunately as I stated, the Federal Reserve can’t control how many loans or how large they give out.
Often the argument given to stabilize a currency is that we should return to the gold standard. However this would be rejected by independent banks without a central bank watching over. A stateless capitalist economy would not defeat inflation this way. Any bank could then just collect as much gold as they wanted and just create as many loans as they wanted. And they would just keep putting them out because they’ll make more money that way. Each bank would do the same thing and there would be no regulation of the currency creating inflation again.
A far-right libertarian-style bank would also not thrive off this environment. The cost of collecting gold in the first place to be greater than the amount of money you would be able to loan out. A gold standard really doesn’t mean anything.
I would like to point out that this is not the case with a central bank in a socialist country. In the case of Cuba there is only one bank, the central bank of Cuba. Because there is only one bank and new money cannot be created in another bank, inflation is relatively in control. These credit bubbles that were created by the capitalist profit-motive do not exist in Cuba.
However if anyone has actually looked into this, they’ll notice Cuba’s inflation is high. This is due to a promise made by the Cuban government at the end of the Soviet Union, their biggest trading partner. Castro made a public statement saying that no matter how bad things got during the “special period” they would be no interruption in medical and education services. The inflation was caused by a lack of trade due to the blockage against them. This problem wouldn’t have existed if it was not for the vindictive, petty bulling tactic by the US government.
1776 MATERIAL LIVING CONDITIONS
Much of the stateless capitalist ideology is based on concrete material living conditions that did not exist in the time when the Wealth of Nations was written. The advent of electricity and the modern need for electricity alone debunks the most basic premise of stateless capitalism. One cannot live in good health without electricity, this would negate air conditioning, heating, refrigerated food and many other necessities. One cannot simply create his own energy; this requires a collective effort to produce. Since one cannot create their own, the must submit to employment in order to be able to pay for it. What does this have to do stateless capitalism? Well these concrete material living conditions shape not only the world we live in, but also the society we have and shapes the economic system we have and the forms of social and commodity relationships that we have with each other. It takes an investigation of our concrete material conditions and our economic relationships with each other to understand why we live in the type of society we do, and to understand that society.
The reality of 1776 was that 85% of the population lived off the land in agrarian collectives. These were subsistence collectives, where they only produced enough food to sustain themselves. Sometimes there would be enough left to take to a market or something, but really that was kept in case of food shortage emergencies. These people didn’t live off commodities made by other people. In 1776 commodities relations were voluntary because you literally could choose not to purchase commodities and live that way.
Today we have no such choice in purchasing commodities. We live in, eat and work in commodities. Commodity relations are not voluntary. Adequate living standards, proper medical care, vaccinations from disease and food all come from the purchase of commodities. These are not things that one can produce on their own. People have to submit to employment in order to purchase these things. If we have to purchase these things in order to survive, it’s not exactly voluntary now is it. Living standards 234 years ago are not same as they are now. Adam Smith and the Founding Fathers wrote about the living conditions, the concrete material existence of 1776.
This is absolutely not the case today. There was this event that supporters of stateless capitalism constantly pretend didn’t change anything, and that was the industrial revolution.
We don’t have a choice in the purchasing of commodities, we have to purchase them. Thus the person who own the means of production, (the person who owns the factory), owns the social product, thus holding all the power. How can you speak of democracy or freedom when they hoard all the power? If we can’t get away from consuming commodities (and thus submitting to employment in order to purchase them), how can we say commodity relations are voluntary?
Since we are dependent on and therefore permanently tied to commodities, the only democracy that can exist is the democratization of commodity production. Democratizing what makes us continue to live is the only rational solution.
Often this form of free exchange is seen as a freedom. But this is a freedom realized only by the person who owns the means of production. This freedom is not experienced by those who actually create these commodities. They are still made subject to the whims of the capitalist. Sure this is freedom for the capitalist, but not the worker.
Often the far right libertarian who advocates this idea doesn’t seem to understand that this would only create freedom for the owner, which they are not. They seem to function under the premise that they are all going to be the owner, because that’s the way they act, which they won’t be. Operating under this premise is just absolutely farcical.
It seems the libertarian idea of freedom, is freedom only for those who own the means of production, those who own private property… just like we have now.
A system of free and voluntary exchange in the market place is a major abstraction from the concrete reality of commodity production and the social order that arises from it. It is the belief that the freedom to sell to anyone and buy from anyone is the so-called “ultimate freedom”, and thus negates any other conception of democracy, freedom or self-determination.
The stateless capitalist system itself has monumental contradictions throughout it. These are not really symptoms of statelessness, but really of capitalism itself. Ultimate freedom causes ultimate problems, because the reality is, when one uses an extreme it brings all the problems that an extreme creates.
To even have a “complete freedom”, one must invariably trample the freedoms of another. It is a contradiction in and of itself. Its seems as though the advocates of a stateless capitalist system are only concerned with their own freedoms regardless of how they affect another’s freedoms. If this is indeed the mindset of the stateless capitalist, then it appears they ARE out to promote their own freedoms while destroying another’s. This drive for freedom over another is not a freedom, but sense of entitlement. A sense of entitlement that promotes more to one individual for even the most lofty of reasons, is a direct assault on freedoms. This sense of entitlement at the cost of another, no longer becomes a driver for freedom, it becomes a drive for fascism.
You are free to pay me whatever you choose. But who are you to tell me what I am supposed to receive? If I want certain products, (because buying and selling is supposedly the only real freedom), then who is a business owner to restrict my pay, restricting my ability to chose what to buy, which restricts my freedom? This idea of “ultimate freedom” creates a paradox that ultimately becomes anti-freedom, thus destroying its original conception of freedom.
This conception that freedom is derived solely from the production, sale and purchase of commodities is inherently a flawed conception that concentrates power into only a few hands. This far-right libertarians say is the problem with the system now with corporations.
An economy of small producers
The economic system, a system of 1776 stateless capitalism, (as advocated by far-right libertarians), is predicated on the actual conditions of capitalism at the time. This means the system is predicated on an economy of entirely small producers.
The problem with this is that capitalism did not stay small producers. Capitalism always concentrates wealth and production into fewer and fewer hands. This is primarily caused not only by competition, but also by the industrial revolution. It seems to the stateless capitalist, the industrial revolution changed nothing.
Of course this actually changed things a great deal. The impact of automation on the production of commodities alone has created the greatest change. Automation created an efficiency race where all producers in a particular industry had to become as efficient as the producer who was in the lead. This necessity to keep up with, or stay ahead of efficiency, effectively has an exclusionary effect on production.
Every advancement in innovation must be met by each producer or they will go out of business because they are undersold by their competitors. Technological advancement creating greater efficiency allows a producer to sell something cheaper than the others. Each producer in return will have to do the same thing in order to compete, creating equilibrium among producers. Then another capitalist will have to innovate again making their product cheaper, beginning the cycle over again. Eventually the rate of profit will become so low from competition that only 3 or 4 producers will be able to actually make money excluding all other from the industry. Just like the auto industry today with only a few automobile manufactures.
Basing a post-industrial revolution model of capitalism on a pre-industrial revolution ideal is a huge contradiction. And that is only one example how “Adam Smith capitalism” has changed since the industrial revolution. If we still made all commodities with hammers, forges and basic human labour, this would not be a problem. But that is not the way it is, and has not been since the industrial revolution.
Just as an aside, in order to make this system of small producers work, you would need some kind of regulatory body in order to keep a business small. Oh and you would also need a body of armed individuals to enforce this. But you can’t tell someone not to expand production or automate production killing competition. It is their private property and they can do whatever they want with it. In order to keep an economy of small producers, you would have to violate the freedom of production, thus negating the very principal stateless capitalists stand for.
Commodity Production and Happiness
Stateless capitalists, well really all capitalists in general, are under the impression that commodity production creates happiness. The production of consumer goods creates happiness. Well, that’s not true at all. Commodity production does not create happiness on any level. Our desires cannot really be met merely by consuming things. After the initial excitement of buying a new product, how does consuming cell phones and tennis shoes actually move us towards a realization of any meaningful desire?
It can’t and that’s the point. The happiness of a human being doesn’t come from running shoes or video games. The real desires desired by human beings are things like sexual gratification, a sense of belonging, spiritual fulfillment, sense of accomplishment and the love of a family. No commodity can do that. No rational person of any level of intelligence could argue otherwise.
However in capitalism, be it stateless or otherwise is predicated on this idea. That is why the advertising industry exists. That’s why billions upon billions are spent trying to get us to purchase these mostly unnecessary products. Beer commercials show average guys surrounded by attractive women having fun. The message received semi-consciously that “drinking our beer makes you attractive to women”. Of course that’s what every woman is attracted to, a drunken ass pincher.
That’s why Tiger Woods and Michael Jordan are trolled out wearing the expensive shoes made by children in the third world. You see these cool rich athletic guys wearing these shoes and you get the idea that you’ll be just like them. And don’t say it doesn’t work because if it didn’t these companies wouldn’t be spending hundreds of millions getting these guys to wear them.
Commodity production doesn’t create happiness. If it did, then why to the advanced industrialized nations with the greatest consumer choice have such high rates of reported unhappiness? Why do we in the First World have the highest suicide rates? Third World peasants who have the most demanding and painful lives have near the lowest? Why is that? Why are Buddhist monks who own nothing at complete peace and happiness?
Economists and capitalists know this. By capitalists I mean actual capitalists, the people who produce things and own factories. To quote “Exchange And Production” by Michael E. Staten:
“An inescapable fact of our existence is that our collective desires and goals exceed our productive ability to satisfy them…. The primary question to be investigated is how a society manages to coordinate the production of goods to satisfy consumer demands. Literally, how does it harness the competitive behaviour of millions of individuals in order to get goods and services produced?”
The only answer is to get people to want them. You have to invent desires; you have to artificially create them. Ironically, economists call this “rationalizing consumption”. It’s ironic because it’s completely irrational. It is irrational to think producing consumer goods creates happiness.
Collectivization of Commodity Production
The stateless capitalist argues that collectivization is a bad thing with all its nasty humanizing side effects. He would much rather say that a person owning a factory is much better because a collectivization of production is fascist because its people working together and that doesn’t allow a single person to take all the profits. So therefore collectivization is bad. Really their argument against collectivization isn’t as vague as I just described it. I just wanted to get through an explanation of it faster.
Except here is the contradiction in their claim that they reject collectivization: they already do and will under a stateless capitalist system continue to do it. No capitalist in the world creates entirely his own commodities, here’s why:
A worker in Malaysia gets a job on a dredger, which is digging out tin ore from the river. After passing through dozens of sets of hands the tin ends up in Taiwan, where it is used to make solder to manufacture a transistor radio. Meanwhile a garment worker in Milan machines a piece of cloth that began life as raw cotton in the field of a peasant in Pakistan. The peasant is very poor. All he has to listen to at night is the transistor radio. He doesn’t know about the workers in Malaysia or the woman in the sweatshop in Taiwan with the electric soldering iron. He doesn’t know about the catwalks in Milan and the illegal immigrant on the outskirts who turned the raw cotton he grew with his own hands into a luxury item.
This example shows how commodity production is already socially generated. A capitalist who makes transistor radios does not own the entire production. No capitalist has a dredger digging out tin ore, and ships it to his own factory to make into solder, and makes into a radio along with all the other plastics and metals. This is done socially through many capitalists. Things are already created socially. It appears socially generated commodities among capitalists is okay, it’s just bad when workers do it. This would be no different under a stateless capitalist system.
Its only fascism when the state does it
Just as an aside to the whole “the state is force” argument. Of course the state is a force, “the state is a body of armed men”, as Karl Marx said. But this “body of armed men” only serves capitalism, and capitalism needs this force in order to even exist. This is the argument that I posed to an Anarcho-capitalist:
Let’s say the far right-wing reactionaries succeed in their goals and are able to create a society in a state or region where there’s no taxes, hardly any real government, no public services, no state police, no gun laws, and no business regulations whatsoever; however, the region is supposedly capitalist and profit-driven. You are a business owner running a very labour-intensive business and have hired 200 workers (wage slaves) to produce your stuff. One day your workers decide they’ve had enough of your abuse and decide to unionize; not only that but they also decide they want to take over the workplace and give you, their boss, the boot so they could run the workplace democratically in a non-hierarchal fashion. And to top it all off, because there’s no gun laws in this area each of those 200 unionized workers is able to bear arms in the workplace, so they will easily be able to fight back if threatened. Now I ask you, if that were the case, and there was no state police or anything to prevent this from happening, how would you stop those workers from taking over your business?
Well stateless capitalists gave the same answer several times:
“I would take the money that I’m no longer paying the workers because they’re threatening to revolt, and use that to hire a private army. I would then order them to kill all of the workers to send them a message, and put them back into fucking line.”
So basically a “body of armed men” is needed to f-ing kill all those workers who didn’t know their place. Now you begin to see why capitalism needs a “body of armed men”. But the stateless capitalist will cry that he needs these “bodyguards” to work for him. Therefore, since it’s not the state, it isn’t fascism anymore. This not so much a contradiction as outright hypocrisy.
Capitalism cannot exist without a powerful state to protect it and never has. Without a state, what would protect business owners’ private property? How would business owners prevent their workers from unionizing and taking over the workplace like in the scenario I mentioned (and please don’t give me that “there’s no need for labour unions in a truly free market society” BS)?
THE RACISM OF LIBERTARIANISM
Consider, for instance, the ramifications of libertarian thought in the medical profession (of which both Rand Paul and his daddy Ron are a part). Under Paul’s conception of justice, and that of John Stossel, doctors working in private practice should be able to discriminate against patients based on race, religion, or for any other reason without limit. Meaning that if a person belongs to a group despised for some reason by the only physician in town–or simply the doctor they unluckily encounter in a life-threatening emergency–their very ability to continue living would take a back seat to the doctor’s “right” to dispose of his or her “property” as he or she saw fit. Though the physician would hopefully come down on the side of the Hippocratic Oath, in libertarian-land they wouldn’t have to. And if they decided to indulge their biases, well, too bad. That the patient could always go searching for another doctor who was less bigoted might be nice, and work just fine in the ether of textbook based hypotheticals. But in the real world–a world that libertarians fail utterly to comprehend even as I’m told they live somewhere within its physical boundaries–such a patient might well die, all so that the free market could remain unimpeded.
Back to the racial issue, to venerate the property rights of business owners, say, in the era of segregation–and thus to claim that it was inappropriate for the state to force them to serve blacks, or hire them, no matter how morally offensive racism may be–is to ignore that the accumulation of their property in the first place was in large measure due to having been protected by the state from competition all those years. If the government has consistently intervened, not only against people of color via state-sponsored racism, but in favour of whites via the same process, then the property over which white business owners came to have control (and which libertarians view as sacrosanct) was ill-gotten gain. To suggest the state, which was implicated in the unjust accumulation of that property by whites in the first place, now has no right to force compliance with public laws intended to provide equity of opportunity and access is perverse. It suggests that businesses can be subsidized by the state but not regulated by it, that individuals can reap the unearned benefits of state action but not be expected to bear any of the costs.
To bow to the private property rights of whites under segregation would have been to capitulate to the existing distribution of stuff at that time, which distribution had come about not in a free market, such that the distribution could be said to have been fair (under market principles), but rather, as a result of government intervention. It would have meant accepting government intervention of the first order (on behalf of whites), but then saying, after the fact, that there could be no corrective intervention on behalf of those deliberately oppressed. Not to mention, those stores and restaurants that were segregated received shipments of goods on trucks subsidized by highway construction, especially after the creation of the interstate system under President Eisenhower. Shipment of goods on these government-built roads and interstates brought down the cost of those goods (and thus boosted profits for those businesses) relative to what their cost would have been had each store owner had to have his own truck, and pay privately for the roads that would bring him his products.
Even today, private businesses all receive indirect if not direct subsidies from government, such that there is no truly “private” enterprise. Unlike a private club, a business that engages in commerce is receiving any number of public benefits from government policy, and thus, to suggest the owners of said property should have the unimpeded right to do as they please is morally absurd.
Bottom line: Only someone who has never personally felt the dehumanizing sting of racial oppression could have such a childlike faith in the ability of the market to solve the problem of racism, or the adequacy of simple private boycotts to force racist business owners to change their ways. And only someone who has never had their fundamental dignity and worth questioned as a result of their skin color could suggest patience as a solution to that maltreatment. As in, the kind of patience required for markets to correct, even in theory, any number of social maladies.
With the exception of Thomas Sowell and Walter Williams, this is why you’ll find nary a black libertarian of any note on the scene today. Most all folks of color know that the indignity of being denied service, denied the ability to try on clothes in a white owned store, or denied a job because of the color of your skin, is simply too high a price to pay so as to uphold the property rights of moral ingrates. To claim that persons who have had their dignity assaulted in this way should content themselves with shopping elsewhere is to minimize the injury to the point of obscenity; it is to make a moral issue no more important than the impetus for comparison shopping, as if one should respond to racist mistreatment the same way one would respond to a store charging ten percent more than you wanted to pay for a blouse.
But not being allowed to use a restroom and then pissing on yourself as a result, or being served food only out of the back door, is considerably different than arriving at the Macy’s, only to realize that they are charging $30 more for a pair of jeans than JC Penny’s. In the latter case, it is no great burden to turn around, leave the Macy’s and give your business to the bargain store. In the case of the former, the psychological and even physical effects of the unjust treatment run deep. And the fact that there are persons like Rand Paul and John Stossel who refuse to see the difference–or if they do, refuse to think it worthy of correction by the collective will of the people, embodied by the state–should serve as a not-so-subtle reminder about the banality of evil and just how cavalier white people can often be about the harms meted out over the years to our brothers and sisters of color.
And here’s the really important visual to consider: to suggest that those property owners were right to say they “shouldn’t have to serve” blacks, and that their property rights were more important than the right of all people to be treated like human beings, is to side with the white thugs who surrounded those brave young men and women–black and white–who had sat down on lunch counter stools and refused to move. It is to side with the mob as they screamed hateful epithets in the direction of Diane Nash (whose name I’d bet Rand Paul has never even heard, let alone her story), and John Lewis, and Bernard Lafayette, and Paul La Prad, in Nashville, among others. It is to say that those racist goons were on the right side, philosophically at least. That they were the ones with a better understanding of what America was supposed to be about, rather than those dignified and courageous souls whom they attacked. That they were the patriots who truly loved their country and had a deep appreciation for the Constitution. It is to side with the cops as they dragged peaceful demonstrators from lunch counters, because after all, the latter were trespassing on “private property.”
Think about that. And then think about how perverse it is that exactly fifty years after those sit-ins took place–sit-ins that must rank among the greatest endeavours for freedom in the history of this or any other nation–we still have among us people like Rand Paul and John Stossel who don’t get it.
Racism in hiring and employment
When it comes to employment discrimination in the private sector, libertarian thought is hardly persuasive. According to pure market theory, employers who discriminate will eventually lose money and thus change their ways. Why? Because to hire people for a merit-arbitrary reason such as color is to, almost by definition, overlook more talented possible employees. So when one’s competitors who are less racist hire the folks overlooked by the bigot, they will reap the benefits that come from hiring the more qualified workers, and eventually the racist will either get with the program or go out of business. But the flaws inherent to this set of arguments are legion.
First, the idea that people automatically respond to their rational material interest is not true. So even if the libertarian argument were correct in the abstract–that racism is ultimately bad for business–this wouldn’t necessarily alter racist behaviour. After all, the whole history of racism in the United States has been a history in which white workers, for instance, regularly overlooked their absolute economic interest for the sake of furthering their perceived relative and racial interests. The labour movement would have been far better off had they not engaged in rampant discrimination against workers of color: wages would have likely been higher, as with benefits, and white workers wouldn’t have had to worry about the boss replacing them with black or Asian workers when they went out on strike (because the folks of color would have been on the picket line too). But in spite of their material interests as workers, they elevated racial bonding above those interests, opting for what W.E.B. DuBois called the “psychological wage” of whiteness: one that substitutes a sense of group superiority for actual tangible goods and income. If white labor has historically overlooked its self interest for the sake of racial bonding, why would anyone assume that owners might not do the same thing?
Second, the argument that discriminating employers will be taught a lesson if they overlook better qualified people of color presumes that the employer has access to the necessary information to come to that conclusion and then change his or her ways. And simply put, in very few cases would such corrective-after-the-fact information obtain. Think about it: If a black person applies for work with an insurance company, and the owner of the company, or the manager refuses to hire that person because of racism, what is the spurned applicant likely to do? Well, he or she might apply for work with a direct competitor of the racist company, and he or she might be hired by the second firm, thanks to that firm having a more open minded hiring policy. But so too, the black person rejected at the first company might seek employment in a totally different industry, in a different part of town, where their future performance with whatever company ultimately hired them would never come to the attention of the racist insurance manager. Without being able to literally see the performance of the person they passed up, there is no way, even theoretically, that the racist could be “taught a lesson” about the unprofitability of discrimination.
In fact, even if the spurned applicant did get a job with the direct competitor of the racist company–so that at least theoretically, his or her performance in the market might be something the racist would learn about, if only by virtue of the competitor proceeding to outperform the racist–in practice, there is very little reason to think that it would make much difference. To begin with, the marginal gaps in productivity between most workers in a given occupational strata are relatively small. In the instant case, for example, there is only so much “better” that one insurance adjuster is likely to be, relative to another. Even more so for less skilled positions.
So even if the spurned black applicant were to go to the competitor down the block and do a better job for that company than the white person who was hired by the first company was able to do, would the difference likely be large enough to stand out? And to make the first employer realize the error of his or her ways? Considering all the factors that affect private profits–of which labour productivity is only one, and typically not the most important–it is unlikely that racists would be taught anything in this process. This is especially true given that racists typically will go to great lengths to justify their biases, and thus, resist any information that might lead them to conclude they were wrong. Studies have found that even when people of color perform equally to their white counterparts, or apply for jobs with more qualifications than whites, employers regularly prefer the less qualified whites anyway. So either employers aren’t very good at spotting merit, or they are willing to indulge their biases despite the potential costs.
One study in particular makes this point blindingly clear. Conducted in the late 90s by legal scholars Alfred and Ruth Blumrosen, the study looked at specific industries in specific locales and compared how companies within those industries and locales did in terms of their openness to hiring people of color and women of all colors. The study’s authors looked at tens of thousands of businesses. They determined what the average level of employee representation was for blacks, Latinos, Asians and women (as women), in each industry and locale. So, for instance, they might be able to ascertain from the data that in Houston, in the construction industry, African Americans were approximately ten percent of the workforce on average. They assumed for the sake of argument that whatever the local industry average was, was itself fair, and not reflective of discrimination (even though, arguably, there could be industry-wide discrimination in an area and field that drives down the averages across the board). Starting with that somewhat conservative assumption, they then looked to see if any firms were substantially below the local industry average, the argument being that if most firms are able to find, say, 10 percent black employees, most any firm in the industry in that town should be able to come pretty close to that norm. If a firm, on the other hand, only had, say, 5 percent or 2 percent black employee representation, that would suggest that something was likely wrong.
After carefully evaluating the evidence, the Blumrosens were able to conclude that while most businesses did not engage in demonstrable racial discrimination, about a third of all firms did. Indeed, over a million people of color and women of all colors were estimated by the study to experience job discrimination each year. And this was true in spite of the fact that these discriminating firms were operating in environments where some of their direct competitors were apparently more equitable in their dealings. Yet the fact that others were hiring more equitably was not causing the racists or sexists to go out of business.
CONSEQUENCE OF A LACK OF REGULATION
What is probably the most perplexing part of stateless capitalism is its supporter’s desire for a world that did not contain regulation of business or exchange. It’s perplexing because they claim that now the United States economy is socialist. Which is outright wrong, misleading and a lie. To them any state regulation makes it socialism, which itself is basically the most misinformed statement they make.
Apparently the mass accumulation of wealth under the private ownership of production by individuals is socialism to them. Really socialism is all means of production owned and controlled by the state. The economy of the US is entirely capitalist. One wonders where they even get such blatantly ignorant ideas from.
The history of the United States for the past 30 years has been a history of deregulation. The systems that have been set up to protect us from capitalism have been weakened severely in this last generation. What shows that stateless capitalist are indoctrinated is their belief that the opposite has happened in the same period.
Here is a prime example of deregulation:
The goal of NAFTA was to eliminate barriers of trade and investment between the USA, Canada and Mexico. Essentially this was the deregulation of trade between nations. The implementation of NAFTA on January 1, 1994, brought the immediate elimination of tariffs on more than one half of US imports from Mexico and more than one third of US exports to Mexico. Within 10 years of the implementation of the agreement, all US-Mexico tariffs would be eliminated except for some US agricultural exports to Mexico that were to be phased out in 15 years. Most US-Canada trade was already duty free. NAFTA also sought to eliminate non-tariff trade barriers.
Maquiladoras (Mexican factories which take in imported raw materials and produce goods for export) have become the landmark of trade in Mexico. These are plants that moved to this region from the United States, hence the debate over the loss of American jobs. Hufbauer’s (2005) book shows that income in the maquiladora sector has increased 15.5% since the implementation of NAFTA in 1994. Other sectors now benefit from the free trade agreement, and the share of exports from non-border states has increased in the last five years while the share of exports from maquiladora-border states has decreased. This has allowed for the rapid growth of non-border metropolitan areas, such as Toluca, León and Puebla; all three larger in population than Tijuana, Ciudad Juárez, and Reynosa.
This harmed people. An increase in domestic manufacturing output and a proportionally greater domestic investment in manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply reflects greater automation and higher productivity. Although the U.S. total civilian employment may have grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the same time period. Furthermore from 1994 to 2007, net manufacturing employment has declined by 3,654,000, and during this period several other free trade agreements have been concluded or expanded.
How much damage has this deregulation done?
California’s amusement-ride safety law, which took effect Jan. 1, 2000, requires amusement parks to report any serious accidents. According to the state, Walt Disney Co.’s two Anaheim parks and Knott’s Berry Farm led California with the most accidents….
While the U.S. Consumer Product Safety Commission tracks accidents, the agency was stripped of oversight of fixed parks such as Disneyland and Knott’s in 1981. That’s left up to states and the parks themselves. Markey has introduced legislation that would restore the commission’s oversight of permanent amusement rides.
The 1978 Airline Deregulation Act dissolved the CAB and removed most regulation of commercial airlines. Carter also signed into law bills deregulating the railroads and the trucking industry. You could argue that transportation deregulation has been a wash—replacing a system of bureaucratic incompetence with one of profit-seeking negligence, and exchanging safety for lower prices.
The same cannot be said for the deregulation of the energy sector, notably the natural gas and oil industries under Ronald Reagan, and the electric utilities under George H.W. Bush and Bill Clinton. Left to its own devices, a deregulated energy industry has given us Enron and Exxon—California brownouts and $100 barrels of oil. Deregulation of the telecommunications industry, also under Clinton, reduced the number of major phone service providers to just a handful of multimerged giants.
The Depository Institutions Act of 1982, another Reagan initiative, was supposed to “revitalize” the housing industry by freeing up the S&Ls to make more loans. Instead, the regulation rollback led to what economist John Kenneth Galbraith called “the largest and costliest venture in public misfeasance, malfeasance and larceny of all time” as they engaged in a fury of high-risk lending. The collapse that followed cost taxpayers an estimated $150 billion in government bailouts, and contributed to the recession of the early 1990s.
The banking industry objected to regulations put in place in 1989 after the S&L debacle, as well as others dating back to FDR. The heads of the six major U.S. banking associations, according to the National Review, had written “a long letter to the President-elect in December advocating nine substantive reforms.” The conservative magazine concluded that the new president seemed more than willing to oblige, but bank deregulation was being held back by such powerful congressmen as “House Banking Chairman Henry Gonzalez (D., Tex.), a populist throwback to the Thirties who believes bankers are by definition out to exploit the ‘little guy'” and “House Energy and Commerce Chairman John Dingell (D., Mich.), who holds a quasi-religious belief that banks caused the Great Depression and must be tightly regulated. (Dingell’s father was a principal author of the Glass-Steagall Act of 1933.)”
The Glass-Steagall Act was, in fact, a primary target of the Clinton-era deregulation effort. An early piece of New Deal-era legislation, the act was passed in response to speculation and manipulation of the markets by huge banking firms, which most liberal economists believed had brought on the crash of 1929. Glass-Steagall imposed firewalls between commercial banking and investment banking, and between the banking, brokerage, and insurance industries. According to the Center for Responsive Politics, which tracks lobbying and campaign contributions, “Eager to create financial supermarkets that peddle everything from checking accounts to auto insurance, the three industries for years have lobbied Congress to streamline regulatory hurdles that bar such operations.”
Passage of the Financial Services Modernization Act of 1999 was celebrated in a Wall Street Journal editorial as an end to “unfair” restrictions imposed on banks during the Great Depression, under the headline “Finally, 1929 Begins to Fade.” In addition, the merging of commercial and investment banking helped enable high-risk mortgage lending to make its way into the mutual funds and 401Ks of millions of Americans in the form of mortgage-backed securities. “Diversifying bad debt just spreads the poison,” as Frank said in his Boston speech. It also makes a falling housing market reverberate throughout the economy far more than it did even during the S&L collapse. Enter the subprime crisis. And welcome back, 1929.
As these new financial giants go into freefall, a little regulation once again sounds like a good idea, just as it did in 1933. But increased regulation will never come willingly from the Federal Reserve, an “independent entity” that is answerable to no one, and has always operated largely in the interests of the big banks that make up its membership and provide its funding. Under two decades of leadership by the notorious anti-regulator Alan Greenspan, the Fed took a hands-off approach, preferring to set “guidelines” for the financial industry rather than enforce rules. In December 2007, the New York Times compiled a rundown of the multiple warnings and pleas made to Greenspan, over a period of at least seven years, to address the dangers posed by subprime lending—all of them, of course, rebuffed by the man who still claims he couldn’t have predicted that the housing bubble would someday burst. The Fed’s approach is unlikely to change much now—at least, not without a fight.
So we can see quite clearly that massive deregulation has taken place. It’s a mystery how stateless capitalists can possibly think the opposite. Not really, they want to believe that, they need to believe that in order to justify their position which is such an abstraction form the reality of economic life.
What I think these stateless capitalists are missing is perhaps a brief and history, and current events, that display the reality of the consequences of having no regulation. It seems they’ve done no research.
What happens when there is poor or no regulation?
“Food scares have become as common as Midwestern tornadoes,” the New York Times notes in yet another article about the salmonella-tainted peanut butter scandal, which has been competing in recent days with the mercury-tainted high fructose corn syrup scandal, which may have distracted you from the bisphenol A-in-our-bodies scandal, which may soon be surpassed by the phthalates-in-our-bodies scandal…”
“financial conflicts of doctors who conduct clinical trials of drugs and medical devices in human subjects,” because “collecting and checking this information before the trials was not worth the effort for either the companies or the agency.”…
Not worth the effort. Just as it evidently was not worth the effort to act on the mercury in HFCS, or to follow up after learning all the way back in April that Peanut Corp. of America was attempting to ship contaminated peanuts. Oh, and what about the even more toxic methylmercury that our coal-fired power plants spew, which also finds its way into our food chain via fish, among other sources? “Clean coal” may or may not be an oxymoron, but in any case, it doesn’t exist yet; in the meantime, as Treehugger notes, coal-fired power plants “are the largest industrial source of mercury pollution in the country.”…
…The Bush administration presided over–and fostered–the wholesale abdication on the part of these agencies of their duty to protect us.
Failures of Deregulation among the FDA
• User fees. The FDA’s increasing reliance on so-called user fees from drug and medical device companies encourages the agency to treat those companies more like fee-paying customers. Instead of being fully funded by the government, FDA took in $380 million in user fees in the 2006 fiscal year. Former FDA official Janet Woodcock stated that the law authorizing such fees creates a “sweatshop mentality” at the agency’s Centers for Drug Evaluation and Research.
• No Learning from Drug Mistakes. In testimony before the Institute of Medicine, Public Citizen Health Research Group director Sidney M. Wolfe, MD, cited 13 instances of drug approvals which either should not have been approved (including Crestor, Rezulin, and others), or should have been restricted (Accutane and others) or withdrawn (Baycol, Seldane, and others) earlier than they were.
• Tobacco Failures. Five companies illegally market and promote laser treatment for smoking cessation. Public Citizen petitioned the FDA to crack down on those companies, since the FDA hasn’t approved the device and there’s no evidence the treatment works. Consumers who are convinced to pay up to $399 for laser treatment may be diverted from real programs that work, such as nicotine gum or patches—thus fewer smokers will be helped to quit. And, though it had essentially removed nicotine-containing beverages from the market in 2002, those drinks have reappeared. Just this month, NICLite, which the company breathlessly says is the “World’s only Nicotine Replacement Drink!,” and that it is “classified as a Dietary Supplement by the FDA,” began a marketing campaign. According to Wolfe, either the company is lying about the status of these products or the FDA inexplicably reversed itself and declared that they can legally be sold as dietary supplements. Either way, it represents a failure of the FDA to enforce the law of the land.
• Obesity. Over the past three decades, rates of obesity have doubled in young children and adults, and tripled in teenagers. In 2003, then-Commissioner Mark B. McClellan declared FDA’s intention to “confront the obesity epidemic … to help consumers lead healthier lives through better nutrition.” Three years later, according to CSPI, the agency has done essentially nothing. Even with a food that’s a major contributor to obesity—soda—FDA has declined to place health notices on cans and bottles, require added sugars to be listed separately on labels, or to require multi-serving containers to list the number of calories for the whole container.
• Heart Disease. One of the most potent promoters of heart disease is the trans fat in partially hydrogenated oil. Though after a 10-year slog the FDA finally required trans fat to be listed on nutrition labels—spurring some manufacturers to abandon the oil—the FDA has done nothing to get restaurants to disclose or eliminate it. In 2004 CSPI petitioned the agency to ban partially hydrogenated oil and, until such a ban, to require disclosure in restaurants, but the FDA has not acted. The result: thousands of unnecessary premature deaths every year.
• High Blood Pressure. Perhaps the single most harmful substance in the food supply gets zero attention from the FDA—sodium chloride, or salt. CSPI and the American Medical Association want FDA to revoke the “Generally Regarded as Safe” status of salt and to treat it as a food additive, subject to reasonable upper limits in packaged foods. In 2004, the head of the National Heart, Lung, and Blood Institute estimated that cutting the sodium content of the food supply in half would save 150,000 lives per year.
• Fraudulent Labels. Of 11,000 employees, the FDA tasks a grand total of four people at headquarters to police food labels. Thus, supermarket shelves are graced with carrot cake virtually without carrots, fruitless “fruit snacks” made with high fructose corn syrup, “whole wheat” products with a lot of white flour, and so on. CSPI says the most significant FDA labelling initiative in recent years was an industry-written initiative to let manufacturers place misleading “qualified health claims” on food labels. FDA’s own research found that the program confused consumers, but the program, championed by food companies, continues.
• Food Safety. Faced with the emergence of dangerous chemicals (such as mercury or acrylamide) in food, the FDA takes years before acting—and even then, its response is typically tepid. Faced with outbreaks of bacterial pathogens in food, FDA is similarly nonresponsive: Salmonella in eggs could be all but eliminated with finalized on-farm regulations to control the hazard, but those have been delayed for years. Shellfish contaminated with deadly Vibrio vulnificus kill 20 or so people every summer, but FDA relies on an industry-funded partnership with state governments to ensure shellfish safety.
• Industry Capture. The FDA often relies on advisory committees made up of outside experts to offer science-based advice, particularly on approvals of drugs and medical devices. But those panels often include—and are sometimes dominated by—scientists or researchers who have direct financial relationships with the companies whose products are under scrutiny. In recent years, FDA advisory committees evaluating antihypertensives, various diabetes drugs, and the pediatric use of anti-depressants, have all included industry-funded scientists. On one committee, 10 of 32 panelists investigating the controversial painkillers known as COX-2 inhibitors, including Vioxx, had ties to the makers of those drugs.
Free Market Insurance
Free market libertarians say, make insurance more competitive by allowing people to purchase policies across state lines. Libertarians love this idea. Indeed, there are significant differences in the costs of policies from state to state. So, let’s let people in a high-cost state, such as New York, purchase policies in low-cost states, such as Kentucky. This would create more competition, causing costs to drop all over. Wouldn’t it?
Last year the Chicago Tribune’s Judith Graham interviewed Sandy Praeger, president of the National Association of Insurance Commissioners, how this would work in the real world.
“Insurers will set up shop in states with few regulations and market low-cost policies to people across the country. These policies will offer minimal coverage and appeal primarily to younger consumers.”
“It will be a race to the bottom,” Praeger said, and there will be “very few consumer protections. … You’ll have plans that don’t cover the benefits that people need…And healthy people are going to buy those less costly plans, because they don’t think they need [the protection].” …
“…The policies that sell comprehensive coverage would draw a sicker, older customer base, becoming more and more expensive.”
So, we see that the idea about purchasing policies across state lines is a ruse to separate people into low-risk and high-risk pools. Older people, people with existing health problems, would be left in the more expensive high-risk pool while younger and healthier people, the low-risk pool, could be sold cheaper insurance. Well, as long as they remain younger and healthier, anyway.
There is another pitfall, which is that part of the difference in cost from one state to another has nothing to do with regulations and everything to do with cost-of-living differences. Office space is a lot more expensive in the greater New York City area than in Kentucky, and the New York City doctor is going to have more overhead even without the regulations. Therefore, he has to charge more for his services. The idea that health-care costs can be equalized across the country, so that a Kentucky insurance company will reimburse you for New York health care costs, is nonsense.
THE TRUTH BEHIND THE STATELESS CAPITALIST MOVEMENT
It seems in my analysis that the stateless capitalist movement really only serves one purpose; to create a phoney perception that a majority of Americans want a deregulation of everything. Which is not true, people don’t want it at all. The average person does not want to get rid of the minimum wage. Usually because they’ve probably had to live off of it and know how difficult that is. The thought of surviving off of less is quite frightening.
People don’t want less protection; they don’t want less access to medical care and education. People want protection and security, it’s human nature as you so adamantly declare. This is a false perception that is being perpetuated by stateless capitalists and Ron Paul and others of their type. This goes completely against the actual desires that are inherent to all human beings.
So that leaves us with the fundamental question? What’s the point of creating this movement to begin with?
It’s simple, to push forward deregulation. Deregulation won’t magically take away the power of corporations. This so-called “movement” won’t succeed in ending the state. If for some reason politicians are successful in convincing Americans that this is the right path, they won’t end the state. They won’t shut down corporations. All politicians are in the back pocket of these corporations who fund their campaigns. All their going to actually do is end everything that protects us from what they do. Ron Paul won’t end anything. Politicians never do, only ever people create change.
“The people, and the people alone, are the motive force in the making of world history.” – Mao Tse-tung, April 24, 1945
Ron Paul is still funded by the same corporations that fund all politicians. They wouldn’t be giving him money if he really intended to destroy their power. And besides, Ron Paul is a Republican, and the Republican Party is funded by corporations. He wouldn’t even be in the party if he really challenged corporate power.
All the ruling elite are going to do is take the artificially created perception that people want deregulation and use it to make it easier for corporations to make money. This won’t end anything stateless capitalists are against.
With this in mind we can expose the real motivation behind the so-called movement. This stateless capitalist movement was created by the ruling class capitalists to protect themselves from anti-capitalists. It’s pretty simple really.
During every recession, like the one we’re in, the capitalists always pump out the Ayn Rand novels to push people toward a system that is in crisis. People tend to turn away from something that keeps breaking down. Now is no different than before.
The global economic recession has devastated the world in a way that was completely predicted by the actual Left (which means not the fake left of the Democrats). This recession has turned people away from capitalists towards socialism. This doesn’t make rich people rich, so they have to do something about this counter-culture that arises from anger towards a failed capitalist system.
What better way to control the culture that is in rebellion against the system than creating it themselves? Corporations and their lackeys like Ron Paul and others artificially create a movement against capitalism while preserving capitalism itself. Instead of telling the truth: “capitalism is fail”, instead you create a counter wave that says, “it didn’t fail, something caused it to fail.”
This is nothing more than a defence mechanism of the capitalist ruling class. This is a pressure release valve that keeps the pressure against capitalism from boiling over.
You, in your pursuit of taking down corporations are really just preserving them. Really, the stateless capitalist movement is really just a tool of corporations to protect themselves.
I have to ask you a serious question. With all the deregulations Obama has made, with all the new power that he’s given corporations… Where were you when George Bush was doing all of this? When he was handing the entire country over to the corporations, where were your criticisms? You were standing by his side cheering him on.
For all Obama has done to kill people’s civil liberties and constitutional rights, where were you when George Bush started all these fascist policies? You were screaming how liberals wanted to destroy the country and were giving Bush all the power and support needed to put through these undemocratic policies.
But now, all of sudden since Barak Obama was elected that has changed. As soon as the last ballot was counted, you started screaming how corporations had too much power. George Bush gave them far, far more than Obama ever did. Why were you so silent about corporate power when Bush did it?
No matter who you talk to, be it a conspiracy theorist Ron Paul supporter, an anti-NWO fanatic, a white supremacist or a socialist, they all see something is wrong. It doesn’t really take much to realize something is wrong. We can all see that the system doesn’t work like we’re told it does in the books. Of course, most people just say that’s the difference between the book study and practical application. Well that is true to a degree, but it doesn’t explain such a sharp divergence between the two.
We’re all seeing the same problem. It’s just that different people see the cause as something different. Some see it as ethnic minorities as causing all the problems. Which isn’t true because all the problems we have, we have had since before 1776 when everyone was white. Some see it as government interference. Which is also not true, considering that 90% of all regulations that exist were pretty much demanded by the people to protect them from something harmful in the system. Some see it as a massive conspiracy by the Jews. And as to be expected these problems existed before there even were banks or capitalism for Jews to supposedly control. Some see it as a bunch of satanic reptile aliens who secretly run the world, which I won’t even dignify with an answer.
We all see there is a problem. We all see things are not working as they should. At no point do any of these people understand that it is the system itself. This exploitative harmful and even hateful system is the problem. Each side is saying something is wrong with the system when it is the system itself.
All too often people say the system isn’t working and that is easy to do. So many YouTube channels have people saying something is wrong; the system is broken while saying nothing on how to fix it or suggest an alternative. That’s easy; you’ll get a lot of supporters broadcasting that kind of message. The fakers are the people who advocate change but never say what that change is. The real people are the ones who advocate what change needs to take place.
Criticism is easy; bringing forth a solution is what’s difficult. We’ve tried an all white society, it didn’t work on a monarchy and it didn’t work under capitalist Hitler. We tried a truly free market system and it didn’t work. That is why we have regulations, the truly free market almost, well actually did kill Iceland.
Socialism and Anarchism are the only things that have ever worked. Now you may point to the Soviet Union or China as some kind of proof Marxism doesn’t work. The only people who say this are the ones who have no knowledge of it and constantly talk like they do. Returning free market/capitalist policies against the will of the people is NOT a failure. It’s a betrayal of public trust. It’s a betrayal of the will of the people.
Before the betrayal the Soviets, the councils did work. Before the capitalist roaders in China, people ran their own factories, farmers formed collectives where they worked together and it worked. It was only Deng Xiaopoing (who was a capitalist) who pushed capitalist policies that didn’t work. Anarchist Spain worked until foreign militaries destroyed it. The Paris Commune worked and it was Communism, Karl Marx who was still alive said so himself. It only came down when multiple countries’ militaries invaded France and restored the Emperor to power. Tribal communism worked for ALL native peoples. Never at any time did those fail. They were all killed off by individualists and profit motive functioning peoples and societies.
The petty individual selfish material interest driven system works in creating a small pocket of wealthy people with misery all around. It works because THAT is what it is supposed to do. That is not the world envisioned by people at all anywhere.