The Ambiguity of Competition

In his introduction to István Mészáros’ Beyond Leviathan: Critique of the State, John Bellamy Foster discusses the idea that it is “impossible to go ‘beyond capital’  … without also going beyond the state.” In this view, the observed ascendency of capital is both a political and economic phenomenon, in which the state privileges capital and shifts costs and crises onto those who are not socially positioned to protect themselves. The state has played a decisive role in creating the conditions necessary for such an economic system. Often it is in our interactions with the power of capital that we confront the power of the state in our own lives. We have witnessed the increasing consolidation of corporate power, with fewer companies holding more market share. The latest data paint a startling picture: an Oxfam inequality report published earlier this month, “Survival of the Richest,” tells of those who have benefited from a succession of overlapping crises. Over the past few years, the richest people and corporations in the world became “dramatically richer” and more profitable, “driving an explosion of inequality.” The riches of the rich have soared to new heights as a fathomless gulf separating them from the rest of society has widened and deepened, with the social consequences we would expect.

But even as wealth and market power have become increasingly concentrated, conventional wisdom in mainstream economics has maintained that the global market is characterized by “ever-greater competition between firms, workers, and states.”[1] This is a case of mistaken identity. A system of carefully limited competition between monopolies—protected by state power, it is important to restate—is mistaken for a “freely competitive system.”[2] Monopoly capitalism thus manages to hide behind the fantasy of competitive markets, the idea that “workable competition” obtains at least, even if Smith’s ideal has never yet been observed. To critically examine and better understand this fraud[3] is one of any worthy libertarian philosophy’s reasons for being. And it is necessary if we are to disentangle the reality of “oligopolistic rivalry,” “the very antithesis of competition,” from the vaunted ideal of “Smithian competition.”[4] The prevailing debate about globalization and the planet-spanning scale of our corporate institutions inhabits this ambiguity about how robust and competitive markets are defined. Our senses of whether those institutions are defensible are situated within an ideological and linguistic framework that treats monopolization and related processes as marginal, as exceptions or “noise” within “a world of perfect and pure competition.”[5] There is therefore considerable confusion about what values and normative principles global monopoly capital represents. Sorting out some of this confusion can help us point the way forward to a future in which political and economic institutions are democratic and both accountable and accessible to local communities.

This future is libertarian in the sense that it is rigorously attentive to concerns about personal freedom and bodily autonomy; it is socialist in the sense that it does not treat abstractions (for example, “progress,” “development,” and “growth”) as fundamental, as more important than human wellbeing. It understands social relationships as primary and seeks to create economic relationships that are equitable and meaningful for people, connecting them to others in ways that are not shaped by dangerous and socially toxic imbalances of power. We see today an “increasing consensus by many economists that markets are becoming less competitive,” and this raises the question of how to effectively constrain corporate power given the imbalances thus created. Once more, the task is to understand the functioning of the mechanisms that connect political power to economic power, that connect the state and monopoly capital. Professor Harvey J. Kaye, the Director of the University of Wisconsin at Green Bay’s Center for History & Social Change, describes this connection as found in the work of E. P. Thompson:

We have to understand that even relations of production—or relations of exploitation, relations of surplus extraction—are themselves not merely economic. When we say relations of production, it sounds like we’re talking about specifically economic relations. But I’ll just ask this question: how could you possibly have relations of exploitation without a whole legal structure that validates it and whose forces of law and order are there to guarantee their persistence. People are not necessarily volunteering to become exploited. There’s a compulsion.

A more complete understanding of the connection requires that we consider other ambiguities similar to and related to the one Foster and McChesney find in the notion of competition. Private property is another such term. When the left takes issue with the social and legal institution of private property, we are not pointing to the small local farm or the single-acre lot owned by a family. The term here is deployed to refer to a violently constructed, coercive social relationship between capital and labor, in which system “private property” is the neutral-sounding stand-in for historical realities of theft and exploitation. Practitioners and theoreticians of anarchism have always been sensitive to these ambiguities, attending to the contradictions contained within ideas of property, competition, and economic freedom. Indeed, confronting these contradictions was and remains a focal point of the anarchist project from Proudhon (and before) to the present. In the notion of private property, they found two contradictory ideas: property representing robbery and privilege, and property “in the sense that what a [person] definitely produces by [their] own labor is [their] own.” The radical abolitionist and left-libertarian Stephen Pearl Andrews may have put it best in answering the charge that he and other radicals repudiated private property in toto. What we repudiate, Andrews said, is only “the right of accumulating other people’s property,” which defines capitalism.

An important aspect of the anarchist project from its outset has been exploring the continuity between traditional market liberalism and the ideas of the socialist and labor movements, rather than attempting to draw a strict binary in which these ostensible camps must be mutually antagonistic. I have been particularly interested in the anarchist (and proto-anarchist) thinkers whose ideas and projects most clearly represent and help to explain that continuity. Their contributions can help us see a way through the current crisis of inequality and deprivation by positing an alternative to both capitalism and the hierarchical and authoritarian socialist model of the twentieth century. We must at least acknowledge the possibility that the twentieth century’s institutional model of socialism isn’t possible—that is never was. Fortunately, we are not (and never have been) faced with a choice between monopoly capitalism on the one hand and a fully planned economy administered by the total state on the other.

We can imagine social and economic alternatives that meaningfully connect people with their places and ensure that decisions about those places are made in horizontal and democratic ways. The notion of the commons is reintroduced specifically as a self-organized social and economic system “with minimal or no reliance on the Market or State.” What characterizes commons? “They’re not capitalist, they’re not communist. They exist in a sphere of their own. It’s a different economic dimension.” As Elinor Ostrom explained in Governing the Commons, the advocates of both capitalist privatization and centralized state ownership “accept as a central tenet that institutional change must come from outside and be imposed on the individuals affected.” Ostrom wanted to challenge the assumption that a single optimal solution, to be imposed at the national scale, could effectively address the contingencies discovered at more local levels. She wanted to show that “getting the institutions right” would depend on a context of locally-defined cultural factors and other “time and place variables.” These ideas are consistent with the anarchist emphasis on decentralized and federalized governance structures and a textured community life that exists outside of both the formal state and capitalist marketplace. Anarchism is for doers. It’s for people who like to experiment on the margins with innovative ways to make social and economic relations more free, fair, and fulfilling—that is, to make them more human.

If you’re one who happens to care about economic freedom in an abstract ethical sense, you have roughly two choices, and only one of those requires a direct confrontation with the properties, claims, and holdings of the ruling class. It comes as no surprise that the other choice is more attractive and popular; here we are allowed to play pretend, to write histories that erase or downplay beyond recognition the backdrop of horrors underpinning current patterns of wealth. When these histories are in pretty good shape, they become acceptable to very polite people in New York and Washington. Such ruling class histories usually don’t say very much about the relationship between stealing a bunch of land and labor and—would you look at that?—becoming very wealthy. Lots of the individual rights and free marketstypes are very quiet when it comes to the rights of people who didn’t fare as well when “the market was opened.” In fairness, we don’t really hear from those people, because the story we want to tell is one of greatness, and civilizational advancement, and growth. There are cultures and languages that developed over thousands of years, now gone in what is historically the blink of an eye. When you were told the story in grade school, what kind of story was it? If you are my age, chances are the story didn’t spend much time on the billions of acres of land that were stolen from the indigenous peoples of what is today the United States. It probably didn’t remark upon the fact that this pattern of violence and dispossession is a necessary feature of the global economy we have today—that it has meant a compelled transfer of wealth valued in the hundreds of trillions of dollars. Maybe they were trying to spare us the scary parts. In fairness, it’s very hard to look directly at the scary parts, in large part because you can only look; you can’t go into gear, being a human, asking why people are doing this and allowing this. You can’t ask how you can help, because everyone there in the past is beyond help. And yet the scary parts may be the most important in that their study promises a more detailed and accurate picture of how they could’ve happened and how we can avoid them in the future.

The hegemony of ideas is the real and ultimate source of global monopoly power. As Christina Jacqueline Johns explains:

As the ruling class consolidates its hold over the social order and develops its hegemony of ideas, it is able to present through the state its own interests as those of the society as a whole. The state, therefore, while perpetrating organized violence that primarily serves the interests of the ruling class also functions as the mechanism through which these acts are represented as being in the interests of the society as a whole.

The conversation about capitalism and its relationship with freedom must recapture a critical approach to notions of competition and private property, probing the contradictions and ambiguities that inhabit these terms. It is strange but perfect that the partisans of capitalism have claimed “libertarian” for a state-created and -imposed class system. It is interesting that the defenders of property frequently seem not to notice history’s most massive violations of the principle. A critical use of these concepts, following and building upon the insights of both anarchists and contemporary theorists of monopoly capital, is an estrangement strategy that can help us go beyond the outmoded ideas of the last century.

Notes.

[1]  John Bellamy Foster and Robert W. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China (Monthly Review Press 2012), page 22.

[2] Ibid. at 22-23.

[3] I discuss what John Kenneth Galbraith called the “innocent fraud” of the economics profession here.

[4]   John Bellamy Foster and Robert W. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China (Monthly Review Press 2012), page 23.

[5] Ibid. at 23.

David S. D’Amato is an attorney, businessman, and independent researcher. He is a Policy Advisor to the Future of Freedom Foundation and a regular opinion contributor to The Hill. His writing has appeared in Forbes, Newsweek, Investor’s Business Daily, RealClearPolitics, The Washington Examiner, and many other publications, both popular and scholarly. His work has been cited by the ACLU and Human Rights Watch, among others.