Chapter Thirteen.

Dissolution of the State in Society
A. Revolution vs. Evolution
To a large extent, the distinction between "revolution" and "gradualism" is an artificial
one. It's more a difference in emphasis than anything else. For example, most
revolutionary Marxists agree with Engels (in Anti-Dühring) that much of the groundwork
of socialism will be built within capitalism, until no further progressive development is
possible. Only at that point will the revolutionary transition take place, and the new
society burst out of the older shell that constrains it. On the other hand, even those who
believe the transition from capitalism to socialism can be largely managed peacefully
probably expect that some disruption may occur at the time of the final break with the old
society, as rear guard forces make a desperate attempt to reverse the change.
Among anarchists, Brian Dominick rejects the tendency to identify "revolution" solely
with the period of insurrection. At least as important, as part of the overall process of
revolution, is the period between now and the final insurrection:
The creation and existence of this second power marks the first stage of revolution, that
during which there exist two social systems struggling for the support of the people; one for
their blind, uncritical allegiance; the second for their active, conscious participation.1

Indeed, the primary process of "revolution" is building the kind of society we want
here and now. The insurrection becomes necessary only when, and to the extent that, the
state attempts to hinder or halt our revolutionary process of construction.
Aside from revolutionary upheaval, the very formation of a dual power system in the
present is in fact one of the aims of the dual power strategy -- we seek to create a situation of
dual power by building alternative political, economic and other social institutions, to fulfill
the needs of our communities in an essentially self-sufficient manner. Independence from the
state and capital are primary goals of dual power, as is interdependence among community
members. The dual power situation, in its pre-insurrectionary status, is also known as
"alternative social infrastructure."
And, again, while a post-insurrectionary society which has generally surpassed the
contradictions indicated by the term "dual power" is the eventual goal of this strategy, the
creation of alternative social infrastructure is a desirable end in itself. Since we have no way
of predicting the insurrection, it is important for our own peace of mind and empowerment as
activists that we create situations in the present which reflect the principles of our eventual
visions. We must make for ourselves now the kinds of institutions and relationships, to the

1

Brian A. Dominick, "An Introduction to Dual Power Strategy" (2002)
<http://www.indymedia.org.uk/en/2002/09/41085.html>.

greatest extent possible, on which we'll base further activism. We should liberate space, for
us and future generations, in the shadow of the dominant system, not only from which to
build a new society, but within which to live freer and more peaceful lives today.2

The Wobblies use the phrase "building the structure of the new society within the
shell of the old" to describe this process. But Proudhon anticipated them by some sixty
years:
Beneath the governmental machinery, in the shadow of political institutions, out of the
sight of statesmen and priests, society is producing its own organism, slowly and silently;
and constructing a new order, the expression of its vitality and autonomy….3

Colin Ward, in the Preface to Anarchy in Action, conceptualized it as an anarchist
society that exists, here and now, "side by side with, and in spite of," the statist one:
How would you feel if you discovered that the society in which you would really like to
live was already here, apart from a few little local difficulties like exploitation, war,
dictatorship and starvation? The argument of this book is that an anarchist society, a society
which organises itself without authority, is always in existence, like a seed beneath the snow,
buried under the weight of the state and its bureaucracy, capitalism and its waste, privilege
and its injustices, nationalism and its suicidal loyalties, religious differences and their
superstitious separatism.
Of the many possible interpretations of anarchism the one presented here suggests that,
far from being a speculative vision of a future society, it is a description of a mode of human
organisation, rooted in the experience of everyday life, which operates side by side with, and
in spite of, the dominant authoritarian trends of our society. This is not a new version of
anarchism. Gustav Landauer saw it, not as the founding of something new, 'but as the
actualisation and reconstitution of something that has always been present, which exists
alongside the state, albeit buried and laid waste'. And a modern anarchist, Paul Goodman,
declared that: 'A free society cannot be the substitution of a "new order" for the old order; it
is the extension of spheres of free action until they make up most of social life.'4

B. Dialectical Libertarianism and the Order of Attack
In the meantime, of course, we can simultaneously attempt to roll back the state from
outside, building broad coalitions to do so on an issue-by-issue basis. But if we start from
the assumption that dismantling the state will be a gradual process, and that statelessness
is a goal toward which we will move over time, then the order in which the state is
dismantled will be crucial. As Benjamin Tucker put it, "the question before us is not...
what measures and means of interference we are justified in instituting, but which ones of

2

Ibid.
Pierre Joseph Proudhon, General Idea of the Revolution in the Nineteenth Century. Translated by John
Beverly Robinson (New York: Haskell House Publishers, Ltd., 1923, 1969 [1851]), p. 243.
4
Colin Ward, Anarchy in Action (London: Freedom Press, 1982), p. 14.
3

those already existing we should first lop off."5
So which do we "lop off" first?

Chris Sciabarra's concept of "dialectical libertarianism" is relevant here. According to
Sciabarra, it is a mistake to treat every proposed reduction in some limited facet of state
activity as a step in the right direction. He considered it necessary, instead, to "grasp the
nature of a part by viewing it systemically--that is, as an extension of the system within
which it is embedded." Individual parts receive their character from the whole of which
they are a part, and from their function within that whole.6
As Arthur Silber commented on this approach:
...[C]orporate statism is noted, and condemned, by certain libertarians, but ignored for
the most part by many other libertarians, and by almost all Republicans and conservatives.
But almost all liberals and Democrats have discussed it at length. To be sure, much of that
criticism from liberals and Democrats might be motivated by partisan concerns. But, to judge
from a number of commentaries I have read, there are also many liberals and Democrats who
condemn it on principle, and understand how dangerous this corporate statism is, regardless
of which party happens to be practicing it.
But the question I have been wrestling with is this: why exactly are certain libertarians
and liberals focused on certain issues – while many other libertarians and most conservatives
are seemingly oblivious to them? What is the mechanism involved? What is the process or
method that explains it?....
These issues are very complex, so I will state the main point very briefly to begin with:
there are two basic methods of thinking that we can often see in the way people approach any
given issue. One is what we might call a contextual approach: people who use this method
look at any particular issue in the overall context in which it arises, or the system in which it
is embedded. Liberals are often associated with this approach. They will analyze racism or
the “power differential” between women and men in terms of the entire system in which
those issues arise. And in a similar manner, their proposed solutions will often be systemic
solutions, aimed at eradicating what they consider to be the ultimate causes of the particular
problem that concerns them.
The other fundamental approach is to focus on the basic principles involved, but with
scant (or no) attention paid to the overall context in which the principles are being analyzed.
In this manner, this approach treats principles like Plato’s Forms....7

5

Tucker, "Voluntary Co-operation," Instead of a Book, p. 104.
Chris Matthew Sciabarra, Total Freedom: Toward a Dialectical Libertarianism (University Park, Penn.:
The Pennsylvania State University Press, 2000), p. 88.
7
Arthur Silber, "In Praise of Contextual Libertarianism," The Light of Reason blog (now defunct),
November 2, 2003. Reprinted at Once Upon a Time blog, November 26, 2005
<http://powerofnarrative.blogspot.com/2003/11/in-praise-of-contextual-libertarianism.html>.
6

In seeking to dismantle the state, we must start with a strategic picture of our own. It
is not enough to oppose any and all statism, as such, without any conception of how
particular occurences of statism fit into the overall system of power. Each concrete
example of statism must be grasped in its relation to the system of power as a whole, and
with regard to the way in which the nature of the part is determined by the whole to which
it belongs. That is, we must examine the ways in which it functions together with the
totality of elements in the system, both coercive and market, to promote the interests of
the class controlling the state.
In forming this strategic picture, we must use class analysis to identify the key
interests and groups at the heart of the system of power.
We already saw, in Chapter Eleven, the distinction between the economic and
political means to wealth, and the nature of the state as the organized political means.
But there is a wide range of possible versions of libertarian class theory, differing on the
relationship in which private actors stand to the political means and to the state.
One version of libertarian class analysis, heavily influenced by public choice theory,
tends to dismiss the idea of a coherent structure to the coalition of class interests using the
political means. As Sciabarra describes it, for example, Murray Rothbard‘s view of the
state might seem at first glance to superficially resemble interest group liberalism:
although the state is the organized political means, it serves the exploitative interests of
whatever random assortment of political factions happens to seize control of it at any
given time. This picture of how the state works does not require any organic relation
between the various interest groups controlling the state at any time, or between them and
the state. The state might be controlled by a disparate array of interest groups, ranging
from licensed professionals, rent-seeking corporations, farmers and regulated utilities, to
big labor; the only thing they have in common is the fact that they happen to be currently
the best at latching onto the state.
This is essentially what Roderick Long calls "statocratic" class theory: a class theory
that emphasizes the state component of the ruling class at the expense of its plutocratic
elements. Long cites David Friedman as an extreme version of the statocratic approach:
It seems more reasonable to suppose that there is no ruling class, that we are ruled, rather, by
a myriad of quarrelling gangs, constantly engaged in stealing from each other to the great
impoverishment of their own members as well as the rest of us.8

Despite the superficial resemblance of Rothbard's theory to the statocratic approach,
Long argues that Rothbard's position in fact more closely resembles what he calls the
"plutocratic" class theory. Rothbard saw the state as controlled by

8

David Friedman, The Machinery of Freedom, quoted in Roderick T. Long, "Toward a Libertarian Theory
of Class," Social Philosophy & Policy 15:2 (1998), p. 327.

a primary group that has achieved a position of structural hegemony, a group central to class
consolidation and crisis in contemporary political economy. Rothbard’s approach to this
problem is, in fact, highly dialectical in its comprehension of the historical, political,
economic, and social dynamics of class.9

Walter Grinder and John Hagel attempt, from an Austrian perspective, to describe this
hegemonic group of classes in control of the state.10 For Grinder and Hagel, the core of
the state capitalist class system is 1) finance capital, which has (acting through the state)
set up the central banking system as a quasi-private banking cartel; and 2) the
commanding heights of the industrial economy most closely clustered around finance
capital.
Another excellent article, by John Munkirs,11 treats the corporate economy as a
privately owned central planning system, with a core of large industrial enterprises tightly
linked through interlocking directorates, and clustered around a smaller inner core of
large banks which control the whole system through the direction of capital flow. This
becomes considerably more plausible, despite the ostensible competition within the
Fortune 500, when we remember how tightly competition between firms is actually
regulated by such devices as "intellectual property," regulatory restaints on competition in
product features, the partial supercession of price competition by brand name
specification, and so forth. The reality is much closer to the model of the Detroit Big
Three carefully rationing out incremental improvements by tacit mutual agreement, or to
onetime ADM chief Dwayne Andreas' dictum "The competitor is our friend; the customer
is our enemy."
Grinder and Hagel, like most Austrians, see the seizure of the state by this plutocratic
class coalition as relatively recent, arising with the expansion of the regulatory-welfare
state at the turn of the twentieth century (as described by Gabriel Kolko, among others),
or with the rise of the central banking system.
In fact, however, the most fundamental "structural hegemony" was built into
capitalism from its beginnings as a successor to the feudal/manorial system. The basic
understanding was stated by Thomas Hodsgkin and by Franz Oppenheimer, both of
whom saw the existing capitalist order as a monstrous hybrid of genuine free markets and
the old feudal order. The new capitalist ruling class was amalgamated with the landed
aristocracy of the Old Regime, and made use of the same privilege, the same political
means, as had the landed interests before it. This was described by Immanuel Wallerstein
as a portion of the feudal landed classes transforming themselves into capitalists.

9

Ibid., p. 87.
Walter E. Grinder and John Hagel, "Toward a Theory of State Capitalism: Ultimate Decision-Making
and Class Structure," Journal of Libertarian Studies 1:1 (Spring 1977), pp. 59-79.
<http://www.mises.org/journals/jls/1_1/1_1_7.pdf>
11
John Munkirs, "Centralized Private Sector Planning: An Institutionalist's Perspective on the
Contemporary U.S. Economy," Journal of Economic Issues (pre-1986) , December 1983, pp. 931-967.
10

Capitalism as a historical system still bears the marks of its origins in the Old Regime.
The overall class nature of the state was summarized by Tucker in comparatively
simple terms: "...the State exists mainly to do the will of capital and secure it all the
privileges it demands...."12
To the extent that capitalists act in league with the state, and secure to themselves the
benefits of special privilege by acting through the state, they should not be regarded
merely as passive beneficiaries. They should be regarded as a component of the state:
Here... is a wealthy manufacturer, who thinks of himself as a businessman and is so
regarded by his peers. But this man's industry enjoys a legal privilege in the form of tariff
protection against foreign steel, which enables him to command a higher domestic price for
his own steel. This industrialist is not, however he may think of himself, a businessman; he
is a subdivision of the State.... A simon-pure businessman has no leverage over anyone; he
cannot force anyone to work for him, nor can he force anyone to buy his products. The
limits of his influence are set by the quality of the goods he offers for sale, their appeal to
customers, and his gifts of persuasion. No private citizen, businessman or other, has the
power to coerce unless the law grants him a license to bend the will of others forcibly in his
favor. In which case he is a component of the state.13

Brad Spangler used the analogy of a gunman and bagman in a holdup to illustrate the
principle:
Let’s postulate two sorts of robbery scenarios.
In one, a lone robber points a gun at you and takes your cash. All libertarians would
recognize this as a micro-example of any kind of government at work, resembling most
closely State Socialism.
In the second, depicting State Capitalism, one robber (the literal apparatus of
government) keeps you covered with a pistol while the second (representing State allied
corporations) just holds the bag that you have to drop your wristwatch, wallet and car keys
in. To say that your interaction with the bagman was a “voluntary transaction” is an
absurdity. Such nonsense should be condemned by all libertarians. Both gunman and bagman
together are the true State.14

Evaluating the functions of the state in terms of the class purpose they serve makes
easier to understand the importance of dismantling them in the proper order. No politicoeconomic system has ever approximated total statism, in the sense that "everything not
forbidden is compulsory." In every system, there is a mixture of compulsory and

12

Benjamin Tucker, "Liberty and Aggression," Instead of a Book, By a Man Too Busy to Write One, p. 75.
Edmund Opitz, "Introduction," Albert Jay Nock, Our Enemy, the State (Delavan, Wisc.: Hallberg
Publishing Corporation, 1983), p. 17.
14
Brad Spangler, "Recognizing faux private interests that are actually part of the State,"
BradSpangler.Com, April 29, 2005 <http://www.bradspangler.com/blog/archives/54>.

13

discretionary behavior. The ruling class in every system allows some amount of
voluntary market behavior within the interstices of a system whose overall structure is
defined by coercive intervention. The choice of what forms of activity to leave to
voluntary exchange, just as much as of what to subject to compulsory regulation, reflects
the ruling class's strategic assessment of what overall mixture of coercion and voluntary
exchange will maximize the political extraction of wealth.
Likewise, any "free market reform" put forth by the corporate capitalist ruling class
will reflect their judgment as to which mixture of statist and market elements will
produce the highest overall rate of political extraction of wealth. As Walter Grinder and
John Hagel put it,
It must be stressed that the beneficiaries of the political means in a market oriented
economy are dependent on the existence of the economic means in order to survive and
prosper.... In view of the depencence of the political means on the economic means, the
optimal strategy for the political class to pursue will not be to maximize short-term returns,
but rather to promote as productive a system as possible, consistent with the preservation of
its exploitative position within that system.15

To welcome the ruling class's choice of targets for "free market reform," made in
accordance with their own strategic vision, is equivalent to the Romans welcoming the
withdrawal of the Punic center at Cannae as "a step in the right direction." Hannibal's
decision in that case was not the first step toward Carthaginian withdrawal from Italy, but
part of a general design aimed at maximizing his overall strength.
"Free market reform," in the terms generally proposed by corporate lobbyists and
corporate-funded think tanks, is a mirror image of "lemon socialism." Under lemon
socialism, the state generally chooses to nationalize those industries which corporate
capital will most benefit from having taken off its hands, and to socialize those functions
which capital would most prefer the state bear the cost of. Under "lemon market reform,"
on the other hand, corporate capital liquidates interventionist policies after it has
squeezed all the benefit out of them.
As Noam Chomsky put it, "Concentrated private power strongly resists exposure to
market forces, unless it’s confident it can win in the competition." The legacy
beneficiaries of all that statism decide it's finally safe to change the rules and compete
with the non-beneficiaries on a "level playing field." That's pretty much what was
involved in the British adoption of "free trade" in the nineteenth century: after they'd built
a global commercial empire through mercantilism, forcibly unified world commerce in
British bottoms, suppressed foreign textile trade, committed holocausts in Ireland and
India, and exported enclosures to half the world, they decided it was time for the lion and
the lamb to compete under a single law.

15

Grinder and Hagel, "Toward a Theory of State Capitalism," p. 69.

And as a corollary, corporate capital at any given time allows free competition only in
the areas where it expects it can win. As Chomsky put it in the same piece, so-called
"Free Trade" Agreements are
a mixture of liberalization and protectionism, designed—not surprisingly—in the
interests of the designers: mainly MNCs, financial institutions, the investor/lender
class generally, the powerful states that cater to their interests, etc.16
The prevailing libertarian approach of welcoming the reduction or elimination of any
particular form of state activity as "a step in the right direction" is what Silber calls
"atomistic libertarianism." Atomist libertarians argue "as if the society in which one lives
is completely irrelevant to an analysis of any problem at all."17
Under state capitalism, some forms of state intervention are primary, directly serving
the primary purpose of the ruling class: the exploitative extraction of wealth by the
political means. Other forms of state intervention are secondary, aimed at ameliorating
the side effects of this primary wealth extraction and stabilizing the system. The latter
include labor regulations and welfare state measures that keep destitution, homelessness,
and starvation at manageable levels, so as to avoid their politically destabilizing effects.
They include Keynesian measures to correct the tendencies toward overproduction and
underconsumption that result from maldistribution of income in a system of privilege. A
formal reduction in statism that applies only to those state measures limiting or
ameliorating the exploitation enabled by the more fundamental forms of state
intervention, and without addressing the primary forms of intervention themselves which
directly enable exploitation, will amount to an absolute increase in the level of actual
exploitation enabled by the state.
The strategic priorities of genuine free market libertarians should be the direct
opposite: first to dismantle the fundamental, structural forms of state intervention whose
primary effect is to enable exploitation; and only then to dismantle the secondary,
ameliorative forms of intervention which serve to make life bearable for the average
person living under a system of state-enabled exploitation. Jim Henley described this
approach as removing the shackles before removing the crutches (e.g., eliminating
corporate welfare before welfare to the poor).18
Roderick Long discussed it at greater length in a 1995 article. In the case of
deregulation, he presented the case of a corporation with a government-enforced
monopoly that is, at the same time, subject to price controls. The question facing the

16

Noam Chomsky, "Resistance to Neoliberal Globalization," ZNet Blog, Oct. 2005
<http://blog.zmag.org/index.php/weblog/entry/resistance_to_neo_liberal_globalization/>. (Now defunct-retrieved through Internet Archive.)
17
Silber, "In Praise of Contextual Libertarianism."
18
Jim Henley, "Ask Me What the Secret of 'L - TIMING! - ibalertarianism' Is," Unqualified Offerings blog,
February21, 2008 <http://www.highclearing.com/index.php/archives/2008/02/21/7909>.

would-be dismantler of the state is whether to abolish the monopoly and price controls at
the same time, and if not, which to abolish first. If they are abolished simultaneously, the
newly "deregulated" corporation will be in the position of collecting monopoly profits
until sufficient time has elapsed for competitors to enter the market and undercut its price.
This is an injustice to consumers. Long concluded that the most just alternative is to
"Remove the monopoly privilege now, and the price controls later."
But is it ethical to continue imposing price controls on what is now a private company, one
competitor among others? Perhaps it is. Consider the fact that Amalgamated Widgets'
privileged position in the marketplace is the result neither of it own efforts nor of mere
chance; rather, it is the result of systematic aggression by government in its favor. It might be
argued, then, that a temporary cap on the company's prices could be justified in order to
prevent it from taking undue advantage of a position it gained through unjust violence
against the innocent.19

The individualist anarchists, starting as early as Tucker himself, made it clear that it
matters very much what order the process of dissolution is to follow (or in his own words
above, which measures of interference already existing we should first lop off). He called
for the abolition of government "to take place gradually, beginning with the downfall of
the money and land monopolies and extending thence into one field after another,
…accompanied by such a constant acquisition and steady spreading of social truth," that
the public would at last be prepared to accept the final stage of replacing government with
free contract even in the area of police protection.20
Tucker's associate Clarence Swartz, in a passage that foreshadowed the neoliberals'
ersatz "free market" policies of our day, wrote of the harm the working classes would
suffer if the state were dismantled in an order that suited the interests of the plutocracy
rather than of producers:
Mutualism... would not abolish this monopoly [the tariff] first, since to do that and leave
labor at the mercy of the money monopoly would be unwise and harmful, even though, in the
meantime, all those engaged in producing commodities that are not protected against foreign
competition are forced to pay tribute to those manufacturers who are so protected.21

Regulations which serve only to limit and constrain the exercise of privilege are not
even, properly speaking, a net increase in statism at all. They are simply the statist ruling
class's stabilizing restrictions on its own more fundamental forms of intervention.
A good example was raised by Arthur Silber in another article, on the question of
whether pharmacists should have the right to refuse to dispense prescribed medication
(birth control pills, "morning after" pills, etc.) based on their religious views. The

19

Roderick T. Long, "Dismantling Leviathan From Within," Part II: The Process of Reform. Formulations
3:1 (Autumn 1995) <http://www.libertariannation.org/a/f31l3.html>.
20
Tucker, "Protection and Its Relation to Rent," Instead of a Book, p. 329.
21
Clarence Swartz, What is Mutualism?, p. 48

atomistic libertarian's reflexive position, Silber observed, is "Yes, of course!" Anyone
participating in the market should have the right to buy and sell, or not buy and sell, as he
sees fit. "For many libertarians, that is in essence the totality of the argument." But the
atomistic libertarian makes the implicit assumption "that this dispute arises in a society
which is essentially free." But in fact, pharmacists are direct beneficiaries of compulsory
occupational licensing, a statist racket whose central purpose is to restrict competition
and enable them to charge a monopoly price for their services.
The major point is a very simple one: the pharmacy profession is a state-enforced
monopoly. In other words: the consumer and the pharmacist are not equal competitors on the
playing field. The state has placed its thumb firmly on the scales -- and on one side only.
That is the crucial point, from which all further analysis must flow....
...[T]he state has created a government-enforced monopoly for licensed pharmacists.
Given that central fact, the least the state can do is ensure that everyone has access to the
drugs they require -- and whether a particular pill is of life and death importance is for the
individual who wants it to decide, not the pharmacist and most certainly not the
government.22

When the government confers a special privilege on a person, a business, or an
industry, and then sets regulatory limits on the ways they can abuse that privilege, the
latter regulation is not a new intrusion of statism into a free market. It is, rather, the
state's limitation and qualification of its own underlying statism. The secondary,
qualifying regulation is not a net increase in statism, but a net reduction in statism. On
the other hand, the repeal of the secondary regulation, without an accompanying repeal of
the primary privilege, would be a net increase in statism. The beneficiaries of privilege
are a de facto branch of the state, the elimination of regulatory constraints on their abuse
of privilege has the same practical effect as repealing a constitutional restriction on the
state's exercise of its powers.
A good example is "Free Trade Agreements" on the pattern of NAFTA and the GATT
Uruguay Round. The reduced old-fashioned protectionism of tariff barriers, coupled with
a vast strengthening of the new protectionism of "intellectual property," actually increases
the level of state protectionism in the global economy. The dominant actors in the global
economy are transnational corporations, and patents and copyrights serve the same
protectionist function for them that tariffs did in the old national industrial economies.
These new dominant actors favor dismantling the tariffs because their former
protectionist function is now obsolete in an era of international capital. The elimination
of tariffs does not open up "national industry" to competition; national industry no longer
exists, for the most part. The elimination of tariffs makes it easier for global
corporations, whose market power depends on state grants of "intellectual property," to
shuffle goods between their subsidiaries around the world. Most of what is called

22

Arthur Silber, "Not So Fast, Please: Contextual Libertarianism, One More Time," Once Upon a Time
blog, April 8, 2005 <http://powerofnarrative.blogspot.com/2005_04_01_archive.html>.

"international trade" actually consists of just such administrative transactions. In
promoting what is conventionally called "free trade," the TNCs do not seek a genuine
reduction in the overall level of statism. They seek to replace one form of statist
protection that has outlived its usefulness with a new form of statist protection more
conducive to their current business model. One form of statism is eliminated because it
works at cross-purposes to the primary form of statism they currently rely on. The old
protectionism of tariffs interferes with their using the new protectionism of patents and
copyrights to its full advantage.
It is the typical approach of vulgar libertarianism to treat the secondary limitations in
isolation and to clamor for their removal, while treating the underlying form of statism as
irrelevant to the immediate issue (if not remaining completely oblivious to it).
C. The "Free Market" as Hegemonic Ideology
In the past, I've used the term "vulgar libertarianism" to describe the misappropriation
of "free market" rhetoric to defend the interests of existing concentrations of wealth and
power under coporate capitalism. As I wrote elsewhere,
Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal
sense: they seem to have trouble remembering, from one moment to the next, whether
they’re defending actually existing capitalism or free market principles. So we get the
standard boilerplate by the Adam Smith Institute [or at Mises.Org] arguing that the rich can’t
get rich at the expense of the poor, because "that’s not how the free market works"-implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that
the present system is not a free market, and that it includes a lot of state intervention on
behalf of the rich. But as soon as they think they can get away with it, they go right back to
defending the wealth of existing corporations on the basis of "free market principles."23

In the vulgar libertarian universe, in Ayn Rand's memorial phrases, big business is a
"persecuted minority," and the military-industrial complex is "a myth or worse." Giant
corporations are the heroic figures of the market, the John Galts who keep the engine of
the world running, and the bad guys--the "looters"--are welfare moms and "trial lawyers."
The revolutionary slogan of the vulgar libertarian is "Them pore ole bosses need all the
help they can get"--or perhaps an inversion of the sheep's chant in Animal Farm: "Two
legs good, four legs baaaad!"
Of course, this is nonsense, as Bryan Register said. In regard to welfare recipients, for
example,
such persons are often victims not only of structural dislocations in the economy caused by
the economic machinations of the ruling class, but of barriers to market entry maintained by

23

Kevin Carson, Studies in Mutualist Political Economy

those who wish not to face competition. Welfare is the means by which resentment against
these effects is kept under control; welfare recipients ought not be looked at as members of a
dominant class, but as enemies of the dominant class whose silence is purchased with state
handouts.24

A vulgar libertarian, on the other hand, believes the main political force behind the
food stamp program was the powerful voting block of single welfare mothers, and not
Cargill. Or to quote Lawrence Lessig:
There's a speech that Reagan gives in 1965, where he talks about how democracy always
fails because once the people recognize they can vote themselves largess, they just vote
themselves largess and the fiscal policy is destroyed. Well, Reagan had it half-right. It's not
as if it's the poor out there who have figured out how to suck the money out of the rich. It's
exactly the other way around.25

The vulgar libertarian misappropriation of the values and symbolism of the "free
market" serves, in part, the function of a hegemonic ideology under state capitalism.
Register, in the same article quoted above, brilliantly adapted the Gramscian theory of
ideology to libertarian class analysis. In the democratic West, "members of the state itself
are often not the primary beneficiaries of statism." The state capitalist ruling class, he
said,
exists within civil society and employs the state as a means to distort the workings of civil
society, especially the market....
...The libertarian analysis of contemporary society will be similar to Marx's in that it
regards state action as caused by the desires of certain actors within civil society, but it will
be like the classical liberal approach in that it regards classes within civil society as
essentially constituted by differential relations to state power. Thus neither the class
divisions between the state-banking nexus and others within civil society, nor the distortive
actions of the state, are mere epiphenoma of one another: they relate, dialectically, in a
mutually supporting manner.

The important thing, for our present purpose, is that "the maintenance of state power
requires that the populace acquiesce in state actions. This requires the development of
hegemony in civil society." As Ralph Nader put it,
The controlling power in any society strives to make sure that, one way or another, its
dark sides are not part of the mainstream public dialogue nor are they part of the perceived
explanation of that society's structural shortfalls and injustices.26

24

Bryan Register, "Class, Hegemony, and Ideology: A Libertarian Approach" (2001).
<http://folk.uio.no/thomas/po/class-hegemony-ideology-lib.html>
25
Christopher Hayes, "Mr. Lessig Goes to Washington," The Nation, May 29, 2008
<http://www.thenation.com/doc/20080616/hayes>.
26
Ralph Nader, "Introduction," in Charlers Derber, Corporation Nation: How Corporations are Taking
Over Our Lives and What We Can Do About It (New York: St. Martin's Griffin, 1998), p. viii.

The fake "free market" ideology, disseminated in the schools and mainstream media,
and appealed to by mainstream politicians of both major parties, plays a central role in
achieving this purpose. The interests of giant corporations are defended in terms of
traditional values of private property and freedom of contract; their wealth is justified as
the reward for thrift, industry, ingenuity, and otherwise superior performance in the
market.
Big government liberalism is a mirror-image of vulgar libertarianism, existing in
partial opposition to it. I say partial opposition because both ideologies share, to a large
extent, the same factual depiction of the world in common.
Register, citing Robert Higgs' explanation of ideology,27 notes that "[f]or Higgs, the
essential feature of the ideologies is that they are value-systems."
Were we to present identical phenomena to persons with different ideologies, they
would come away with different evaluations. But this is typically not the case, because
we often cannot present identical phenomena to persons with different ideologies.
Ideologies are not only value-systems, they also involve claims of fact. For this reason,
different evaluations of 'identical' phenomena are not to be explained simply with
reference to different values, but largely with reference to different beliefs about matters
of fact.
An example may clarify. Consider the Gulf War. As explained in the popular press of
our semi-fascist semi-liberal welfare-warfare state, the Gulf War was in fact a response by
western democracies to violent aggression by a dictator. Since the United States and its allies
have a moral obligation to preserve democratic institutions, such as those of Kuwait,
whenever possible, the Gulf War was clearly appropriate and moral. This is especially so in
light of the negligible loss of civilian life caused by US surgical strikes.
A socialist or libertarian capitalist critic of the Gulf War probably would not disagree
that it is good to fight tyrants and defend democracy, and that there are times when this might
be an appropriate action for a democratic state to take. Such a critic would, however, pay
attention to other relevant facts of the matter and hence derive a very different evaluation. It's
not that stopping tyrants is bad, it's that Hussein's tyranny was really US tyranny; it's not that
democratic institutions are bad, it's that Kuwait doesn't have any; it's not that minimal loss of
civilian life is bad, it's that US action has caused the deaths of millions of civilians.
Because the two ideologies - that of the statist mass media, and those of the libertarian or
socialist critic - seek different kinds of factual, explanatory accounts, they might end up
giving different evaluations because of their different explanations of how the social world
works. But with respect to explanations of social events, there is a matter of fact about how
things are. An ideology which lays bare the actual explanations of events is different in kind
from an ideology which mystifies or obscures the real world. This is the difference which the
pejorative conception of ideology seeks to mark.

27

Robert Higgs, Crisis and Leviathan (Oxford: Oxford University Press, 1987).

The relationship between vulgar libertarianism and big government liberalism--the
two dominant ideologies in American political culture--is just the opposite. They largely
agree on the world of fact, but disagree on the significance or valuation they attach to
those facts.
Both ideologies agree, for the most part, that big business arose from what was for all
intents and purposes a system of laissez-faire, and that the concentration of capital in the
hands of a small number of business enterprises is the natural outcome of a "free market."
Both ideologies agree that this outcome can be prevented only by government
intervention to thwart the natural functioning of the market. Both ideologies agree that
the central motivation of the twentieth century regulatory-welfare state, as it emerged
during the Progressive Era and New Deal, was to restrain big business in the public
interest. This common view of the world was stated, in almost identical terms, by liberal
Arthur Schlesinger, Jr., and Theodore Levitt of the Harvard Business Review:
Liberalism in America has ordinarily been the movement on the part of the other sections of
society to restrain the power of the business community.28
Business has not really won or had its way in connection with even a single piece of
proposed regulatory or social legislation in the last three-quarters of a century.29

Their only areas of disagreement concerns whether the existence of unregulated big
business is a good or a bad thing, and whether social regulation of big business in the
public interest is desirable.
This common factual depiction of the world reflects the common power interests
behind the two ideologies. Vulgar libertarianism and vulgar liberalism, respectively, are
the ideologies of the two wings of the state capitalist ruling class. The power interests of
both wings of corporate capital depend on public acceptance of this common factual
depiction of the world. One side has a vested interest in the misconception that the
present concentration of wealth and power in the hands of big business is the result of
superior performance in the market, and that this distribution of wealth and power can be
altered only through state intervention. The other side has a vested interest in promoting
the belief that the regulatory-welfare state is necessary as a "countervailing power" to big
business, as opposed to its actual function of propping it up. The two ideologies serve to
legitimate, respectively, big business and big government, and are to a large extent
mutually supportive.
D. Gradualism and the "Magic Button"

28

Arthur Schlesinger, Jr., The Age of Jackson (Boston: Houghton-Mifflin, 1946), p. 505.
"Why Business Always Loses," quoted in G. William Domhoff, The Higher Circles: The Governing
Class in America (New York: Vintage Books, 1971), p. 157.
29

Charles Johnson has raised some challenging ethical concerns about the dialectical
approach. He finds himself in general agreement with my strategic focus:
...Defending immediate and complete abolition on principle, and the abolition of any
coercive program you may get the opportunity to abolish, doesn’t entail any particular order
of priorities in terms of the scope or order in which you might concentrate your own limited
resources towards making opportunities for abolition that didn’t previously exist. And that’s
where I think the interesting part comes in, and where there is a lot of room for interesting
discussion about freedom, class, and strategic priorities when it comes to government
interventions with distinctive class profiles.30
...It's an odd form of libertarianism, and a damned foolish one, that operates by trying to
pitch itself to the classes that control all the levers of power in both the market and the State,
and to play off their fears and class resentment against those who have virtually no power, no
access to legislators, are disproportionately likely not to even be able to vote, and who are
trodden upon by the State at virtually every turn.31

In such questions of stategic priority, and in his understanding of the class nature of
the state, Johnson's position is entirely dialectical:
In setting strategic priorities, we have to look at which forms of government coercion do the
most concrete damage, which forms of government coercion has intended victims who are
most vulnerable to it, which forms have intended victims who can more easily evade or game
the system on their own, and, perhaps most importantly, which forms serve as the real
historical and ideological anchors for establishing and sustaining the distorted statist social
order, and which forms are relatively superficial efforts to stabilize or ameliorate the effects
of those anchors. [emphasis added] I think that on all these counts, a serious look at who
calls the shots and who takes the bullets will show that the welfare state, such as it is, is a
fairly small and superficial effort to ameliorate the effects of deep, pervasive, and incredibly
destructive economic and institutional privilege for big, centralized, bureaucratic state
capitalism, and (as much or more so) for the class power of the State itself over the poor
folks that it beats up, locks up, institutionalizes, bombs, robs of their homes and livelihoods,
and so on. Moreover, it’s a fairly small and superficial effort which doesn’t violate
anybody’s rights per se; it’s the coercive funding of government doles, not their mere
existence, that involves government violence, and in that respect, while I think they should
be abolished, they’re on quite a different footing from things like the warfare state and the
underlying government monopolies and privileges that the welfare state is intended to correct
for, which involve coercion both in funding and in the very things that the funding is used
for. All this tends to support strategic priorities in favor of (as Tom Knapp himself originally
put it) cutting welfare from the top down and cutting taxes from the bottom up.32

30

Charles Johnson, "On Crutches and Crowbars: Toward a Labor Radical Case Against the Minimum
Wage," Rad Geek People's Daily, March 6, 2008 <http://radgeek.com/gt/2008/03/06/on_crutches/>.
31
Comment under Kevin Carson, "On Dissolving the State, and What to Replace it With," Mutualist Blog:
Free Market Anti-Capitalism, March 3, 2008 <http://mutualist.blogspot.com/2008/03/on-dissolving-stateand-what-to-replace.html>.
32
Johnson, "On Crutches and Crowbars."

Nevertheless, that phrase, "the abolition of any coercive program you may get the
opportunity to abolish," is key. Libertarians, Johnson says, should welcome the
opportunity to dismantle any form of state intervention, without regard to its structural
function or the order in which it occurs, if an opportunity arises to do so:
If I had a platform, it would be three words — Smash the State — and the programme I favor
for implementing that is for each and every government program to be be abolished
immediately, completely, and forever, whenever, wherever, in whatever order, and to
whatever extent that we can, by hook, by crook, slingshot, canoe, wherever the political
opportunity to do so presents itself.33

He justified this approach in terms of the primary libertarian ethics of self-ownership,
and non-aggression:
I'm an immediatist, not because I deny that there's ever an importance difference in the
likely results of repealing A-before-B as versus repealing B-before-A, but rather because I
think that there are things that nobody ever has the moral right to do to another human being,
no matter what results you can get from it, and one of those things is coercing her in her use
of her own person and property. If both A and B are genuinely coercive, then I'd argue that
there's never any justification or excuse for continuing to do either of them. Even if it would
be better for A to go first and then B, rather than B to go first and then A, if the opportunity
to repeal B arises before the opportunity to repeal A does, then I'd say that it's morally
obligatory to repeal B anyway, because neither you nor I nor anybody else has the right to go
on coercing anybody for even a second longer, whatever our considered judgment about the
likely results of their freedom may be.
Of course, if there isn't any opportunity to repeal either A or B at the moment, then the
question is what sort of strategy you ought to adopt in the effort to make the opportunity
arise. And in that case, it's perfectly reasonable for your considered judgment about likely
results to determine your strategic priorities, in terms of which forms of coercion you will
first and most intensely focus on making repeal-able, given your limited time and resources.34

He went on to challenge me, on that basis, with something like the Leonard
Read/Murray Rothbard "magic button" scenario:
So I reckon that the question is this: suppose you had a rather limited version of
Rothbard's Magic Button, which would allow you to magically repeal (say) personal income
tax on the top 10% of taxpayers, while leaving all other personal income tax and FICA
payroll tax in place. And let's take it for granted that we all dialectically understand the role
of the State, and its different functions, within the social order of power and its relationship
with the dynamics of class exploitation. Still. There's the button. Would you push it, or
would you refuse to push it, on the grounds that you need to cut taxes either from the bottom-

33
34

Johnson, "On Crutches and Crowbars."
Comment under Carson, "On Dissolving the State."

up or else not at all?35

With my back to the wall, and after much soul-searching, I decided I wouldn't push
the magic button under those circumstances.
...I think the net effect in this case, as in many hypothetical scenarios of dismantling the
state in the wrong order, would be--as counterintuitive as it may seem--to increase the net
level of exploitation carried out with the help of the state. The increased freedom from state
exploitation would fall almost entirely to those whose incomes derive from exploitation, and
its chief practical effect wold be to further increase the competitive advantage of their
exploitative activities against those truly engaged in the "economic means."
I'd probably even quibble as to whether it amounted to a reduction in statism even as
such, since a high marginal tax rate on Bill Gates arguably amounts to the state ameliorating
or moderating its primary act of statism in guaranteeing the income to Gates in the first place
through IP. A great deal of such "statism" amounts, in practice, to the state setting sideconstraints on what can be done with the loot acquired by state robbery. To apply Brad
Spangler's bag man analogy, a lot of it is akin to the gunman telling the bagman, after the
victim has handed his wallet over at gunpoint, to give the victim back enough to pay cab fare
back home so he'll be more likely in future to earn enough to be robbed again.36

When the state is controlled by robbers, and every decision for or against state
intervention in a particular circumstance reflects the robbers' strategic assessment of the
ideal mixture of intervention and non-intervention, it's a mistake for a genuine anti-state
movement to allow the priorities for "free market reform" to be set by the robbers'
estimation of what forms of intervention no longer serve their purpose. If the corporate
ruling class is proposing a particular "free market reform," you can bet your last gold
filling it's because they believe it will increase the net level of statist exploitation.
Most importantly, we can pretty much count on all the opportunities that present
themselves for "free market reform," under the present system, having just that effect. An
anti-state movement that leaves the initiative to the official corporate-funded "libertarian"
movement will be relegated to a position of "yes, but...", higgling around the edges of
Reaganism and Thatcherism, and the kinds of "free market reform" Milton Friedman
celebrated in Pinochet's Chile.
Johnson did not, in fact, disagree with my assessment of the likely net effect of such a
top-down approach to cutting taxes:
Well, I'm not sure that that's especially counterintuitive. I'm perfectly willing to grant that
there are plenty of cases where it's true. What I'm trying to stress is that, as far as I can tell,
we don't disagree very much about the net consequences of different sequences of repeal. I
agree that in the hypothetical case I gave, there might very well be a net increase in the

35
36

Comment under Carson, "On Dissolving the State."
Comment under Carson, "On Dissolving the State."

predominance of class exploitation in the markets for labor, land, etc.
But, while I agree with you on that, I also think you have to keep in mind that when you
make political choices you're not just making choices about which God's-eye-view net
outcome you would prefer. You're acting within the world, as one mortal creature among
many fellow creatures, and when you deliberate about what to do you have to deliberate
about what sort of person you, personally, are going to be, and what you, personally, are or
aren't willing to do to another human being. I know that I, personally, couldn't live with
deliberately choosing to shove around or rob another human being, or letting another human
being go on being shoved around or robbed, for even a second longer, if all I needed to do to
stop the latter would be to push a button, no matter how much I might prefer the results that I
might be able to get from it. Because I'm not a thief or a bully, and I don't want to let myself
become an accomplice of thieves or bullies, either, even if it would otherwise improve my
quality of life. Hence why I'd push the button, immediately and without reservation, even
though I do in fact think that the net consequences of doing so would be substantially worse,
in terms of things that I care about and which affect me personally, than the net
consequences of repeal in the opposite order.
So I'm anti-gradualism not because I'm anti-dialectics, but rather because I think that
there are personal obligations of justice involved in the political choices you make, and that
dialectically-grounded praxis has to integrate those personal obligations into your course of
action just as much as it has to integrate the general, big-picture view of class dynamics,
socio-political structure, et cetera. In fact, if a process of deliberation abstracts away from the
ground-level personal obligations of justice, fair treatment, etc. that we all have to each
other, and only reckons what to do based on some very high-level structural-functional
considerations about society as a whole and global-level net consequences, then I'd say that
process of deliberation has become dangerously one-sided and acontextual. A praxis that
doesn't take into account what I could or couldn't live with as a conscientious human being is
an anti-dialectical and indeed an inhuman praxis.

I don't entirely disagree with Johnson on this ethical point. But I think there's a
legitimate ethical question as to whether the person pushing the button, as he would,
would be directly complicit in enabling the increased net statism (i.e., the net exploitation
resulting from the mixture of state and market that remains when the ruling class sets the
priorities for "reform") that would result from doing so. My role in enabling coercion and
exploitation would be almost (or at least) as direct in pushing the button, as in not
pushing it. And while refraining from pushing would simply leave the status quo to
change by its own internal processes as it would have anyway, pushing would make me
an active agent in creating fundamental structural changes that would make an increased
number of people worse off, as the result of increased exploitation.
A formal reduction in statism that applies only to those state measures limiting or
ameliorating the exploitation, which itself is directly enabled by more fundamental forms
of state intervention, and without addressing the more fundamental forms of statism that
actually enable the exploitation, amounts to an absolute increase in the actual level of
exploitation directly enabled by the state. Since once the button is put in my hand, I'm
directly complicit in whatever level of statist exploitation that exists, whatever decision I
make, the most moral choice is the one that minimizes real--not formal--statism and

exploitation.
The measure of statism inheres in the functioning of the overall system, not in the
formal statism of its separate parts. A reduction in the formal statism of some separate
parts, chosen in accordance with the stategic priorities of the statist exploiters, may result
in a net increase in the overall level of statism.
Johnson's argument is essentially a restatement of Wendy McElroy's case against
"gradualism." He agrees with McElroy that much of what is conventionally dismissed as
gradualism in principle may in fact be nothing of the kind. As she put it,
Libertarianism is the political philosophy based on the principle of nonaggression. Every
human being is a self owner with inalienable rights. And gradualism is inconsistent with the
moral foundation of libertarianism.
Before proceeding, it is useful to distinguish gradualism as a policy from gradualism as a
fact of reality. This latter form of gradualism says that, try as you may, it takes time to
implement ideas. The transition to a libertarian society would not - because it could not occur overnight. This is the nature of temporal reality in which we live. If this is all that is
meant by gradualism -- if it means 'as fast as possible' -- then there is no quarrel between so
called 'gradualists' and 'abolitionists' within the movement.
This is not the formulation of gradualism with which abolitionists are concerned. When
abolitionists say that unjust laws ought to be abolished immediately, the "ought" is a moral
ought, and "immediately" means no more than as fast as possible.37

Nevertheless, some apparent grounds of principled disagreement still exist between
abolitionists and gradualists. For example, McElroy (like Johnson) sees a fundamental
conflict in principle between abolitionism and those who would refuse, if the opportunity
presented itself, to immediately eliminate all or any random part of government by
pushing Leonard Read's "magic button" (on the grounds that the result would be
"calamitous").
Abolitionists do not deny reality; they simply insist that - as a political policy, individual
rights must be given priority over all other moral and practical considerations. Libertarian
abolitionists of the nineteenth century realized that the cessation of slavery would take time,
but their message was that the deliberate continuation of slavery as a policy could not be
justified. They demanded abolition - no "ifs,"" ands," or "buts."
Those libertarians of the "ifs," "ands," or "buts" camp maintain that, in some cases,
libertarianism ought to favor the gradual phasing out of unjust laws and agencies rather than
pushing for immediate abolition, even if that immediate abolition is possible....
The defining aspect of gradualism is the answer it gives to the key question: Could it

37

Wendy McElroy, "Contra Gradualism" (November 1997) <http://www.fff.org/freedom/1197e.asp>.

ever be too soon to eliminate an unjust law or agency? The abolitionist gives an unqualified
"no." If the gradualist does not answer "yes," he answers "maybe." Taxation is theft, but
some people might starve if it ceases abruptly. (Please note that I am not denigrating concern
for starving people, but merely rejecting the use of force — and particularly governmental
force — to solve that problem.)
Here the gradualist is not denying that taxation violates rights; he is claiming that there is
a "social good" which has higher priority than individual rights. Since he cannot justify
coercion with reference to freedom itself (unless the word is radically redefined), he justifies
the willful continuation of theft by posing a dilemma of some kind. Abolition of government
laws would result in social chaos; thus, we need a "transition" period during which deliberate
rights violations would continue.38

I believe, however, that there is a principled basis for anarchists who, despite seeing
the principles of self-ownership and nonaggression as moral absolutes, would
nevertheless refrain from pushing the magic button. For one thing, I think the argument
against gradualism, as stated by both Johnson and McElroy, treats the issue of moral
agency as far simpler than it actually is.
In an article on the gradualism-abolitionism debate, Robert Capozzi referred to an
earlier argument by Stephan Kinsella, in which the latter had distinguished gradualism in
principle from gradualism in means in terms quite similar to those of Johnson and
McElroy. Kinsella argued that while libertarians were quite realistic about what they
could actually get away with at any particular time, they also had a principled objection to
"normalizing theft" even for the short term.39 In response, Capozzi described the
calamitous consequences virtually certain to follow directly on the sudden abolition of
government, and raised the question of the button-pusher's direct moral culpability in
those consequences.40
Kinsella, in turn, objected to the magic button scenario on the grounds that it was so
obviously fantastic as to be irrelevant to any real-world possibility:
For example, what do you mean, end gov't w/ a push of the button? how does the button
do this? Turn poeple into robots? change their mind? blow up go'vt buildings? the only way
to get rid of the state really is for most poeple not to believe in it. Are you saying woudl I
PREFER most poeple not believe in the state's legitimacy? Or would I push a button that
would make them change their minds? If so, how?41

He quoted another of his own statements, elsewhere, expressing dissatisfaction with
the "magic button" scenario:
38

McElroy, "Contra Gradualism."
N. Stephan Kinsella, "The Trouble With Libertarian Activism," LewRockwell.Com, January 26, 2006
<http://www.lewrockwell.com/kinsella/kinsella19.html>.
40
Robert Capozzi, "Push the Button?" The FreeLiberal Blog, January 26, 2006
<http://www.freeliberal.com/blog/archives/001831.php>.
41
Kinsella comment under Capozzi, "Push the Button?"
39

I will tell you I have no idea what this means. Magic makes no sense to me. I could only
answer such a question if the means by which the end occurs is described. For example, if
the magic button destroys all life on earth with a billion hydrogen bombs, that would be one
way of achieving your proposed end result. I would not be in favor of that. Presumably you
have some other meachanism in mind that achieves some defined result--could you explain
the mechanism, and the result? That would allow other libertarians to evaluate whether they
believe this action would be consistent with liberty or not.42

Suppose, to pose another hypothetical, that state functionaries, directly funded by
taxation and acting subject to the state's police power, are engaged on an ongoing basis in
preventing an armed H-bomb (which would otherwise explode, and which will
automatically explode upon the cessation of their activity) from exploding. Suppose,
therefore, that pushing the magic button to eliminate government would result in the Hbomb exploding in a population center an instant later. Could the button-pusher argue
legitimately that he simply removed the framework for continued aggression, and that the
deaths were entirely the government's fault--the consequence, and only the consequence,
of the government's prior statism? Or would the button-pusher be culpable in the loss of
life, to the extent that he could be said to have directly engaged in aggression against
those who died when he pushed the button knowing of the immediate consequences?
On the other hand, will the abolitionist concede that it might be advisable to postpone
pushing the button just long enough to disarm the H-bomb (even though the government
will, in the meantime, deposit another tax-funded paycheck into its functionaries' bank
account, and taxes will in the meantime be deducted from paychecks to get the loot)? If
so, the abolitionist concedes that he is, in principle, a gradualist. We're reduced to
haggling over the degree of gradualism.
In my opinion this hypothetical, as fantastic as it appears, is much more relevant to
the kinds of real-world dilemmas facing libertarians. We live in a world where the
economy and civil society have developed within a state-supported framework, so that
many of their functions would cease to operate on the sudden disappearance of the state,
as surely as a patient on a ventilator would die if the power were cut off before he could
be weaned off his dependence on the machine. The state has, in effect, interposed itself
between us and countless H-bombs controlled by dead-man triggers, so that we are
dependent at least in the short term on its continued functioning until the bombs can be
disarmed.
And in the real world, principled libertarians are faced every day with a piecemeal
pushbutton scenario, of the very kind Johnson describes. Because the mainstream
libertarian movement is largely corporate-funded and corporate-controlled, and the
establishment politicians and think tanks that push for "free market reform" are for the

42

Kinsella, "Defend Hoppe," Mises Economics Blog, February 6, 2005
<http://blog.mises.org/archives/003107.asp>.

most part corporate hirelings, in almost every case the practical proposals we are
presented with for reducing the size of government amount to just such a catastrophic
pushbutton scenario. In every case, the proposal will be to remove some secondary form
of state intervention that stabilizes the system and makes it humanly tolerable for the
majority, by constraining corporate power or by redistributing a small part of the income
of the privileged classes. In every case, also, the proposal will leave untouched (and
unmentioned) the primary forms of state intervention that support corporate power and
enable privilege in the first place.
So if we always push the button on the terms that it is presented to us, and welcome
every proposed reduction in state power (which will, for all intents and purposes, always
be selected according to the priorities of the corporate/state ruling class), we may be
reducing the levels of formal statism. But we will be increasing the levels of substantive
statism, in such a way that we will be directly implicated in the disastrous consequences
that follow immediately from our support. And with every push of the button, we will
help to make "libertarianism" and "free markets" even more of a stench in the nostrils of
working people and the poor, and to reinforce the popular image of it as the doctrine of
"pot-smoking Republicans" who want to turn the entire world into one big dioxin-soaked
sweatshop.
To the extent that I have a difference in principle with McElroy and Johnson, it hinges
on the blurring of the boundaries between abolitionism and gradualism by another,
overlapping position: realism. Even though my ultimate goal is total abolition, and I
consider nonaggression an ethical absolute, I would still refrain from pushing the button:
first, because I don't think libertarianism will be achievable without a social consensus to
bring it about; and second, because that will only occur if people understand it as not
resulting in a total catastrophe.
So I view the ethical opposition to coercion primarily as a systemic goal to be
achieved. On a purely individual level, the consequences of letting the neoliberals
dismantle the state according to their own strategic priorities, or introducing a sudden
collapse of the state via some mechanism like Rothbard's magic button, would have
consequences so disastrous as to render the non-aggression principle utterly meaningless.
The consequences would be so horrendous, IMO, as to make the whole discussion of
coercion as academic as it would be in a lifeboat scenario, or as questions of just property
rights would be to somebody stranded in a blizzard who breaks into an empty vacation
cabin. If a stateless society is to be brought about, it must be done so in a way that doesn't
sidetrack us into a mass die-off or mass enslavement on the way there.
For this reason Gustav Landauer (and his interpreter Martin Buber) were gradualists,
seeing anarchy as an ideal to be approximated ever more closely over time. They
advocated the abolition of the state only as quickly as something could take its place.
They likewise saw anarchy as achievable on a stable basis only when popular attitudes

had evolved sufficiently that the people would not simply restore the state.43
No less an abolitionist than Tucker also advocated gradualism and realism for the
same reason: "If government should be abruptly and entirely abolished to-morrow, there
would probably ensue a series of physical conflicts about land and many other things,
ending in reaction and a revival of the old tyranny."44
Tucker assumed that dissolving the state would be a long-term process, and that it
would be accompanied by a long-term educational campaign.
A system of Anarchy in actual operation implies a previous education of the people in
the principles of Anarchy, and that in turn implies such a distrust and hatred of interference
that the only band of voluntary co-operators which could gain support sufficient to enforce
its will would be that which either entirely refrained from interference or reduced it to a
minimum. This would be my answer to Mr. Donisthorpe, were I to admit his assumption of a
state of Anarchy supervening upon a sudden collapse of Archy. But I really scout this
assumption as absurd. Anarchists work for the abolition of the State, but by this they mean
not its overthrow, but, as Proudhon put it, its dissolution in the economic organism.45

So to summarize our argument so far, our approach is to scale back the state one step
at a time, starting with those functions that subsidize the rich and handicap the poor, and
finishing with those functions that cushion the poor against the harsh edges of privilege.
Meanwhile, as we dissolve the state, we replace its functions with alternative institutions
founded on free exchange and voluntary cooperation.
E. "Dissolving the State in the Economy"
Proudhon described the process as "dissolving the state in the economy" (or in the
social body). In practical terms, that meant depriving state functions of their coercive
nature so that relationships previously characterized by authority would would take on the
character of voluntary exchange:
....To dissolve, submerge, and cause to disappear the political or governmental system in
the economic system by reducing, simplifying, decentralizing and suppressing, one after
another, all the wheels of this great machine, which is called the Government or the State.46
....The political idea, the ancient notion of distributive justice, must be contradicted

43

Larry Gambone, "For Community: The Communitarian Anarchism of Gustav Landauer" (Montreal:
Red Lion Press, 2000)
<http://dwardmac.pitzer.edu/Anarchist_Archives/bright/landauer/forcommunity.html>.
44
Tucker, "Protection, and Its Relation to Rent," Instead of a Book, p. 329.
45
Tucker, "Voluntary Co-operation," Instead of a Book, p. 104.
46
Pierre-Joseph Proudhon, General Idea of the Revolution in the Nineteenth Century. Translated by John
Beverly Robinson (New York: Haskell House Publishers, Ltd., 1923, 1969 [1851]), p. 173

through and through; and that of commutative justice must be reached, which, in the logic of
history as well as of law, succeeds it.47
What really is the Social Contract? An agreement of the citizen with the government?
No, that would mean but the continuation of the same idea. The social contract is an
agreement of man with man: an agreement from which must result what we call society. In
this, the notion of commutative justice, first brought forward by the primitive fact of
exchange, and defined by the Roman law, is substituted for that of distributive justice,
dismissed without appeal by republican criticism. Translate these words, contract,
commutative justice, which are the language of the law, into the language of business, and
you have Commerce, that is to say, in its highest significance, the act by which man and man
declare themselves essentially producers, and abdicate all pretension to govern each other.
Commutative justice, the reign of contract, the industrial or economic system, such are
the different synonyms for the idea which by its accession must do away with the old
systems of distributive justice, the reign of law, or in more concrete terms, feudal,
governmental, or military rule. The future hope of humanity lies in this substitution.48
...The notion of Contract succeeding that of Government...,
Economic criticism having shown that political institutions must be lost in industrial
organization,
We may conclude without fear that the revolutionary formula cannot be Direct
Legislation, nor Direct Government, nor Simplified Government, that it is NO
GOVERNMENT.49
3. This Revolution consists in substituting the economic, or industrial, system, for the
governmental, feudal and military system, in the same way that the present system was
substituted, by a previous revolution, for a theocratic or sacerdotal system.
4. By an industrial system, we understand, not a form of government, in which men
devoted to agriculture and industry, promoters, proprietors, workmen, become in their turn a
dominant caste, as were formerly the nobility and clergy, but a constitution of society having
for its basis the organization of economic forces, in place of the hierarchy of political
powers.50
....[The notion of anarchy in politics] means that once industrial functions have taken
over from political functions, then business transactions and exchange alone produce the
social order.51

As suggested by Proudhon's reference to the "industrial system" (and his contrast of it

47

Proudhon, General Idea of the Revolution, p. 110.
Proudhon, General Idea of the Revolution, p. 112.
49
Proudhon, General Idea of the Revolution, p. 126.
50
Proudhon, General Idea of the Revolution, p. 170.
51
Proudhon, The Federal Principle, in Edwards, ed., Selected Writings, p. 91.

48

with "feudal rule"), his ideas on this subject were heavily influenced by Saint-Simon.
Proudhon's proposals for dissolving the state in the economy or in society were a direct
development of Saint-Simon's ideas of the industrial system succeeding the feudal
regime, and of state legal coercion being giving way to the "administration of things."
Elsewhere, Proudhon explicitly referred to Saint-Simon as a source of his ideas:
....For authority and politics I substituted the notion of ECONOMICS--a positive,
synthetic idea which, as I see it, is alone capable of leading to a rational, practical conception
of social order. Moreover, in this I was simply taking up Saint Simon's thesis... that society
is in the process of completing the governmental cycle for the last time; that the public
reason has become convinced that politics is powerless to improve the lot of the masses; that
the notions of power and authority are being replaced in people's minds, as in the course of
history, by the notions of labor and exchange; and that the end result is the substitution of
economic organizations for political machinery, etc., etc.52

But Proudhon developed Saint-Simon's ideas in a direction far more faithful to their
promise. Saint-Simon, in his naive belief in scientific and technical competencies that
were above political dispute, to a considerable extent anticipated the managerialism of the
New Class (with the politician giving way, in Croly's new order, to the "enlightened
administrator"). Proudhon's practical differences with Saint-Simon are suggested by his
denial above that those engaged in industry would become a "dominant caste."
Clarence Swartz, a veteran of Tucker's Liberty group, distinguished between the
individualist anarchists (narrowly defined) and mutualists. Individualists had a mostly
negative program, extending only to the abolition of the state and of all monopolies and
privileges that depended on it. Individualism had little interest in a positive program
beyond that. Mutualism, while in full agreement with the negative program of
individualism, also took an interest in the positive forms social organization might take
under liberty. Swartz, accordingly, devoted a major part of his book to speculation on
how social functions might be carried out by cooperatives, mutuals, and other forms of
voluntary association.
Individualist Anarchists... lay no claim to having a positive or constructive philosophy....
While Anarchists have demanded the destruction of the four great monopolies (money, land,
tariff, and patent and copyright), which object Mutualists share with them, their program for
the accomplishment of that purpose has been the abolition of the State. That consummation
is still far off; and Mutualists... believe in working toward the gradual elimination of the four
great monopolies through a peaceful substitution of voluntary institutions for compulsory
ones as an ever and ever greater measure of freedom is secured.53

As Martin Buber said (in Larry Gambone's paraphrase): "It is the growth of a real
organic structure, for the union of persons and families into various communities and of
communities into associations, and nothing else, that 'destroys' the State by displacing

52
53

Philosophy of Progress, in Edwards, ed., pp. 90-91.
Clarence Swartz, What is Mutualism?, p. 37.

it."54
F. Counter-Institutions
Going back to Proudhon, anarchism (and especially mutualism) has emphasized the
importance of (in the wonderful Wobbly phrase) "building the structure of the new
society within the shell of the old."
It is the substitution of one system for another, a new organism replacing one that is outworn.
But this change does not take place in a matter of minutes…. It does not happen at the
command of one man who has his own pre-established theory, or at the dictate of some
prophet. A truly organic revolution is a product of universal life…. It is an idea that is at first
very rudimentary and that germinates like a seed; an idea that is at first in no way remarkable
since it is based on popular wisdom, but one that… suddenly grows in a most unexpected
fashion and fills the world with its institution.55

Even Tucker, for all his professed agnosticism concerning the outlines of a stateless
society, proposed the building of counterinstitutions as part of the present-day anti-state
agenda.
It is just because Mr. Walker’s earnest desire for a fair practical test of Anarchistic principles
cannot be fulfilled elsewhere than in the very heart of existing industrial and social life that
all these community attempts are unwise. Reform communities will either be recruited from
the salt of the earth, and then their success will not be taken as conclusive, because it will be
said that their principles are applicable only among men and women well-nigh perfect; or,
with these elect, will be a large admixture of semi-lunatics among whom, when separated
from the great mass of mankind and concentrated by themselves, society will be
unendurable, practical work impossible, and Anarchy as chaotic as it is generally supposed to
be. But in some large city fairly representative of the varied interests and characteristics of
our heterogenous cvilization let a sufficiently large number of earnest and intelligent
Anarchists, engaged in nearly all the different trades and professions, combine to carry on
their production and distribution on the cost principle and to start a bank through which they
can obtain a non-interest-bearing currency for the conduct of their commerce and dispose
their steadily accumulating capital in new enterprises, the advantages of this system of affairs
being open to all who should choose to offer their patronage,—what would be the result?
Why, soon the whole composite population, wise and unwise, good, bad, and indifferent,
would become interested in what was going on under their very eyes, more and more of them
would actually take part in it, and in a few years, each man reaping the fruit of his labor and
no man able to live in idleness on an income from capital, the whole city would become a
great hive of Anarchistic workers, prosperous and free individuals.56

54

Gambone, "For Community."
Proudhon, On the Political Capacity of the Working Classes (1865), in Selected Writings of Proudhon.
Edited by Stewart Edwards. Translated by Elizabeth Fraser (Garden City, N.Y.: Anchor, 1969), p. 177.
56
Tucker, "Colonization," Instead of a Book, pp. 423-424.
55

Brian Dominick, as we have already seen, placed a great deal of emphasis on counterinstitutions. He described the process of building counter-institutions, within the shadow
of existing institutional framework, in considerable detail:
Generally speaking, dual power is the revolutionary organization of society in its preinsurrectionary form. It is the second power -- the second society -- operating in the shadows
of the dominant establishment. It seeks to become an infrastructure in and of itself, the
foundations of an alternative future....
The great task of grassroots dual power is to seek out and create social spaces and fill
them with liberatory institutions and relationships. Where there is room for us to act for
ourselves, we form institutions conducive not only to catalyzing revolution, but also to the
present conditions of a fulfilling life, including economic and political self-management to
the greatest degree achievable. We seek not to seize power, but to seize opportunity viz a viz
the exercise of our power.
Thus, grassroots dual power is a situation wherein a self-defined community has created
for itself a political/economic system which is an operating alternative to the dominant
state/capitalist establishment. The dual power consists of alternative institutions which
provide for the needs of the community, both material and social, including food, clothing,
housing, health care, communication, energy, transportation, educational opportunities and
political organization. The dual power is necessarily autonomous from, and competitive with,
the dominant system, seeking to encroach upon the latter's domain, and, eventually, to
replace it.57

Peter Staudenmeier used the term "social counter-power" to describe essentially the
same concept, breaking it down further into takes the concrete expressions of
"prefigurative politics" and "counterinstitutions."
Prefigurative politics is a fancy term that just means living your values today, instead of
waiting until "after the revolution"--in fact it means beginning the revolution here and now to
the extent possible. This might be called the everyday aspect of social counterpower. And
counterinstitutions, of which co-ops are often an example, are the structural aspects of social
counter-power.58

Jonathan Simcock, on the Total Liberty webpage, described a vision of Evolutionary
Anarchism that included
...Worker Co-operatives, Housing Co-operatives, self-employment, LETS schemes,
Alternative Currencies, Mutual Banking, Credit Unions, tenants committees, Food Cooperatives, Allotments, voluntary organizations, peaceful protest and non-violent direct
action and a host of similar activities are the means by which people begin to "behave
differently", to go beyond Anarchist theory, and begin to build the elements of a new

57
58

Dominick, "An Introduction to Dual Power Strategy."
Peter Staudenmaier, "Anarchism and the Cooperative Ideal," The Communitarian Anarchist 1:1.

society.59

G. Counter-Institutions and Counter-Economics
Samuel Edward Konkin proposed, as the primary form of revolutionary activity,
"bring[ing] more and more people into the counter-economy and lower[ing] the plunder
available to the State...."
Slowly but steadily we will move to the free society turning more counter-economists
onto libertarianism and more libertarians onto counter-economics, finally integrating theory
and practice. The counter-economy will grow and spread to the next step..., with an everlarger agorist sub-society embedded in the statist society.60

As the agorist counter-society grew and coalesced, entrepreneurs would increasingly
provide black market insurance, arbitration and protection services, until economic
counter-institutions eventually comprised the entire necessary infrastructure for
maintaining peace and order in the successor society. In time this agorist society would
come to predominate in contiguous geographical areas, and be capable of organizing open
defense against the state. The state, increasingly starved of economic resources and
weakened by counter-economic resistance even within areas still under its control, would
find its ability to suppress the agorist counter-society dwindling just as its desire to do so
would become most urgent. From this point, the correlation of forces would shift until
the state was relegated to pockets of control within a larger agorist society, and would
suffer a continued erosion of control until its eventual collapse.61
[Zinn]
Tucker anticipated counter-economics in some ways with his writing on passive
resistance.
But, if individuals can do much, what shall be said of the enormous and utterly irresistible
power of a large and intelligent minority, comprising say one-fifth of the population in any given
locality? I conceive that on this point I need do no more than call Edgeworth’s attention to the
wonderfully instructive history of the Land League movement in Ireland, the most potent and
instantly effective revolutionary force the world has ever known so long as it stood by its original
policy of Pay No Rent, and which lost nearly all its strength the day it abandoned that policy....
But it was pursued far enough to show that the British government was utterly powerless before
it; and it is scarcely too much to say, in my opinion, that, had it been persisted in, there would not
to-day be a landlord in Ireland. It is easier to resist taxes in this country than it is to resist rent in
Ireland; and such a policy would be as much more potent here than there as the intelligence of

59

Jonathan Simcock, "Editorial for Current Edition," Total Liberty 1:3 (Autumn 1998).
Samuel Edward Konkin III, New Libertarian Manifesto, pp. 22.
61
This is a summary of the overall theme of the work, but is the focus in particular of Chapters Three
"Counter-Economics: Our Means" and Four "Revolution: Our Strategy."
60

the people is greater, providing always that you can enlist in it a sufficient number of earnest and
determined men and women. If one-fifth of the people were to resist taxation, it would cost more
to collect their taxes, or try to collect them, than the other four-fifths would consent to pay into
the treasury.62

H. The Two Economies and the Shifting Correlation of Forces
Economic counter-institutions, unfortunately, work within the framework of a larger
corporate capitalist economy. They compete in markets in which the institutional culture
of the dominant firms is top-down and hierarchical, and are in great danger of absorbing
this institutional culture themselves. That's why you have a non-profit and cooperative
sector whose management is often indistinguishable from its capitalist counterparts:
prestige salaries, middle management featherbedding, bureaucratic irrationality, and
slavish adherence to the latest motivational/management theory dogma. The problem is
exacerbated by a capitalist financial system, which extends positive reinforcement (in the
form of credit) to firms following an orthodox organizational model (even when bottomup organization is far more efficient).
The solution is to promote as much consolidation as possible within the countereconomy. We need to get back to the job of "building the structure of the new society
within the shell of the old." A great deal of production and consumption already takes
place within the social or gift economy, self-employment, barter, etc. The linkages need
to be increased and strengthened between those involved in consumers' and producers' coops, self-employment, LETS systems, home gardening and other household production,
informal barter, etc. What economic counter-institutions already exist need to start
functioning as a cohesive counter-economy.
That's what Moses Coady had in mind, for example, in building the Antigonish
system:
Away and beyond establishing co-operatives on a piecemeal basis, Coady looked
forward to the wider vision which he and his associates referred to as 'the Big Picture'.
Within the overall framework of 'the Big Picture', consumer co-operatives would source their
requirements from co-operative wholesale societies. The wholesale societies in turn would
be supplied by factories which were the property of the movement. Coady's ultimate
objective was an integrated system of co-operatives which would comprise a 'Middle Way' or
'Third Sector' between capitalism and communism....
Coady saw consumer co-operation as embracing 'a vast field of business--retailing,
wholesaling, manufacturing, money and credit and the wide range of services necessary to
life in a modern society'.... 'The cooperative dream... is to cover the Maritimes with cooperatives and set the wheels of industry turning in our factories'.63

62
63

Tucker, "The Power of Passive Resistance," Instead of a Book, pp. 412-413.
Race Matthews, Jobs of Our Own: Building a Stakeholder Society--Alternatives to the Market & the

A good concrete example of Coady's vision in practice was the community of Larry's
River, where in 1928 people were paying $37.00 per thousand feet of lumber.
That year they built a community sawmill. The building and machinery cost $2,000. They
began to manufacture their own rough lumber, boat timber, laths and shingles. By working
during the winter months they can now bring logs to this community sawmill and obtain
lumber at $7.50 per thousand. Some of them work at the mill and pay the $7.50 for their
lumber with labor. The establishment of the sawmill made it possible for the residents to
repair their homes and to build ten or more new houses and several cooperative plants.
....In 1932 they built a cooperative lobster factory; in 1933 they established a credit union
and in 1934 a consumers' cooperative; in 1934, too, they organized a cooperative blueberrycanning industry; in 1938 they erected and operated a cooperative fish plant.64

Race Matthews sees the Mondragon system, with its own credit arm allocating capital
between enterprises, as a model for cooperative integration.
It takes no great leap of the imagination to envisage a third step forward, whereby the
Desjardins credit unions would begin to give preference in their allocation of development
capital to co-operatives which could count on being advantaged like those in Mondragon by
a relative freedom from the basic agency dilemma. Nor is it difficult to envisage the credit
union movement more generally establishing structures and acquiring skills with which to
support recipients of commercial loans through [advisory and support] services such as those
of the Empresarial Division of the Caja Laboral [credit union] in the Mark I phase of
Mondragon.65

Euclides André Mance describes it as building "solidarity-based productive chains."
The strategy
entails that the different solidarity-based operators involved in the productive chain choose
solidarity-based suppliers, if available, over other types of suppliers, replacing inputs with a
view towards attaining the goal of ecological and social sustainability. If those inputs or
suppliers do not exist, local networks should themselves undertake the production of such
items. When the required investments are beyond the possibilities of the local networks, or
the level of consumption of the local network is not enough to provide for the viability of the
new undertaking, the regional networks should evaluate the best options, and thus it should
be in increasingly horizontal approaches.
In boosting solidarity in productive chains, the organization of final and productive
consumption is fundamental. The activity of consumer cooperatives and other organized
consumer groups proves that by organizing themselves, consumers are able to increase their

State (Annandale, NSW, Australia: Pluto Press, 1999), pp. 151-152.
64
Moses Coady, Masters of Their Own Destiny: The Story of the Antigonish Movement of Adult Education
Through Economic Cooperation (New York, Evanston, and London: Harper & Row), p. 47.
65
Matthews, Jobs of Our Own, p. 242.

purchasing power and improve their quality of life, while at the same time -if they belong to
solidarity-based networks- making it possible to commercialize the goods produced by
solidarity-based ventures. Thus the novelty of this system is that productive chains can be
boosted through a solidarity approach starting from the final and productive consumption,
insofar as supply undertakings are selected according to technical, environmental and social
considerations. That selection is based on the notion that the price paid by consumers for the
final product not only spurs the production of the enterprises that sell the final product, but
also indirectly spurs the production of the different operators that supply an input
incorporated in the final product consumed or any other element used in the process of
production of that good or service. Thus, the consumption of the final product is what
enables companies reckon the profits corresponding to that part of the product consumed.
Meanwhile, as the solidarity-based network boosts the productive chain, creating supply
ventures, the profit that was previously accumulated in those segments of the productive
chain becomes, thus, a surplus that goes back to feed the expansion of the network. In this
way, a network that organizes ventures capable of generating a certain amount of surplus can
grow by collectively reinvesting such surpluses, engaging in new ventures and boosting the
productive chain of the final product itself. So, by selling the same amount of the final
product, there can be a substantial increase in the number of workers in the network, the
number of solidarity-based productive ventures, the volume of income distributed in the
network as wages, the surplus generated in the network and its assets....
In this way it is possible to generate the conditions necessary to progressively replace the
relations of capitalist accumulation and to expand production and consumption relations
based on solidarity, sharing the surplus generated, creating new jobs, increasing consumption
among participants and developing a great diversity of products and services that ensure the
well-being of all those involved in solidarity-based labor and consumption.66
The more the solidarity economy expands and diversifies, and its flows and connections
improve, the smaller the need to relate to non-solidarity actors. The underlying logic is to
progressively reduce relations with non-solidarity providers and distributors, putting in their
place relations with solidarity actors who then become integrated with the networks. While
relating to non-solidarity actors, solidarity economy initiatives strive to select the socially
and ecologically ‘least bad’ providers and distributors.67

As Hernando de Soto pointed out in The Mystery of Capital, the resources already
available to us are enormous. If we could leverage and mobilize them sufficiently, they
might be made to function as a counterweight to the capitalist economy. For example: the
average residential lot, if subjected to biointensive farming methods, could supply the
majority of a family's vegetable needs. And what's more important, the total labor
involved in doing this would be less than it takes to earn the money to buy equivalent
produce from the supermarket. The average person could increase his independence of
the wage-system, improve the quality of his food, and reduce his total work hours, all at

66

Euclides André Mance, "Solidarity-Based Productive Chains" (Curitiba: l'Institut de Philosophie de la
Libération, November 2002) <http://www.solidarius.com.br/mance/biblioteca/cadeiaprodutiva-en.pdf>.
67
Euclides André Mance, "Solidarity Economics (Curitiba: l'Institut de Philosophie de la Libération,
March 2007) <http://www.solidarius.com.br/mance/biblioteca/turbulence-en.pdf>.

once. This is an ideal theme for mutualist propaganda.
A key objective should be building the secondary institutions and support framework
we need to make the resources we already have more usable. Most people engage in a
great deal of informal production to meet their own needs, but lack either access or
awareness of the institutional framework by which they might cooperate and exchange
with others involved in similar activities. Expanding LETS systems and increasing public
awareness of them is vital. Every need that can be met by producing for oneself, or
exchanging one's own produce for that of a neighbor, increases the amount of one's total
consumption needs that can be met without depending on employment at someone else's
whim. If an organic gardener lives next door to a plumber and they exchange produce for
plumbing work, neither one can provide an outlet for the other's entire output. But both, at
least, will have a secure source of supply for both his vegetables and plumbing needs, and
an equally secure market for the portion of his own output consumed by the other. The
more different trades come into the system, the larger the proportion of total needs that
can be met outside the framework of a job.
Ultimately, we need a cooperative alternative to the capitalists' banking system, to
increase the cooperative economy's access to its own mutual credit. This is illegal, under
the terms of capitalist banking law. The banking system is set up to prevent ordinary
people from leveraging their own property for interest-free credit through mutual
banking. Gary Elkin argued that it might be possible to slip mutual banking in through the
back door, and evade the state's legal restrictions on free banking, by piggybacking a
mutual bank on a LETS system. Members of a LETS system might start out by extending
store credit against the future labor of other members, and expand from there.
The proliferation of architectures for Internet microlending systems, e-LETS systems,
and the like, combined with increasingly powerful encryption, may be rapidly leading us
to a singularity beyond which independent exchange and credit systems can operate in
direct defiance of the state, and support an alternative economy beyond the reach of the
state's taxation and the surveillance of its regulatory apparatus.
The capital and land of the rich is worthless to them without a supply of labor to
produce surplus value. And even if they can find labor, their ability to extract surplus
value from their labor force depends on a labor market that favors buyers over sellers.
Anything that marginally increases the independence of labor and reduces its dependence
on wages, and marginally reduces the supply of labor available to capitalists and
landlords, will also marginally reduce the rate of profit and thus make their land and
capital less profitable to them. The value of land and capital to landlords and capitalists
depends on the ability to hire labor on their own terms. Anything that increases the
marginal price of labor will reduce the marginal returns on capital and land.
What's more, even a partial shift in bargaining power from capital to labor will
increase the share of their product that wage-workers receive even in capitalist industry.
The individualist anarchists argue that a removal of special legal privileges for capital

would increase the bargaining power of labor until the rate of profit was effectively zero,
and capitalist enterprises took on the character (de facto) of workers' co-ops.
And the owning classes use less efficient forms of production precisely because the
state gives them preferential access to large tracts of land and subsidizes the inefficiency
costs of large-scale production. Those engaged in the alternative economy, on the other
hand, will be making the most intensive and efficient use of the land and capital available
to them. So the balance of forces between the alternative and capitalist economy will not
be anywhere near as uneven as the distribution of property might indicate.
If everyone capable of benefiting from the alternative economy participates in it, and
it makes full and efficient use of the resources already available to them, eventually we'll
have a society where most of what the average person consumes is produced in a network
of self-employed or worker-owned production, and the owning classes are left with large
tracts of land and understaffed factories that are almost useless to them because it's so
hard to hire labor except at an unprofitable price. At that point, the correlation of forces
will have shifted until the capitalists and landlords are islands in a cooperative sea--and
their land and factories will be the last thing to fall, just like the U.S Embassy in Saigon.
This is something like the theory behind Vinay Gupta's principle, stated in "The
Unplugged," of "buying out at the bottom" (see Chapter Fifteen), and Ebenezer Howard's
plan for building his garden cities on cheap rural land and using it with maximum
efficiency. The idea was that workers would take advantage of the rent differential
between city and country, make more efficient use of underused land than the great
landlords and capitalists could, and used the surplus income from production in the new
cities (collected as a single tax on the site value of land) for quickly paying off the
original capital outlays.68 When the debt was retired, the land value tax revenues
previously used to pay principal and interest would fund an old age pension and welfare
state.69 The mechanism Howard proposed for the towns, incidentally, anticipated Spencer
Heath's ideas of voluntary Georgism: the project's undertakers would buy a large tract of
cheap rural land as the site for a town, and the community would subsequently derive its
entire tax revenue from the appreciating land value as the site was developed.70 Howard
also anticipated something like counter-economics: working people living within his
garden cities, working through building societies, friendly societies, mutuals, consumer
and worker cooperatives, etc., would find ways to employ themselves and each other
outside the wage system.
It is idle for working-men to complain of this self-imposed exploitation, and to talk of
nationalizing the entire land and capital of this country under an executive of their own class,

68

Ebenezer Howard, To-Morrow: A Peaceful Path to Real Reform. Facsimile of original 1998 edition,
with introduction and commentary by Peter Hall, Dennis Hardy and Colin Ward (London and New York:
Routledge, 2003), pp. 32, 42 [facsimile pp. 13, 20-21].
69
Howard, To-Morrow, p. 44 [facsimile p. 22].
70
Howard, To-Morrow, pp. 30-33 [facsimile pp. 12-13].

until they have first been through an apprenticeship at the humbler task of organising men
and women with their own capital in constructive work of a less ambitious character--until
they have assisted far more largely than they have yet done in building-up capital not to be
wasted in strikes, or employed by capitalist in fighting strikers, but in securing homes and
employment for themselves and others on just and honorable terms. The true remedy for
capitalist oppression where it exists, is not the strike of no work, but the strike of true work,
and against this last blow the oppressor has no weapon. If labour leaders spent half the
energy in co-operative organisation that they now waste in co-operative disorganisation, the
end of our present unjust system would be at hand.71

What impedes the actual gelling together of the resources we already have is not the
absence of such technical architectures and umbrella organizations, but the proliferation
of them. No single framework has emerged as the standard. For example, there are more
concrete projects out there than I can account for providing encrypted electronic
alternative currencies, P2P credit systems outside of the state capitalist banking system,
etc. Just about any of them, if it could come to the top through some sort of invisible hand
mechanism and become widely known among all the sub-movements out there, would be
serviceable as a structure for exchange within the alternative economy. But none of them
has. There are lots of good projects based on promising technology, that are largely
unheard of outside a small subculture of devotees. Likewise, there are lots of attempts at
creating federal organizations of worker cooperatives, intentional communities, LETS
systems, and the like, many of them self-consciously aimed at providing an umbrella
organization for the larger alternative economy. But again, they coexist as dozens of
separate ghettoes.
One thing that might make a difference is the united support of some particular
federal organization, by a sufficient number of major movements within the alternative
economy, to trigger a power law threshold and provide an organizational core around
which the rest of the movement could coalesce. That was the significance of the
founding convention of the I.W.W., at Chicago convention in 1905--otherwise known as
"The Continental Congress of the Working Class." Big Bill Haywood of the Western
Federation of Miners (which formed the actual organizational nucleus of the I.W.W. as a
labor union) was joined by De Leon of the Socialist Labor Party and Debs of the
American Socialist Party, along with representatives of other radical unions--not to
mention the charismatic figure of Mother Jones, whose presence provided the movement
with something like "the Pope's divisions" in moral weight.
One especially promising project, in my opinion, is the Solidarity Economy
Network,72 whose purpose is essentially what I have described in the paragraphs above:
to provide an umbrella organization for networking alternative economy organizations
like cooperatives, LETS systems, community supported farming, etc., and facilitate their
coalescence into a single counter-economy.

71
72

Howard, To-Morrow, pp. 108, 110 [facsimile pp. 85-86].
<http://www.populareconomics.org/ussen/>

The Solidarity Economy Network emerged as a relatively low-visibility
organizational project from a series of Solidarity Economy caucuses at the June U.S.
Social Forum in Atlanta. But there's reason to hope it will emerge from its obscurity. It
includes some especially prominent figures in the alternative economy movement. Its
initial Coordinating Committee included Dan Swinney of the Center for Labor and
Community Research,73 Jessica Gordon Nembhard and Ethan Miller of Grassroots
Economic Organizing,74 Melissa Hoover and John Parker of the U.S. Federation of
Worker Cooperatives,75 and Cliff Rosenthal of the National Federation of Community
Development Credit Unions.76
The most promising strategy for anyone involved in the alternative economy, who
wants to promote the coalescence of alternative institutions into a coherent countereconomy, is probably to join the organization that shows the most promise as a common
federal center for the movement (in my opinion, right now that's the SEN), and then work
from within to promote links to and cross-communication with all the other movements.
The most important thing is to do it under the auspices of some existing would-be
umbrella organization that shows promise, like the SEN, and then work within that
organization to promote cooperation with the rest of the alternative economy movement.
I. Privatizing State Property
One especially important question, in any agenda of dissolving the state, involves the
privatization of state property. The typical "libertarian" proposal for this, of course, is
simply to sell it off to private corporations--on the most favorable terms the corporations
can get. This has been the universal pattern of neoliberal "free market reform" since
Pinochet "liberalized" Chile's economy. It was central to the so-called "small
government" agendas of Thatcher and Reagan. It is a major component of every
"structural adjustment" program imposed by the World Bank and IMF. It has been the
leitmotif of Naomi Klein's "disaster capitalism" wherever it has appeared--and it has been
ubiquitous.
In fact, this so-called "privatization" agenda could more accurately be described as
looting.
For starters, the state industry, services and infrastructure were often built in the first
place--at taxpayer expense--to provide subsidized support to the corporate capitalist
economy. In Western mixed economies (e.g. Bismarck's "Junker socialism" and the UK
under Labour), the nationalization of transportation and extractive industries was a sort of

73

<http://www.clcr.org/index.php>
<http://www.geo.coop/>
75
<http://www.usworker.coop/>
76
<http://www.natfed.org/i4a/pages/index.cfm?pageid=1>

74

"lemon socialism." Its purposes (as described by Engels in Anti-Duhring) were those of
the capitalist class in control of the state:
At a further stage of evolution this form [the joint-stock company] also becomes insufficient:
the official representative of capitalist society--the state--will ultimately have to undertake
the direction of production. This necessity for conversion into state property is felt first in the
great institutions for intercourse and communication--the post office, the telegraphs, the
railways.77

In the Third World, such state-subsidized infrastructure was created primarily to serve
the needs of Western capital. According to Gabriel Kolko's 1988 estimate, almost two
thirds of the World Bank's loans since its inception had gone to transportation and power
infrastructure.78 A laudatory Treasury Department report referred to such infrastructure
projects (comprising some 48% of lending in FY 1980) as "externalities" to business, and
spoke glowingly of the benefits of such projects in promoting the expansion of business
into large market areas and the consolidation and commercialization of agriculture.79
What's more, the World Bank created what amounted to "Iron Triangles" with
Western TNCs and technocratic elites in (often politically unaccountable) Third World
governments, and promoted the running up of insane debts.80 These debts, in turn, were
later used to blackmail the host governments into adopting "structural adjustment
programs" which sold the infrastructure off (at fire sale prices) the very same
multinational corporate interests it was created to serve in the first place.
Whether in the West, the Third World, or the former Soviet bloc, the state almost
always makes its "privatization" policy in cahoots with the corporate interests buying up
the assets. Joseph Stromberg described the process, as it has been used by the Iraq
Provisional Authority, as "funny auctions, that amounted to new expropriations by
domestic and foreign investors...." Such auctions of state properties will "likely lead... to a
massive alienation of resources into the hands of select foreign interests."81
Sean Corrigan compared the corporate interests buying up state assets to
carpetbaggers:
Does he [Treasury Secretary O'Neill] not know that the whole IMF-US Treasury carpet-

77

Friedrich Engels, Anti-Dühring, in Marx and Engels Collected Works (New York: International
Publishers, 1987), v. 25, p. 265.
78
Gabriel Kolko, Confronting the Third World: United States Foreign Policy 1945-1980 (New York:
Pantheon Books, 1988), p. 120.
79
United States Participation in the Multilateral Development Banks in the 1980s. Department of the
Treasury (Washingon, DC: 1982), p. 9.
80
See, e.g., Bruce Rich, "The Cuckoo in the Nest: Fifty Years of Political Meddling by the World Bank,"
The Ecologist (January/February 1994).
81
Joseph R. Stromberg, "Experimental Economics, Indeed" Ludwig von Mises Institute, January 6, 2004.
<http://www.mises.org/fullstory.asp?control=1409>

bagging strategy of full-spectrum dominance is based on promoting unproductive
government-led indebtedness abroad, at increasingly usurious rates of interest, and then-either before or, more often these days, after, the point of default--bailing out the Western
banks who have been the agents provocateurs of this financial Operation Overlord, with
newly-minted dollars, to the detriment of the citizenry at home?
Is he not aware that, subsequent to the collapse, these latter-day Reconstructionists must
be allowed to swoop and to buy controlling ownership stakes in resources and productive
capital made ludicrously cheap by devaluation, or outright monetary collapse?
Does he not understand that he must simultaneously coerce the target nation into
sweating its people to churn out export goods in order to service the newly refinanced debt,
in addition to piling up excess dollar reserves as a supposed bulwark against future
speculative attacks (usually financed by the same Western banks’ lending to their Special
Forces colleagues at the macro hedge funds) - thus ensuring the reverse mercantilism of
Rubinomics is maintained?82

Catherine Austin Fitts' "tapeworm economy" (otherwise known as "Break It-Fix It")
seems a particularly apt name for this phenomenon.
• Phase One--Break It: Private syndicates make money destroying a place through
organized crime, covert operations, warfare or a variety of both;
• Phase Two- Buy It: The profit generated from breaking it is used to buy or seize
“legal control” at a discount;
• Phase Three- Fix It: Government funding, credit and subsidies are then used to “fix
it” while harvesting remaining assets, including with narcotics trafficking, sex slavery and
any other form of liquidating the human, intellectual, environmental and physical capital in a
place:
• Phase Four—Declare Victory: Victory is then declared and a flow of foundation and
academic grants funded by the “break it-fix it” profits generate awards, photo opportunities
and official archives and documentation for the perpetrators to be admired for their bringing
of advanced civilization to the natives.83

The connivance between the state and the corporate purchasers of its assets doesn't
stop with the sweetheart deal on the price. First, in the period leading up to the sale,
governments often sink more money in state assets to make them attractive to buyers than
they wind up getting from the sale.
Instead of encouraging investment, privatisation has left governments offering

82

Sean Corrigan, "You Can't Say That!" LewRockwell.Com, August 6, 2002.
<http://www.lewrockwell.com/corrigan/corrigan13.html>
83
Catherine Austin Fitts, "The American Tapeworm," Solari, April 2003
<http://www.solari.com/articles/the_american_tapeworm.html>.

increased concessions to entice investors to acquire their assets.... For example, between
1991and 1998 the Brazilian Government made some US$85 billion through the sale of
state run enterprises. However, over the same period, it spent US$87 billion ‘preparing’
the companies for privatisation.
Rather than being a major source of finance, private contractors are committing little
of their own capital and are instead looking to municipalities, central government or
donor governments/institutions to provide the money....
In fact, in many cases foreign companies are relying on the [government foreign aid]
donor community to bail them out when they get it wrong.84

In short, governments are paying crony capitalists to take the assets off their hands.
And second (as "Bill," a commenter on my blog observed), after privatization the new
owner's first order of business is likely to be asset-stripping:
The true sin of nationalised industry is that the marketable value of its assets compared with
its profits tend to be too high - there is no merger/bankrupcy mechanism to adjust this. When
firms get privatised it's often hugely profitable to just sell off capital assets and pare back the
service rather than concentrate on users needs. Over here, former British rail firms made
most of their early dividends payouts from land sales, not service improvements.... They also
cut the staff back, which left them prone to the massive pay demands of the few remaining
drivers - they did well...85

Again, "tapeworm economy" seems an especially apt term for an economy based on
stripping, liquidating, and dismantling assets at taxpayer expense.
The overall level of statism associated with such "privatization" is not diminished,
and may actually be increased. Some forms of activity may be formally shifted from the
state budget to the nominal "private" sector. But the activities take place within a
framework of increased state protections.
While the privatisation of state industries and assets has certainly cut down the direct
involvement of the state in the production and distribution of many goods and services, the
process has been accompanied by new state regulations, subsidies and institutions aimed at
introducing and entrenching a "favourable environment" for the newly-privatised
industries....
Moreover, "states are still massively present in the processes of production, distribution

84

Clare Joy and Peter Hardstaff, Dirty aid, dirty water: The UK government's push to privatise water and
sanitation in poor countries (London: World Development Movement, February 2005), p. 23
<http://www.wdm.org.uk/resources/reports/water/dadwreport01022005.pdf>.
85
Comment under Kevin Carson, "Public Services, 'Privatized' and Mutualized," Mutualist Blog: Free
Market Anticapitalism, March 29, 2005 <http://mutualist.blogspot.com/2005/03/public-services-privatizedand.html>.

and exchange", not least through framing taxation policy; setting interest rates (where
independent central banks have not been introduced) or interest rate policy; directing
subsidies to sectors of industry; farming out government procurement contracts; awarding
franchises for privatised industries; setting pollution and health standards; and funding
infrastructure projects.86

In other words the Pinochet/Thatcher/Reagan/Adam Smith Institute version of "free
market reform" is, as Sean Gabb pointed out, just a new version of fascist economics.
Nominally "private" business operates within a web of subsidies and protections provided
by the state, in order to provide a secure level of profit without any interference from an
unfettered market.
As reconstructed in the 1980s - partly by the Adam Smith Institute - the new statism is
different. It looks like private enterprise. It makes a profit. Those in charge of it are paid vast
salaries, and smugly believe they are worth every penny....
But for all its external appearance, the reality is statism. And because it makes a profit, it
is more stable than the old. It is also more pervasive. Look at these privatised companies,
with their boards full of retired politicians, their cosy relationships with the regulators, their
quick and easy ways to get whatever privileges they want....
As with National Socialism in Germany, the new statism is leading to the abolition of the
distinction between public and private.87

And as David Green argues in Reinventing Civil Society, Thatcherism wasn't merely
fake privatization; to the extent that it was genuine privatization at all, it took the
narrowest possible view of what "privatization" meant, equating it to corporate delivery
of service to passive "customers":
During the Thatcher years there were many who feared that the welfare state would be
'dismantled'. In fact, the welfare state remained almost unscathed because the most radical
reforms attempted by Thatcher administrations did not even aspire to 'dismantle' the welfare
state. Thatcher Governments often used market rhetoric, such as 'money following the
patient's choice' or 'money following the parents' choice of school'; but in reality ministers
were working with a very restricted idea of the market. The NHS reforms, for instance, led
to an 'internal market' not all that different from any other government procurement
programme. Thatcher Governments also worked with too narrow a view of human character.
The education reforms, for example, were based on a consumerist view of parents as
outsiders standing in judgment of schools, rather than as co-partners in the long process of
equipping their own children with the skills, knowledge and personal qualities necessary in a
free, open and tolerant society.88

86

Nicholas Hildyard, "The Myth of the Minimalist State: Free Market Ambiguities," The Corner House
Briefing No. 5 (March 1998) <http://www.thecornerhouse.org.uk/item.shtml?x=51960>.
87
Sean Gabb, "Dr Pirie Changes Trains (But Continues in the Same Direction)," Free Life Commentary,
Issue Number 18 (July 3, 1998) <http://www.seangabb.co.uk/flcomm/flc018.htm>.
88
David Green, Reinventing Civil Society (London: Institute of Economic Affairs, Health and Welfare

Murray Rothbard proposed a far different kind of privatization. In a 1969 piece for
The Libertarian Forum, he wrote:
government property is always and everywhere fair game for the libertarian; for the
libertarian must rejoice every time any piece of governmental, and therefore stolen, property
is returned by any means necessary to the private sector.... Therefore, the libertarian must
cheer any attempt to return stolen, governmental property to the private sector: whether it be
in the cry, "The streets belong to the people", or "the parks belong to the people", or the
schools belong to those who use them, i.e. the students and faculty. The libertarian believes
that things not properly owned revert to the first person who uses and possesses them, e.g.
the homesteader who first clears and uses virgin land; similarly, the libertarian must support
any attempt by campus "homesteaders," the students and faculty, to seize power in the
universities from the governmental or quasi-governmental bureaucracy.89

Rothbard argued that "the most practical method de-statizing is simply to grant the
moral right of ownership on the person or group who seizes the property from the State."
This would entail, in most cases, treating the State's property as vacant or unowned, and
recognizing the homestead rights of those actually using it. In the case of "public"
universities,
the proper owners of this university are the "homesteaders", those who have already been
using and therefore "mixing their labor" with the facilities.... This means student and/or
faculty ownership of the universities.90

This principle of homesteading State property by workers or clients is amenable to
wide application. Larry Gambone has proposed "mutualizing" public services as an
alternative to corporate privatization. This means decentralizing control of, say, schools,
police, hospitals, etc., to the smallest feasible local unit (the neighborhood or community)
and then placing them under the democratic control of their clientele. For example, the
people of a town might abolish the city-wide school board, and place each school under a
board of selectmen responsible to the pupils' parents. Ultimately, compulsory taxation
would be ended and the schools run on user fees. In practical terms, mutualizing is more
or less equivalent to reorganizing all the State's activities as consumer cooperatives.91
During the fall of the Soviet empire in 1989-91, Rothbard advocated applying the
same homestead principle to state property in post-communist societies. Rather than the
corporate looting overseen by Jeffrey Sachs, he proposed a "syndicalist" solution:
It would be far better to enshrine the venerable homesteading principle at the base of the new
desocialized property system. Or, to revive the old Marxist slogan: "all land to the peasants,

Unit, 1993), p. 1.
89
"The Student Revolution," The Libertarian (soon renamed The Libertarian Forum), May 1, 1969, p. 2.
90
"Confiscation and the Homestead Principle," The Libertarian Forum, June 15, 1969, p. 3.
91
Mutualize! website. <http://www.geocities.com/vcmtalk/mutualize>

all factories to the workers!" This would establish the basic Lockean principle that ownership
of owned property is to be acquired by "mixing one's labor with the soil" or with other
unowned resources. Desocialization is a process of depriving the government of its existing
"ownership" or control, and devolving it upon private individuals. In a sense, abolishing
government ownership of assets puts them immediately and implicitly into an unowned
status, out of which previous homesteading can quickly convert them into private
ownership.92

The question of genuine privatization also arises in regard to existing, nominally
"private" property titles, that amount in practice to state property: i.e., "private" property
acquired through statist means, and "private" enterprises built with profits derived
predominantly from state intervention.
Jerome Tucille coined the phrase "anarcho-landgrabbism" to describe the tendency of
too many libertarians to take de jure property titles at face value.
Free market anarchists base their theories of private property rights on the homestead
principle: a person has the right to a private piece of real estate provided he mixes his labor
with it and alters it in some way. Anarcho-land grabbers recognize no such restrictions.
Simply climb to the highest mountain peak and claim all you can see. It then becomes
morally and sacredly your own and no one else can so much as step on it.93

This is hardly hypothetical, given the number of existing land titles that can be traced
to U.S. government grants to railroads and land speculators, Spanish crown grants to the
ancestors of today's latifundistas, or even to a pope drawing a line across a map of the
Americas.
Murray Rothbard pointed out the perils of the utilitarian approach to property rights
(i.e., taking de jure property titles at face value):
Suppose that libertarian agitation and pressure has escalated to such a point that the
government and its various branches are ready to abdicate. But they engineer a cunning ruse.
Just before the government of New York state abdicates it passes a law turning over the
entire territorial area of New York to become the private property of the Rockefeller family.
The Massachusetts legislature does the same for the Kennedy family. And so on for each
state. The government could then abdicate and decree the abolition of taxes and coercive
legislation, but the victorious libertarians would now be confronted with a dilemma. Do they
recognize the new property titles as legitimately private property? The utilitarians, who have
no theory of justice in property rights, would, if they were consistent with their acceptance of
given property titles as decreed by government, have to accept a new social order in which
fifty new satraps would be collecting taxes in the form of unilaterally imposed "rent." The
point is that only natural-rights libertarians, only those libertarians who have a theory of
justice in property titles that does not depend on government decree, could be in a position to

92

Murray Rothbard, "How and How Not to Desocialize," The Review of Austrian Economics 6:1 (1992),
pp. 65-77.
93
Jerome Tucille, "Bits and Pieces," The Libertarian Forum, November 1, 1970, p. 3.

scoff at the new rulers' claims to have private property in the territory of the country, and to
rebuff these claims as invalid.94

It therefore follows, as Karl Hess said, that libertarianism does not automatically
defend everything that's called "property":
Because so many of its [the libertarian movement's] people... have come from the right
there remains about it at least an aura or, perhaps, miasma of defensiveness, as though its
interests really center in, for instance, defending private property. The truth, of course, is that
libertarianism wants to advance principles of property but that it in no way wishes to defend,
willy nilly, all property which now is called private.
Much of that property is stolen. Much is of dubious title. All of it is deeply intertwined
with an immoral, coercive state system which has condoned, built on, and profited from
slavery; has expanded through and exploited a brutal and aggressive imperial and colonial
foreign policy, and continues to hold the people in a roughly serf-master relationship to
political-economic power concentrations.95

The anarchist caucus of the Young Americans for Freedom, in their 1969 manifesto
The "Tranquil" Statement (with Hess among its authors), expressed sympathy with
radical students who had occupied their college campuses. In response to right-wing
denunciations of such crimes against "private property," the Statement remarked that
the issue of private property does not belong in a discussion of American universities. Even
those universities that pass as private institutions are, in fact, either heavily subsidized by
federal grants, or, as in many cases, supported by federal research funds. Columbia
University is an excellent example. Nearly two thirds of Columbia's income comes from
governmental rather than private sources. How, then, can anyone reasonably or morally
consider Columbia University to be private [?].... And in so far as it is public (government
owned) property (that is, stolen property), the radical libertarian is justified in seizing that
property and returning it to private or communal control. This, of course, applies to every
institution of learning that is either subsidized by the government or in any way aiding the
government in its usurpation of man's basic rights.96

Rothbard echoed this position in The Libertarian Forum, and then argued for a much
wider application of the principle.
But if Columbia University, what of General Dynamics? What of the myriad of corporations
which are integral parts of the military-industrial complex, which not only get over half or

94

Murray Rothbard, "Property and Exchange," For a New Liberty: The Libertarian Manifesto (1973,
1978). Online edition prepared by William Harshbarger. Ludwig von Mises Institute, 2002.
<http://mises.org/rothbard/newliberty.asp>
95
Karl Hess, "Letter From Washington: Where Are The Specifics?" The Libertarian Forum, June 15, 1969,
p. 2.
96
"The Tranquil Statement," in Henry J. Silverman, ed., American Radical Thought: The Libertarian
Tradition (Lexington, Mass.: D.C. Heath and Co., 1970), p. 268.

sometimes virtually all their revenue from the government but also participate in mass
murder? What are their credentials to private property? Surely less than zero. As eager
lobbyists for these contracts and subsidies, as co-founders of the garrison state, they deserve
confiscation and reversion of their property to the genuine private sector as rapidly as
possible.97

Even this standard for confiscation is probably too modest. To treat gross revenue as
the main criterion, as Rothbard did, oversimplifies things. For one thing, the state's
contribution to the profit margin is probably a more meaningful indicator. The majority
of a corporation's revenue stream may come from private sources, but with state
procurement still making the margin of difference, in enabling a corporation to fully
utilize otherwise idle capacity, between profit and loss. This is the case with much of the
military economy, as we saw in Chapter Three, wherein the signficant measure is not
government procurement as a percentage of a firm's total output, but as a percentage of its
idle capacity. And what of non-monetary benefits from the state, like the ability to charge
monopoly prices thanks to State-enforced patents? or the state's role in stabilizing
oligopoly markets through its regulations, and thus protecting large firms from market
competition?
Taking these things together, it requires no stretch of the imagination to treat virtually
the entire large manufacturing sector as a creation of the corporate state. That's especially
true given the largely fictitious nature of shareholder ownership, as we saw in Chapter
Eight, and the more realistic description of the large corporation as a mass of unowned
capital controlled by a self-perpetuating managerial oligarchy. The shareholders, far from
being "owners" in any real sense, are in practice another class of contractual claimant
with even fewer rights than creditors.
Although Benjamin Tucker refused to advocate the seizure of such nominally private
capitalist property, he speculated that it might be legitimate and useful under some
circumstances.
Professor Sumner also told Herr Most and his followers that their proposition to have the
employee get capital by forcible seizure is the most short-sighted economic measure possible
to conceive of. Here again he is entirely wise and sound. Not that there may not be
circumstances when such seizure would be advisable as a political, war, or terroristic
measure calculated to induce political changes that will give freedom to natural economic
processes; but as a directly economic measure it must always and inevitably be, not only
futile, but reactionary.98

Indeed, in later years he feared that the growth of the great trusts had advanced so far
that it could no longer be reversed by "economic processes," and that a market free of
privilege would be possible only after corporate capitalism had been destroyed by non-

97
98

Rothbard, "Confiscation and the Homestead Principle," p. 3.
Tucker, "Will Professor Sumner Choose?" Instead of a Book, p. p. 372.

economic (i.e., revolutionary) means.
monopoly, which can be controlled permanently only by economic forces, has passed for the
moment beyond their reach, and must be grappled with for a time solely by forces political or
revolutionary. Until measures of forcible confiscation, through the State or in defiance of it,
shall have abolished the concentrations that monopoly has created, the economic solution
proposed by Anarchism and outlined in the forgoing pages – and there is no other solution –
will remain a thing to be taught to the rising generation, that conditions may be favorable to
its application after the great leveling. But education is a slow process, and may not come too
quickly. Anarchists who endeavor to hasten it by joining in the propaganda of State
Socialism or revolution make a sad mistake indeed. They help to so force the march of events
that the people will not have time to find out, by the study of their experience, that their
troubles have been due to the rejection of competition. If this lesson shall not be learned in a
season, the past will be repeated in the future....99

According to Keith Griffin et al, there's heartening news from Africa that customary
tenure systems are at least partially restoring themselves, and healing the damage done
both by colonial expropriation and post-colonial neoliberal "privatization."
In Kenya, for example, there have been consistent efforts to register and privatize land since
the 1950s, and it is estimated that 90 per cent of all land in farming districts had been
privatized by 1993. Today, however, 'there is considerable evidence of reversion to
customery tenure in titled areas, even those areas that prior to titling were experiencing
indigenous shifts toward privatization.'

And indigenous tenure may function quite as efficiently as the Western freehold
model, in achieving the purposes of a property rights system. Secure claims to returns on
improvements, established through customary use-rights, may be a perfectly adequate
incentive for investment under an indigenous tenure system; indeed, "it is possible that
indigenous tenure may provide incentives that are superior to freehold."
Thus it is likely that the efficiency losses associated with communal land tenure have
been exaggerated. In many cases, for example, the right to cultivate communally owned
arable land is heritable and this in itself will increase the incentive of the cultivator to invest.
Indeed, one recent study has found that investment is more highly correlated with the right to
bequest than with the right to sell. Moreover, many communal tenure systems recognize an
individual's rights to arable land when improvements such as planting tree crops, digging
irrigation furrows or constructing buildings are made. Provision even exists to compensate
the individual for such investments if the land is redistributed. Finally, 'although communal
systems prohibit land transactions with outsiders, rentals--and often even sales--within the
community... are normally allowed'.... That is, land is at least partially 'commercialized' and
this provides scope for efficiency-enhancing transfers.
Thus Western-style privatization of land may be unnecessary. It may also be
undesirable. Creating a system of communal land titles may be more cost effective: 'in cases

99

1926 "Postscript to State Socialism and Anarchism."

where there is no clear demand for the demarcation of individual plots, communal titles that
are administered internally in a transparent fashion could provide security at a fraction of the
cost of individual titles'.... This cost advantage plus other advantages of communal tenure
systems--provision of public goods, exploitation of economies of scale in non-farm activities,
risk reduction through output diversification--suggest that strengthening communal systems
often may be a better strategy than discarding them. This is especially true where several
people hold different rights to use the same resource, as is common.... An attempt in such
circumstances to privatize land in the conventional sense inevitably will deprive one or more
groups of people of their right to use a productive asset.. This, in turn, is likely to increase
inequality of wealth and impoverish the most vulnerable. Efficiency may not increase, but
the concentration of land ownership almost certainly will.100

100

Keith Griffin, Azizur Rahman Khan, and Amy Ickowitz, “Poverty and the Distribution of Land,” Journal
of Agrarian Change, 2:3 (July 2002), pp. 294-295. [279-330]

