Freedom Discussions

A Response To The “Anarchist” Economics Of The Occupy X Movement

by Michael Suede, LN

I was recently forwarded an article written by Deric Shannon that argues in favor of some flavor of socialist anarchy.   I was asked to provide a rebuttal argument to this article.

Initially, I was going to craft a response by refuting the content line by line, but after re-reading the article and thinking about it, it became clear to me that such a response would be pointless since the article never actually articulates any kind of systemic plan of organization.  Nor does it make any real logical assertions.

The article is basically a gigantic Appeal to Emotion Fallacy, which doesn’t lend itself to a line by line refutation technique.  Therefore, the best kind of response I can give is to ask questions that force him to confront logic an reason.

Let me begin by pointing out some Appeal to Emotion fallacies that arise in the article so you can see what I’m talking about.  Deric writes:

What might we say about “human nature” in a society founded on cooperation instead of survival-of-the-fittest; mutual aid instead of an ethic of competition; the organic needs and desires of people instead of the production of so much useless shit that we are conditioned to want by a multi-billion dollar advertising industry? We would likely have an entirely different view of “human nature” and the ways we organize to meet our desires wouldn’t resemble the sick society we have inherited and currently (allow ourselves to) live in.

Of course, everyone wants to live in a society that is predicated on mutual cooperation and mutual aid, but Deric never bothers to explain how anarcho-socialism can accomplish this.  Deric also claims that society produces too much “useless shit”, which makes no sense given that people are willing to voluntarily pay for “useless shit”, which by definition means that the shit must not be useless to them.

Consider that it is Deric’s opinion that people should not produce and consume what he considers to be “useless shit”, and that if Deric had his way, he would impose his will upon others to ensure that no one consumed things which Deric considered to be useless.

The entire article reads like this, without any real rational thought put into the mechanics of how anarcho-socialism can bring about a “greed-free” world with abundant food, clothing, shelter, medical care, etc.. etc..  Deric simply states that anarcho-socialism can bring about this Utopian world without offering any concrete step-by-step logic explaining how this comes about.

So let us offer Deric some food for thought by asking some thought provoking questions:

Under anarcho-socialism, where workers supposedly control the means of production, who is to decide how resources are to be distributed and what products should be produced?   Who is to decide what worker works at what factory?

Do the workers at a shoe factory all vote on what kind of shoes they should produce?  What if they produce crappy shoes that no one likes?  How do they know if they have produced too many small shoes and not enough large shoes?  (a common problem in Soviet Russia).

Further, who is to organize the workers that build factories like the shoe factory in the first place?  What is to stop them from producing too many shirt factories at the expense of too few shoe factories?  (shortages and over-supply of consumer items are common in socialist nations).

From Scott Shane’s Dismantling Utopia:

My informal survey suggested that some of the longest lines in Moscow were for shoes. At first I assumed that the inefficient Soviet economy did not produce enough shoes, and for that reason, even in the capital, people were forced to line up for hours to buy them. . . . Then I looked up the statistics.

I was wrong. The Soviet Union was the largest producer of shoes in the world. It was turning out 800 million pairs of shoes a year–twice as many as Italy, three times as many as the United States, four times as many as China. Production amounted to more than three pairs of shoes per year for every Soviet man, woman, and child.

The problem with shoes, it turned out, was not an absolute shortage. It was a far more subtle malfunction. The comfort, the fit, the design, and the size mix of Soviet shoes were so out of sync with what people needed and wanted that they were willing to stand in line for hours to buy the occasional pair, usually imported, that they liked.

Talk about producing useless shit!  If Deric’s goal is to minimize the production of useless shit, it seems odd that he would argue in favor of a system that has no price feed back mechanism to halt the production of truly useless shit.

Continuing on with the “price feedback” theme, let’s move on to Ludwig von Mises epic work of logic called theEconomic Calculation Problem.   Mises demonstrated that because socialism lacks a price feed back mechanism, there is no way for resources to be rationally distributed throughout the economy.  There is no way for factory producers to know that they have produced too many shoes and not enough shirts.  There is no way to know that the steel used in producing a toaster might have been better put to use producing a microwave oven.  Socialist “voting” by workers on what to produce is an incredibly inefficient way to allocate resources that leads to massive waste.

Deric goes on to say:

Can we really say that the state and capitalism—the institutions that largely organize our economic life—“work”? Before this “crisis” even started, 80% of the world’s population lived on less than ten dollars a day (this is evidence that for most of the world, capitalism is always a crisis).1 Is that a system that “works”? We produce enough food to feed everyone in the world. Yet, one in seven people around the world go hungry.2 Is that a system that “works”?

Deric calls capitalism an institution, but is it really?  The Austrian school simply defines capitalism as the voluntary trade of goods and resources in a money based, privately owned, economy.  There is no single entity that defines and controls “capitalism” if one goes by that definition.  I know socialists like to claim that the term capitalism encompasses central banking, fiat money, crony private-public partnerships, bailouts, grants of monopoly privilege, etc.. etc..   but really, true capitalism has nothing to do with any of those things.  Indeed, central banking is written into the Communist Manifesto penned by Marx!

Deric is right to point out the failings of such a system.  Planned economies, either by workers or by bureaucrats, always result in failure.  Only consumers voting with their money can rationally dictate how resources should best be utilized in the most efficient manner in order to bring about wealth for society.

What is “wealth” by the way?   Consider Zimbabwe with its rampant hyper-inflation.  People can have lots and lots of money, but it doesn’t mean anything if there are no goods and services for the money to represent.

A wealthy society is one that has an abundance of goods and services available for consumers that consumers actually want.  As Soviet Russia shows us, a society can have an abundance of shoes, but if everyone hates the shoes, the population will still be “shoe deficient”.  And since their are no prices, manufactures can not know if they are producing things that people actually want or not.

But let’s get back to Deric’s “mutual cooperation and mutual aid” statement, where he opines about the glorious cooperation that results from a socialist model.  To me, mutual cooperation implies non-violent voluntary exchanges.  But is this the case under socialism?  For example, say a shoe factory worker named John gets fed up with the way things are being produced at his shoe factory.  So he and a few of his boys decide they are going to open up their own shoe factory and compete (compete for what? I’m not sure.  But lets pretend anyways).

Could John do this under a socialist model?  Clearly not.  Think about how John would go about producing a new shoe factory.  He would have to get building materials, production equipment, workers, etc.. etc.. but since he doesn’t control any of those things and because there is no money, John would have to persuade the producers of all of those things that they should give him their resources for free so that he can build his factory.  There might be a million people who all want those same resources to start their own various factories!  How are the producers of industrial goods to know who should get control of the resources they produce?

As you can see, socialism is the antithesis of efficient production.  It is the exact opposite of everything Deric wants to bring about within society.  Deric claims that capitalism brings about a “survival of the fittest” society where everyone must compete with each other.  But it is only through competition that the most efficient means of production can come into existence!  People must have an incentive to be efficient.  Socialism provides no efficiency incentives at all.  Resources under socialism may be allocated based on favoritism, nepotism, cronyism, “need”, etc.. but they are most certainly NOT allocated based on who can manage resources most efficiently.

Under a capitalist model, it is clear who can best manage resources because the market provides those producers with a profit, with which they can use to expand their production facilities.  Those producers who make the most profits have the greatest ability to expand their production.  While at the same time, those producers who fail to meet the public’s needs in the most efficient manner will have their resource control taken away from them through bankruptcy.  The need for man to compete for resources is not something that is limited to capitalism – it is fundamental to reality.  In order for resources to be put to use in the most efficient manner, competition among producers for resources is essential.

Let’s get back to that peaceful cooperation bit.   Capitalism can be derived from the non-aggression principle.  That is to say, it is immoral to initiate violence against another person if that person has not harmed or damaged another person’s property or person.  So what is property?  Property can be derived from the principle of self-ownership. If I own myself (ie. I am not a slave), it stands to reason that I own what I produce with my own two hands.  If I walk through the forest and pick up a stick, and then turn that stick into a spear, clearly I am the “owner” of that spear because I have mixed my labor with an unclaimed resource.  It would be immoral for someone to steal my spear or take it from me by force.  In order for a person to morally acquire the spear from me, they must persuade me to give it to them voluntarily.  Typically this persuasion takes the form of trade; whereby, they offer me something I value in return for my spear (ie. capitalism).

Socialism violates both principles.  If I can not have a claim of ownership over the things I produce with my own two hands, then I am a slave.  And it follows that if someone believes they have a higher claim to the fruits of my labor than I myself do, they will view the initiation of force against me to take the fruits of my labor as being moral.

Socialism can be summed up by the words “slavery and theft”.   Consider what society would look like if everyone was free to take each others stuff without their consent, and anyone who objected to this was met with violent reprisal.  ”That laptop is not yours – oh no no no – that laptop belongs to society. That laptop should belong to the person who most ‘needs’ it!”   So who decides who has the greatest need?  a dictator?  a gang of workers?  Ayn Rand gave a great depiction of such a collective when she detailed the distribution of resources within the  Twentieth Century Motor Company in Atlas Shrugged.

Clearly socialism as an economic model is unsustainable, leads to massive waste and ultimately relies on the use of force or coercion to allocate resources.  But further consider that under an anarcho-capitalist model, nothing would prevent groups of people from banding together in order to create a voluntary socialist commune. The opposite is not true.  A person could not open a privately owned factory with a group of friends or investors under any kind of socialist system.

From this fact, we can draw some conclusions.  If socialist-anarchists were truly in favor of a non-violent cooperative system, they would all be arguing in favor of anarcho-capitalism, since under such a model, they would be able to create all the communist communes they like, and then trade the things they produce with each other till their hearts are content.  Their hate of anarcho-capitalism demonstrates that they have no desire to engage in peaceful cooperation or the peaceful allocation of resources.

Under anarcho-capitalism, the socialists wouldn’t even need to have any money to purchase land!  Homesteading is the basis for original property rights under anarcho-capitalism, which means if a large group of socialists decided to erect a commune on unused land, they would be perfectly within their rights to do so.  The key is that no one could be forced to work or live there against their consent.  An anarcho-capitalist would say “have fun building your commune!”, while a socialist would say “I want your stuff, and if you try to build stuff without giving me any for free, I’m going to use violence against you to take it from you by force.”

Anarcho-capitalism doesn’t force anyone to use money or comply with any modern banking practices.  Socialists would never have to touch a dime if they wanted to build communes and trade with each other in an anarcho-capitalist society.  But clearly this just isn’t good enough for the anarcho-socialists.  Since they claim “society” should own all resources, it stands to reason that anyone who refuses to give them resources they feel they are entitled to may be subject to violent reprisal.

In summary, socialism is a violent, totalitarian, wasteful, incoherent, system of enslavement.

Chew on that Deric.