Spain 1936-1937: Libertarian Socialism & Its Demise

[Galteeth]

In some cases the coercive force that prevents a choice from being a free one is originated by one of the parties to the negotiation, as in the case of saying "If you will confess to withcraft, then I won't put you on the rack." In other cases, the coercive force that prevents the choice from being a free one is originated elsewhere in the environment, and it is simply found by one of the parties, who can then take advantage of it, as in the case where I encounter a person dangling over a cliff, and I tell that person "I will lower a rope to you if you will agree to be my servant." People making the pro-capitalist argument only recognize the case where the coercion is introduced by one of the parties. They don't recognize the case where the coercion is found as-is and someone who comes along can take advantage of it. The class-based coersion that exists under capitalism is of the latter type. The capitalist doesn't force the worker to enter into employment. It is only a found situation that is to be exploited. We are not the kind of animal that has the means of survival as part of our own bodies, as in the case of the eagle's wings and talons, the bear's claws, or the cheetah's fast legs. We are the kind of animal that has the means of survival located outside of ouselves in the tools that have been developed. The tools have become too large and complex to be supplied spontaneously without a huge amount of capital; for example, the role that used to be the village blacksmith is now the role of a few giant steel corporations. The modern capitalist finds this historical trend and takes advantage of it. Although the capitalist hasn't used an force personally, this historical result makes the people who own the tools the rulers over the lives of the people who don't own the tools.

Fair enough. I don't agree but I understan what you are saying. I personally see a moral difference between coercion through direct force and indirect coercion through the circumstances of the environment or society. I don't think, for example, social pressures to conform are absolutely immoral unless they are backed with direct coercive force.

EDIT: Thinking about it further, free choice is meaningless without consequence, whether intended or unintended.

 

[Al68]

Fair enough. I don't agree but I understan what you are saying. I personally see a moral difference between coercion through direct force and indirect coercion through the circumstances of the environment or society. I don't think, for example, social pressures to conform are absolutely immoral unless they are backed with direct coercive force.

EDIT: Thinking about it further, free choice is meaningless without consequence, whether intended or unintended.

That last statement is a key point. The word coercion (or duress) doesn't mean simply that a decision has consequences.

But that does illustrate the standard that Marxists have for society: That adults shouldn't be free to make (or need to make) decisions that have personal financial consequences for them. The Marxist standard for adults is virtually identical to the libertarian standard for children.

 

[mheslep]

... I do not know where did you take that most acceptable figure is 20 millions. Acceptable by whom?

The historians I referenced, Montefiore and Conquest, to start. As far as I can from reading reviews, most historical scholars, certainly not all, side generally with Conquest et al. That's just my take <shrug>, but also according to Conquest the figure was standard in Russia as of 1990:

[...]reckoned the dead at no fewer than 20 million. This figure is now given in the USSR. And the general total of "repressed" is now stated (e.g. in the new high school textbooks) as around 40 million, about half of them in the peasant terror of 1929 to 1933, and the other half from 1937 to 1953.

He did not have access to the archives, and hence his figure that he made in 60's is purely speculative.

No, look again. The reference I provided was https://www.amazon.com/exec/obidos/...reviewA/#reader_0195071328"&tag=pfamazon01-20, (re)written in 1990. A great bit of it is available online at the link.

 

[mikelepore]

I'll close this post with two questions:

Can you accurately portray your, or Marx's, objections to capitalism without using any words figuratively (such as hyperbole), using words only with their standard definitions (or supplying the definition for non-standard words), and not making any factual claims without supplying evidence that they are true? (I'm not saying that any of those things are wrong, just that a valid objection should be capable of explanation without them.)

Marx focused on this: Capitalism is a fabulous way to take humanity out of the age of feudalism and introduce the large-scale plant with mechanized mass production for the first time. Its mission was already fulfilled a long time ago. Feudalism is completely gone. We're already in the industrial age. Now we're ready for the next historical step, introducing a conscious and rational plan to replace the chaotic randomness of the market. Discussion of this point is the topic of most of the Communist Manifesto, where it is presented more clearly than I can explain it.

However in this forum I have focused on these two approaches:

(1) The various economic trends. Capitalism is based on the systematic extraction of wealth from those who produce it by those who live on inheritances and do not contribute to production. As anyone has ever played poker knows, the inevitable effect of economic competition is always to concentrate more and more of the wealth into the hands of fewer and fewer people. The worker's remuneration is typically the price of a surplus generic commodity placed on the auction block and subjected to the forces of supply and demand. Although productivity in the age of automation continues to rise sharply, working don't see this trend in their wages.

(2) The hundreds of social problems caused by capitalism. Corporate money corrupts the political process. Governments prop up dictators that are friendly to business interests. The law usually gives companies that harm the environment decades to switch over to new methods. Sick people can't afford their medications. Workers get maimed in industrial "accidents" because management ignores worker reports of hazards, concentrates on cutting costs, and requires fatigued workers to work overtime. The loss of a job is one of the leading causes of suicide. Such behavioral problems such as domestic violence, school dropout, and teenage pregnancy are strongly correlated with low family income. Retired workers find that their pensions don't come close to the cost of living. Companies will only do the responsible thing when the government forces them to, as when General Electric had to be forced by court actions to dredge the Hudson River to clean up the PCB that it had poisoned the river with. One could go on making this list all day and all night -- there no end to it. The bottom line is, social problems in general are caused by one or more of these characteristics of capitalism: economic stratification, the lack of workers' democratic control, or the desire for private profits.

What would or should the penalty be for practicing capitalism after a "socialist reconstruction"?

Although it's clear to you what you mean by practicing capitalism, but you haven't said what practice you have in mind. I would guess that you're not thinking of one of the nastiest activities, like the decades of U.S. imperialism in foreign countries, the U.S. military conquest of the mines in Nicaragua and the plantations in Guatemala. The company that made the aircrafts to bomb Vietnam was practicing capitalism. The heroin pusher is practicing capitalism. But you're probably thinking of some harmless little activity like operating a lemonade stand or a popcorn stand -- because you're unable to recognize the existence of a complex and worldwide system that has many interwoven consequences. All you're able to recognize is two individuals at a time voluntarily negotiating a contract.

 

[Office_Shredder]

Although it's clear to you what you mean by practicing capitalism, but you haven't said what practice you have in mind. I would guess that you're not thinking of one of the nastiest activities, like the decades of U.S. imperialism in foreign countries, the U.S. military conquest of the mines in Nicaragua and the plantations in Guatemala. The company that made the aircrafts to bomb Vietnam was practicing capitalism. The heroin pusher is practicing capitalism. But you're probably thinking of some harmless little activity like operating a lemonade stand or a popcorn stand -- because you're unable to recognize the existence of a complex and worldwide system that has many interwoven consequences. All you're able to recognize is two individuals at a time voluntarily negotiating a contract.

So... you're suggesting firing squad at dawn, or hanging at high noon?

 

[Vanadium 50]

Now we're ready for the next historical step, introducing a conscious and rational plan to replace the chaotic randomness of the market.

...with the benevolent guidance of Brother Number One?

 

[Al68]

Capitalism is based on the systematic extraction of wealth from those who produce it by those who live on inheritances and do not contribute to production. As anyone has ever played poker knows, the inevitable effect of economic competition is always to concentrate more and more of the wealth into the hands of fewer and fewer people.

This is simply not capitalism, for at least three reasons. First, the poker analogy illustrates quite clearly the flaw in Marxist reasoning, since unlike poker, in capitalism pre-existing wealth isn't simply transferred from one person to another. The process itself creates the resulting wealth. It's as if the act of playing poker created the money in the pot, instead of playing with pre-existing money.

Second, capitalism isn't based on any "extraction" of any pre-existing wealth. No capitalist transaction ever occurs that doesn't create wealth, ie increase the wealth of each party involved.

Transactions that don't increase the wealth of each party are by definition not capitalism. For example acts of charity, fraud, and theft are not acts of capitalism, they are exceptions to capitalism because the acts themselves only transfer instead of create wealth.

Third, the implication that capital is owned primarily by those "living on inheritances" is simply factually untrue. The majority of rich people in the U.S. are self-made. In addition, the bulk of corporate stock owned in the U.S. currently is owned by individual retirement funds, ie 401k's, IRA's, etc.

Although it's clear to you what you mean by practicing capitalism, but you haven't said what practice you have in mind. I would guess that you're not thinking of one of the nastiest activities, like the decades of U.S. imperialism in foreign countries, the U.S. military conquest of the mines in Nicaragua and the plantations in Guatemala. The company that made the aircrafts to bomb Vietnam was practicing capitalism. The heroin pusher is practicing capitalism. But you're probably thinking of some harmless little activity like operating a lemonade stand or a popcorn stand -- because you're unable to recognize the existence of a complex and worldwide system that has many interwoven consequences. All you're able to recognize is two individuals at a time voluntarily negotiating a contract.

I'm perfectly capable of recognizing all of the above, but capitalism isn't any of them by definition, except the last one.

Clearly, imperialism, conquest, building aircraft, and pushing heroin can and does co-exist with both capitalism or socialism, but aren't inherently part of the definition of either. Do you really want to compare the types of actions that have historically co-existed with different economic systems?

By capitalism, I mean the act of individuals claiming personal ownership of the product of their own labor and selling, buying, or trading it with others as they see fit, independently of any political or legally imposed "economic system".

So, if that explanation is clear enough:

What would or should the penalty be for practicing capitalism after a "socialist reconstruction"?

 

[mheslep]

Third, the implication that capital is owned primarily by those "living on inheritances" is simply factually untrue. The majority of rich people in the U.S. are self-made.

Yes, though it wasn't necessarily that way in Marx's day. Things have changed today however, and there's readily available data to show that in large part the "rich" in the US have become the "working rich", i.e. they have replaced the idle rent and dividend collectors of the last century.

The wars generated large Žscal shocks, especially in the
corporate sector that mechanically reduced distributions to stockholders.
We argue that top capital incomes were never able to
fully recover from these shocks, probably because of the dynamic
effects of progressive taxation on capital accumulation and
wealth inequality. We also show that top wage shares were at
from the 1920s until 1940 and dropped precipitously during the
war. Top wage shares have started to recover from the WorldWar
II shock in the late 1960s, and they are now higher than before
World War II. Thus, the increase in top income shares in the last
three decades is the direct consequence of the surge in top wages.
As a result, the composition of income in the top income groups
has shifted dramatically over the century: the working rich have
now replaced the coupon-clipping rentiers. We argue that both
the downturn and the upturn of top wage shares seem too sudden
to be accounted for by technical change alone. Our series suggest
that other factors, such as changes in labor market institutions,
Žscal policy, or more generally social norms regarding pay inequality
may have played important roles in the determination of
the wage structure

http://elsa.berkeley.edu/~saez/pikettyqje.pdf

https://www.physicsforums.com/showpost.php?p=1924144&postcount=3")

 

[vici10]

The historians I referenced, Montefiore and Conquest, to start. As far as I can from reading reviews, most historical scholars, certainly not all, side generally with Conquest et al. That's just my take <shrug>, but also according to Conquest the figure was standard in Russia as of 1990:No, look again. The reference I provided was https://www.amazon.com/exec/obidos/...reviewA/#reader_0195071328"&tag=pfamazon01-20, (re)written in 1990. A great bit of it is available online at the link.

Interestingly enough, going through the references of Conquest's book, I have not found any direct reference to primary archival material from NKVD archives (GARF).

 

[Al68]

Third, the implication that capital is owned primarily by those "living on inheritances" is simply factually untrue. The majority of rich people in the U.S. are self-made.

Yes, though it wasn't necessarily that way in Marx's day. Things have changed today however, and there's readily available data to show that in large part the "rich" in the US have become the "working rich", i.e. they have replaced the idle rent and dividend collectors of the last century.

That's a good point. In addition to that, the terms rich and poor are relative, not absolute, terms. By the standards of rich and poor in Marx's time, (almost) everyone in the U.S. is rich. And that's a huge understatement.

 

[mikelepore]

Second, capitalism isn't based on any "extraction" of any pre-existing wealth. No capitalist transaction ever occurs that doesn't create wealth, ie increase the wealth of each party involved.

It very easy to demonstrate that there is always a question of how to distribute wealth, and not merely the act of continuously creating it. When workers go into the employer's office and ask for a raise, the employer sometimes says no. There is only one possible reason for ever saying no. The employer knows that a raise for the workers would be equivalent to having less cash retained by the business. There is clearly an issue analogous to dividing a pie -- if some eaters call for larger slices then that could only be achieved by making the slices of the other eaters smaller. If this were not true, then the boss would in every cases be very happy to triple the wages of the workers at any time, this act having no effect on the wealth that the company has left over. But everyone involved knows that something finite is being divided up.

(It's inevitable here that supporters of capitalism will raise the objection to my example that the size of the pie is always changing, but I'm obviously talking about any selected instant in time, so the continuous change in the size of the pie is irrelevant.)

The following illustrious citizens are a few of those who have known a thing or two about the expropriation of wealth from the workers who produce it:

G. P. Getty, $1.9 billion inheritance
J. P. Getty, Jr. $1 billion inheritance
C. M. Getty, $670 million inheritance
A. C. Getty Earhart, $670 million inheritance
C. E. Getty Perry, $670 million inheritance
W. C. Ford, $1.4 billion inheritance
J. Ford, $800 million inheritance
R. A. Hearst, $1.4 billion inheritance
W. R. Hearst III, $800 million inheritance
D. W. Hearst, Jr., $700 million inheritance
G. R. Hearst, Jr., $700 million inheritance
A. Hearst, $700 million inheritance
P. Hearst Cooke, $700 million inheritance
O. M. Dupont Bredin, $500 million inheritance
C. S. Du Pont Darden, $500 million inheritance
I. Du Pont, Jr., $500 million inheritance
I. S. Du Pont May, $500 million inheritance
A. F. Du Pont Mills, $515 million inheritance
J. C. Walton, $6.5 billion inheritance
H. R. Walton, $6.4 billion inheritance
A. L. Walton, $6.3 billion inheritance
S. R. Walton, $6.3 billion inheritance
J. T. Walton, $6.3 billion inheritance
A. K. Walton, $660 million inheritance
L. M. Walton, $660 million inheritance

(Numbers copied from an old issue of Forbes magazine, December 1997)

"Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks." --- Marx, "Capital", Chapter 10

 

[mheslep]

... When workers go into the employer's office and ask for a raise, the employer sometimes says no. There is only one possible reason for ever saying no. The employer knows that a raise for the workers would be equivalent to having less cash retained by the business. There is clearly an issue analogous to dividing a pie -- if some eaters call for larger slices then that could only be achieved by making the slices of the other eaters smaller. If this were not true, then the boss would in every cases be very happy to triple the wages of the workers at any time, this act having no effect on the wealth that the company has left over. But everyone involved knows that something finite is being divided up.

I know of other reasons: the company raise budget is indeed going to be given out, but I want to give this particular slice to someone more hard working, more productive for the business (that's usually my top reason), and by doing so reinforce the message that productivity is rewarded in my outfit. Or, times may be tight now and I don't want to lay anyone off and so on.

(It's inevitable here that supporters of capitalism will raise the objection to my example that the size of the pie is always changing, but I'm obviously talking about any selected instant in time, so the continuous change in the size of the pie is irrelevant)

Then the entire proposed premise (raise not given for cash flow reasons) falls apart. A raise refers to a change in a wage which is received over time (future), the justification for which was performance (hopefully) over time (past), and predicted performance over time (future). The argument can't be based on all activity over time on the part of the employee and then insist on only an instantaneous look at the employer's cash flow for sole motivation.

The following illustrious citizens are a few of those who have known a thing or two about the expropriation of wealth from the workers who produce it:

G. P. Getty, $1.9 billion inheritance
J. P. Getty, Jr. $1 billion inheritance
C. M. Getty, $670 million inheritance
...

Why not include Einstein (~185 IQ), Yo Yo Ma (cellist, played age 4), and Michael Jordan (4' standing vertical jump) who all inherited their gifts through genes?

 

[mikelepore]

By capitalism, I mean the act of individuals claiming personal ownership of the product of their own labor and selling, buying, or trading it with others as they see fit, independently of any political or legally imposed "economic system".

So, if that explanation is clear enough:

What would or should the penalty be for practicing capitalism after a "socialist reconstruction"?

Your definition of capitalism is the one used only among the 250,000 nationwide members of the Libertarian Party, and not even all of those, but it will have to be enough for now to clarify your question.

I already said this in my post of June 19. I'm in favor of any kind of private trade in goods and services that can be performed with the tools that are readily available to everyone, such as the cook's utensils, the painter's brushes, the barber's scissors, etc.

As for the use of the tools that are not ordinary found around the house, such as the factories, farms, mines, fishing waters, railroads and hospitals, I believe that the private ownership of these tools should be prevented by informing anyone who inquires about buying them that those things are not for sale, regardless of how much saving they may have available to spend on them.

The latter part should be clear enough, because even under capitalism people cannot buy something that hasn't been put up for sale, e.g., if you told the grocer "I don't want to buy the can of beans; I want the display case that the can of beans is sitting on" -- the grocer may say that it's not for sale. I think an economy should be set up such that, if someone says "I didn't come here for a ride on the train; I came here to buy a partial ownership in the railroad" -- the individual should be informed that it's not for sale.

The extent of private land use in a future classless society remains undefined as of today. For example, if it's routine for home owners to trade their garden vegetables, but an individual has no means to become an owner of a plantation, then there would have to be a limit on how large a backyard the home owners may find for sale, buy, and subsequently leave to their offspring, as required to differentiate between a garden and a plantation. I'm not familiar with any socialist proposals about how to settle the ambiguity about land use.

***

To change the subject a little ...

Your concept of transactions performed "independently of any political or legally imposed 'economic system'" would sound mighty strange to anyone educated in law. The world has no way to know who owns any lot except to refer to the deeds recorded at town hall. Contracts are meaningless unless they are enforced by courts and sheriffs. Every sort of piece of paper needed by business, from the investors' prospectus to the patents to the workers' time cards to granddaddy's last will and testament, are all legal documents. The only way capitalism was able to progress beyond the sole proprietor stage and enter the age of the joint stock company was to pass the law saying that the stockholders shall not be prosecuted when their company commits a crime. To identify the one thing that capitalism rests upon most basically, we would have to say it is the power of government to enact and enforce laws. Whatever the legislature creates, it may also repeal. As Benjamin Franklin observed, "Private property is a creature of society, and is subject to the calls of that society."

 

[Al68]

It very easy to demonstrate that there is always a question of how to distribute wealth, and not merely the act of continuously creating it...There is clearly an issue analogous to dividing a pie -- if some eaters call for larger slices then that could only be achieved by making the slices of the other eaters smaller.

Sure, that's an issue, but my point was that in capitalism, unlike poker, each of the people deciding how to divide up the pie helped make the pie, and that's why they must decide how to divide it. And, the agreement on how to divide the pie is made before the pie is made. And importantly, the reason the pie is made is because its makers made an agreement that ensured that each of them would benefit from their role in making the pie. The agreement resulted in the pie. That's not analogous to poker, which only decides how to divide pre-existing wealth.

And I fully realize that pies can be made without such an agreement, but if we're talking about capitalism, we're talking about pies that are the result of such an agreement.

Your definition of capitalism is the one used only among the 250,000 nationwide members of the Libertarian Party, and not even all of those, but it will have to be enough for now to clarify your question.

My definition is the relevant one here because you advocate outlawing the activity I called "capitalism", while I'm against outlawing it. It's my definition that's relevant here, since that's the activity we are disagreeing about.

We are both against the situation you call "capitalism", so that definition isn't very useful here.

As for the use of the tools that are not ordinary found around the house, such as the factories, farms, mines, fishing waters, railroads and hospitals, I believe that the private ownership of these tools should be prevented by informing anyone who inquires about buying them that those things are not for sale, regardless of how much saving they may have available to spend on them.

The latter part should be clear enough, because even under capitalism people cannot buy something that hasn't been put up for sale...

That's not clear at all, since in capitalism, people can in fact buy something after being informed by a third party that it isn't for sale.

Maybe my question wasn't clear: The seller relevant to my question is originally the person(s) who's labor creates the "tool" being sold. The buyer would inquire by asking the seller. Neither would inquire about anything with any agent of the proposed Marxist system.

In other words, what is the penalty for ignoring the Marxist system and practicing capitalism as if the Marxist system didn't exist?

I'll note that this obviously doesn't apply to unimproved land, such as the fishing waters you mentioned. Available land itself is a different issue, like it is with socialism, but I don't want to change the subject here.

Your concept of transactions performed "independently of any political or legally imposed 'economic system'" would sound mighty strange to anyone educated in law. The world has no way to know who owns any lot except to refer to the deeds recorded at town hall. Contracts are meaningless unless they are enforced by courts and sheriffs. Every sort of piece of paper needed by business, from the investors' prospectus to the patents to the workers' time cards to granddaddy's last will and testament, are all legal documents. To identify the one thing that capitalism rests upon most basically, we would have to say it is the power of government to enact and enforce laws.

Obviously, law and order is important, but the power of government to enact and enforce laws doesn't automatically constitute an "economic system". I don't think anyone educated in law would ever consider a "legal system" to automatically and necessarily constitute an "imposed economic system".

Edit: When I refer to capitalism as not being an "imposed economic system", I just mean that the relevant economic decisions that comprise capitalism aren't made by any political or legal institution, they are made individually by the parties to each transaction. In that sense, capitalism is not a "political or legal system which makes the economic decisions for society". I didn't mean that no political or legal system existed, or that one couldn't be beneficial to capitalism's success.

The only way capitalism was able to progress beyond the sole proprietor stage and enter the age of the joint stock company was to pass the law saying that the stockholders shall not be prosecuted when their company commits a crime.

I quoted this out of order to address it separately. I think you're referring to the concept of limited liability which has nothing to do with criminal law, it's about financial liability. It just means that if I own stock in GM, and GM gets sued or otherwise obtains debt, my personal financial liability is limited to the value of my stock. Nobody can sue me for my house because of something I didn't personally do, they can only get what I have invested in the company.

As far as criminal acts, no such law is needed, since no law existed allowing the criminal prosecution of a person for a crime he didn't commit or even know about.

 

[TheStatutoryApe]

I quoted this out of order to address it separately. I think you're referring to the concept of limited liability which has nothing to do with criminal law, it's about financial liability. It just means that if I own stock in GM, and GM gets sued or otherwise obtains debt, my personal financial liability is limited to the value of my stock. Nobody can sue me for my house because of something I didn't personally do, they can only get what I have invested in the company.

As far as criminal acts, no such law is needed, since no law existed allowing the criminal prosecution of a person for a crime he didn't commit or even know about.

If you are an owner of a business and one of your workers commits a crime while at work and in the process of operating the business, depending on the nature of the crime, you can be held liable. While that worker is on your premises and working for you their actions are your responsibility to a reasonable degree. I believe that those instances where you will be held liable only require that you should reasonably have been aware of the actions of your employee and done something about it, it does not require that you were in fact aware of the crime. In the case of a corporation all of the workers are the employees of the corporate entity, not any particular investor, and no investor will be held liable for the actions of the employees of the company that they own. The only way that they could possibly be held liable at all is if they were aware of the activity and did nothing which would have to be proved beyond a reasonable doubt.

 

[Galteeth]

I quoted this out of order to address it separately. I think you're referring to the concept of limited liability which has nothing to do with criminal law, it's about financial liability. It just means that if I own stock in GM, and GM gets sued or otherwise obtains debt, my personal financial liability is limited to the value of my stock. Nobody can sue me for my house because of something I didn't personally do, they can only get what I have invested in the company.

As far as criminal acts, no such law is needed, since no law existed allowing the criminal prosecution of a person for a crime he didn't commit or even know about.

The concept of a corporation is troubling from a right anarchist view (note the historical form of anarchism known as mutualism) as well, since collective responsibility is divorced from individual responsibility. It seems essential that some individual must ultimately be responsible for a collectively undertaken action ( a situation where any individual contribution is not per ce harmful but the totality of the action is) or a corporation becomes a means of avoiding responsibility. I think this is one of the reasons the term "corporation" has gotten such a negative modern connotation.

 

[Al68]

If you are an owner of a business and one of your workers commits a crime while at work and in the process of operating the business, depending on the nature of the crime, you can be held liable. While that worker is on your premises and working for you their actions are your responsibility to a reasonable degree. I believe that those instances where you will be held liable only require that you should reasonably have been aware of the actions of your employee and done something about it, it does not require that you were in fact aware of the crime. In the case of a corporation all of the workers are the employees of the corporate entity, not any particular investor, and no investor will be held liable for the actions of the employees of the company that they own. The only way that they could possibly be held liable at all is if they were aware of the activity and did nothing which would have to be proved beyond a reasonable doubt.

Sure, my point was only that the concept of "limited liability" as applied to corporations referred to financial liability for the debts of the corporation.

Sure a supervisor can be criminally prosecuted for their indirect role in an employee's crime, but that's because of his supervisory role, not his ownership status. And that's true with corporations as well as unincorporated companies, and is a different issue than limited liability.

 

[Al68]

The concept of a corporation is troubling from a right anarchist view (note the historical form of anarchism known as mutualism) as well, since collective responsibility is divorced from individual responsibility. It seems essential that some individual must ultimately be responsible for a collectively undertaken action ( a situation where any individual contribution is not per ce harmful but the totality of the action is) or a corporation becomes a means of avoiding responsibility. I think this is one of the reasons the term "corporation" has gotten such a negative modern connotation.

Sure, but it's based on a popular misconception. Forming a corporation itself doesn't legally exempt anyone from responsibility for anything. The reason shareholders aren't financially responsible for the debts of a corporation is because they never agreed to be personally responsible as a condition for credit. When a creditor offers credit to a corporation, it knowingly does so in the absence of an agreement by shareholders to personally be responsible for paying it back.

As far as criminal acts, this has been discussed in other threads, and I don't want to sidetrack this one, but a criminal act can be prosecuted against any participant in it. Forming a corporation doesn't legally exempt anyone from prosecution for criminal acts.

 

[vertices]

Sure, but it's based on a popular misconception. Forming a corporation itself doesn't legally exempt anyone from responsibility for anything. The reason shareholders aren't financially responsible for the debts of a corporation is because they never agreed to be personally responsible as a condition for credit. When a creditor offers credit to a corporation, it knowingly does so in the absence of an agreement by shareholders to personally be responsible for paying it back.

As far as criminal acts, this has been discussed in other threads, and I don't want to sidetrack this one, but a criminal act can be prosecuted against any participant in it. Forming a corporation doesn't legally exempt anyone from prosecution for criminal acts.

And this is crux of the issue. Shareholders aren't liable for anything but at the same time, corporations (which have the rights of a flesh and blood person) have a legal obligation to ensure profits for these invisible shareholders are maximised.

The denial of human rights and ecocrimes are cast aside as "externalities". I raised the issue of slavery before because it is the most glaringly obvious example of the consequences of unchecked capitalism.

Examples of modern day slavery in the US include turning Mexico into a virtual sweatshop as a result of Nafta, and instituting modern-day slavery under the pretext of a "war on drugs".

 

[mikelepore]

Maybe my question wasn't clear: The seller relevant to my question is originally the person(s) who's labor creates the "tool" being sold. The buyer would inquire by asking the seller. Neither would inquire about anything with any agent of the proposed Marxist system.

In other words, what is the penalty for ignoring the Marxist system and practicing capitalism as if the Marxist system didn't exist?

Thank you for being patient enough to try to communicate with me although we have such different vocabularies and assumptions.

I don't see why you're assuming that anyone wants penalties. I'm taking the position that certain outcomes cannot arise, so to ask what is the penalty is like asking what should be the penalty for cheating at the horse races by going back to yesterday in a time machine after you find out the name of the winner. There is no penalty because the action cannot occur.

Socialists don't want to stop people from selling their labor. They want a system in which, as soon as someone begins to work at any job of their choice, they immediately acquire the rights of full partnership in the management, just as the citizens in a republic are entitled to certain participations. Socialists want the workplace to be a republic.

You said that I want to "outlaw" capitalism --you can only say that in the same sense that the U.S. Constitution doesn't provide for having any aristocracy, so you might say that the Constitution outlaws every individual aristocrat, but the situation it is better described by saying that an individual never turns out to be an aristocrat in the first place, and therefore doesn't need to be outlawed after having become one.

Note what conclusion follows from the socialist axiom that a profit-based system means that the workers receive only a fraction of the equivalent of their labor. Even if you don't accept that axiom, what does it logically imply? Under capitalism the worker searching for a job may get paid 21 percent with the xxx corporation, or 23 percent with the yyy corporation, or 17 percent with the zzz corporation. Because the worker gets less than 100 percent no matter where he or she goes, there is something called a negotiation process. However, if the system were different such that the worker receives 100 percent no matter where he or chooses to go, then there would be no negotiation, not because it forbidden to negotiate, but because an there would be no fraction to be negotiated.

I don't know where you see any possibiliity of an action that could invoke a penalty. Of course, if someone says "socialism stinks" and that thought makes them so angry that they throw a rock at somebody, then they should be prosecuted for throwing a rock at somebody, and they say "socialism stinks" and that thought makes them so angry that they commit arson, then they should be prosecuted for arson. But I can't visualize the kind of event that you're talking about, in which someone did something purely economic and it isn't tolerated.

Your newest phasing says "the person(s) who's labor creates the 'tool' being sold." People should have the right to create, use or sell any tool they wish. People should have the right to do anything whatsoever as long as they don't infringe on the enumerated rights of others. Insisting on that principle is why we're libertarians. Of course, if, in the process of creating that tool, we were to dump cancer-causing pollution into a river that some other people drink from or fish in, then we should get whatever the penalty is for attempted murder. However, you're not prepared to admit that such anti-social consequences are ordinary parts of capitalism.

You also didn't comprehend my explanation that capitalism cannot exist in an environment in which there is no legal provision to enforce contracts -- a system in which the court and sheriff just say "take your personal squabbles out of here." So it's what government doesn't do, not what it does, that abolishes capitalism.

 

[mikelepore]

I think you're referring to the concept of limited liability which has nothing to do with criminal law, it's about financial liability. It just means that if I own stock in GM, and GM gets sued or otherwise obtains debt, my personal financial liability is limited to the value of my stock. Nobody can sue me for my house because of something I didn't personally do, they can only get what I have invested in the company.

As far as criminal acts, no such law is needed, since no law existed allowing the criminal prosecution of a person for a crime he didn't commit or even know about.

The managers are the agents of the stockholders, where I use the word "agents" in the legal sense. The directive given by the stockholders to the managers is: maximize profits, do whatever you find you have to do in order to maximize profits, don't tell me about it -- just get it done somehow, and then send me the maximized dividend.

This is a reckless arrangement that is similar to being a drunk driver, in that the outcome may not premeditated but there is common knowledge of that the recklessness often leads to certain outcomes.

In the case of the 1971-1976 Ford Pinto -- this was proven in court -- the company's own estimate was that 180 people would be burned to death and another 180 people seriously injured because of the design of the car, leading to an estimated loss to the company of $49.5 million in lawsuits. The managers compared that number to the estimated cost of $137 million to make the car safe, and they made the conscious decision to have their customers burned to death. They were also explicit in saying it. They said to use the exploding gas tank.

It is an act of reckless endangerment to have a business operate with the charter of maximizing profits. Just as the drunk driver usually makes it home without running over anyone, a business sometimes gets lucky and doesn't kill anyone in a given year. That good luck doesn't negate the general recklessness of using the profit motive.

As for not knowing, when the Mafia boss tells the hit man to "take care of that situation", "see to it that that person will no longer a problem for us", the boss doesn't tell the hit man exactly what to do, and yet there is a reasonable conclusion that the situation is as likely to be almost as lethal as running a large manufacturing company based on the profit motive.

At Love Canal, the Hooker Chemical Company, a subsidiary of Occidental, dumped dioxin, one of the most toxic compounds known, into a hole in the ground. The curve on the map where the ooze got into people's basements and wells is the identical curve as the curve on the map where the elevated rates of fatal illnesses were later reported. The company even covered the dump with backfill and then sold the land it to the City of Niagara Falls school district so they could build a school on top of it.

Did the stockholder premeditate the killing of John Doe? Of course not. Just as the drunk driver didn't premeditate running over John Doe. The situation is just one that everyone knows leads to the statistical outcome.

Here's an interesting statistic. When the Chrysler building was constructed in New York, the managers told the workers that they had several years to get the job done, and were somewhat tolerant of delays due to safety reasons. Nevertheless, one worker was killed on the job. When the Empire State Building was constructed, the management kept nagging the workers to work faster and faster, and insisted that the building had to be constructed in 18 months. As a result, 14 workers were killed on the job. (Another rush project, 31 workers were killed during the construction of the Alaska Pipeline.)

The profit motive has to be abolished. It's a form of drunkenness. It kills indirectly, not by premeditation, but with "statistics."

 

[Al68]

I'm taking the position that certain outcomes cannot arise, so to ask what is the penalty is like asking what should be the penalty for cheating at the horse races by going back to yesterday in a time machine after you find out the name of the winner. There is no penalty because the action cannot occur.

This makes no sense to me. If there is no penalty, what would stop people from operating a business for profit, hiring others, working under mutually agreed terms, etc?

Socialists don't want to stop people from selling their labor. They want a system in which, as soon as someone begins to work at any job of their choice, they immediately acquire the rights of full partnership in the management.

They don't "acquire" those rights in capitalism because they have those rights to start with. Those are the rights they are choosing to sell in an employment agreement. Those are the rights that socialists want to deny are owned by each individual worker. Ownership means the right to sell or trade, not just the right to use for himself. Is it not obvious that insisting that a worker keep his "management control" of his labor is the same as denying his right to sell it (ownership)?

Socialists want the workplace to be a republic.

And I object to that because an individual's labor doesn't rightfully belong to others in society, it belongs to that individual.

Note what conclusion follows from the socialist axiom that a profit-based system means that the workers receive only a fraction of the equivalent of their labor. Even if you don't accept that axiom, what does it logically imply? Under capitalism the worker searching for a job may get paid 21 percent with the xxx corporation, or 23 percent with the yyy corporation, or 17 percent with the zzz corporation. Because the worker gets less than 100 percent no matter where he or she goes, there is something called a negotiation process. However, if the system were different such that the worker receives 100 percent no matter where he or chooses to go, then there would be no negotiation, not because it forbidden to negotiate, but because an there would be no fraction to be negotiated.

Even if I accepted that axiom, the actual material wealth that the 100 percent applies to in socialism is not the same material wealth the fraction applies to in capitalism. As I mentioned before, there is a gap between the value of labor to an employer as a result of a capitalist employment agreement and the value of that labor to the worker in the absence of such an agreement. The negotiation takes place within that gap so that both parties benefit. The employer pays less than the value of the labor resulting from the employment, and pays more than the value of the labor in the absence of that employment agreement. You just can't say that 100 percent is better than 23 percent, ignoring the fact that the total wealth that the 100 percent applies to is less than 23 percent of the wealth that the 23 percent applies to. Far, far less, going by past experience with socialism worldwide.

This is all besides the fact that the specific numbers you mention aren't even close to realistic.

But I can't visualize the kind of event that you're talking about, in which someone did something purely economic and it isn't tolerated.

So operating a business for profit would be tolerated? All mutually voluntary employment would be tolerated?

Your newest phasing says "the person(s) who's labor creates the 'tool' being sold." People should have the right to create, use or sell any tool they wish.

Really? That was in response to your statement that certain tools would not be "up for sale"?

Of course, if, in the process of creating that tool, we were to dump cancer-causing pollution into a river that some other people drink from or fish in, then we should get whatever the penalty is for attempted murder. However, you're not prepared to admit that such anti-social consequences are ordinary parts of capitalism.

By that standard, murder is an ordinary part of capitalism and socialism.

You also didn't comprehend my explanation that capitalism cannot exist in an environment in which there is no legal provision to enforce contracts...

I comprehended just fine, and agreed that that legal institutions aided capitalism in that regard. But the point I was making is that in capitalism, the contents of the agreements are determined solely by the parties to the contract, not by a third party.

And when government does get involved, such as enforcing a contract, prosecuting theft or fraud, etc, it does so as an agent of a party to the contract, not as a third party.

 

[mheslep]

The Ford Pinto question has been addressed, here:
http://www.youtube.com/watch?v=iPqdRqacpFk&NR=1"

part 1/2
http://www.youtube.com/watch?v=ev_Uph_TLLo&NR=1

 

[mikelepore]

This makes no sense to me. If there is no penalty, what would stop people from operating a business for profit, hiring others, working under mutually agreed terms, etc?

I can only answer that regarding specific activities.

As for operating a business:

If you mean trade arrangements that anyone can make without having the fortunate access to certain resources (I'll give you dancing lessons if you'll paint my house, I'll give you some garden cucumbers if you'll mow my grass) then no one should have any desire to stop such activities. They are entirely positive.

If you mean business that requires the fortunate access to certain resources, then private ownership of the business my be ensured by not allocating the resources. For example, the building of the Central Pacific Railroad required that someone would own land that was so large that it went from Utah to California. If there had not been such a form of private land ownership, then the railroad could not have been owned by a private company.

As for hiring others:

If you mean one person hiring one person (you hire me to fix your snowblower, or to install your kitchen cabinets), I agree with the same laissez faire principle that you do. It's no one else's concern, it's a private matter among the parties to the agreement, and the fact that it benefits both parties makes it a fully positive tradition.

But the main focus should be on work organizations consisting of many people. Marx, who was one of the first writers to use the word "capitalism", and gave the word its common meaning, the meaning that you don't agree with, wrote:

"Capitalist production only then really begins, as we have already seen, when each individual capitalist employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on on an extensive scale and yields,
relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production." ['Capital', chapter 13]

In mechanized mass production carried out by hundreds or thousands of people working side-by-side, the efficiency comes from the scale. An individual cannot do it. You cannot take the simple tools that you have in your garage and make a line of automobiles. Even if you could do it, you would have to give them such a high price that no one else would buy them, and if you needed workers you would have to pay them such low wages that no sane person would take the job. There doesn't have to be any other aspect in a socialist world that will prevent a return to capitalism. The social institution would use automated mass production. In a socialist environment, as a would-be capitalist you would be limited to making clay pots or wooden picnic tables, or some other product that doesn't require a large building full of machines and operated by a large number of people, and even then, the robotic automation of the socially owned industry could do it with so much more efficiently that any attempt to compete with it would be a waste of your own time. Socialism wouldn't need any "penalty" to inhibit the individual who is hammering away out in the backyard. There is no challenge to the social system in those small activities.

 

[Al68]

If you mean business that requires the fortunate access to certain resources, then private ownership of the business my be ensured by not allocating the resources.

Private businesses in the U.S. (in general) aren't "allocated" resources now, yet they exist now. What will prevent people from doing exactly what they do now: build, work at, own, and operate businesses for profit using voluntary agreements?

Here's an example: Someone decides to employ workers, build a factory, make a product, and sell the product to others. Workers decide to accept the employment, and others decide to buy the product. In the absence of force used against them, they could do exactly that. What would stop them?

Simply saying such things wouldn't happen doesn't answer anything. This issue is about what actions are being advocated, not just about a desired resulting situation.

If you mean one person hiring one person (you hire me to fix your snowblower, or to install your kitchen cabinets), I agree with the same laissez faire principle that you do. It's no one else's concern, it's a private matter among the parties to the agreement, and the fact that it benefits both parties makes it a fully positive tradition.

But you reject that same exact principle in other examples.

Marx, who was one of the first writers to use the word "capitalism", and gave the word its common meaning, the meaning that you don't agree with, wrote:

"Capitalist production only then really begins, as we have already seen, when each individual capitalist employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on on an extensive scale and yields,
relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production." ['Capital', chapter 13]

This is not the definition I disagreed with. Marx's example here (assuming Marx's definition of "capitalist" to mean "employer" and "mastership" to mean "supervision of work"), is a perfect example of capitalism by my definition. The situation described is a voluntary agreement solely between the parties involved, with no mention of any third party involvement, such as a government, or any "economic system" being imposed.

But that quote is far from representative of Marx's claims about capitalism, as I'm sure you know.

Socialism wouldn't need any "penalty" to inhibit the individual who is hammering away out in the backyard. There is no challenge to the social system in those small activities.

Why are larger activities such a "challenge"? If socialism would be so great for workers, why the desperate need to prevent private employers from offering them an alternative employment agreement? Why the need for an employment "monopoly"?

Why are voluntary (private) employment agreements between people such a threat to socialism?

Why not just establish a socialist society, use whatever land is needed for that purpose, invite whoever wants to join, and leave everyone else alone? Why the need to control those who don't choose socialism voluntarily?

This is an important aspect of libertarianism: People are perfectly free to organize into a socialist society, and make any rules they want, as long as they don't use force against others. Libertarianism doesn't prohibit socialism, it recognizes the right of each individual to own their own labor, which includes the right to use it in a socialist organization.

 

[vertices]

The Ford Pinto question has been addressed, here:
http://www.youtube.com/watch?v=iPqdRqacpFk&NR=1"

part 1/2
http://www.youtube.com/watch?v=ev_Uph_TLLo&NR=1

Just watched the video - thanks for posting.

It seems to me that there is a huge problem with MF's "principle" of attaching a monetary value to a human life because in a capitalist system, this will always be undervalued.

Businesses have an incentive to hide such risks from consumers. Ford never told people they were skimping out on proper reinforcements for their Pinto fuel tanks, and thus consumers were not able to make an informed decision about their purchase.

This illustrates just how important government regulations are in free markets. I do find it rather odd that MF, in the later part of the video, made it a point to implicitly emphasise this - and there was me thinking he's a free market fundamentalist

 

[vertices]

Marx's example here (assuming Marx's definition of "capitalist" to mean "employer" and "mastership" to mean "supervision of work"), is a perfect example of capitalism by my definition. The situation described is a voluntary agreement solely between the parties involved, with no mention of any third party involvement, such as a government, or any "economic system" being imposed.

There is a fundamental problem with the bit in bold.

In a free market (and more so in a idealistic "true" free market), others are involved in and affected by such 'agreements', even if they are not party to them. mheslep posted an interesting video (which I commented on in my previous post) in which Milton Freidman explains the "principle" of attaching a monetary value to a human life: this is an example of the 'economic costs' and systemic 'risks' that are seriously underpriced, when, and if, they are factored into these agreements. This is what makes free markets so very inefficient (and the taxpayers ultimately end socialising these inefficiencies - the most recent example of this being the bank bailouts in the UK and US).

 

[AlexES16]

Well the best economic system will be a mix of capitlaism and socialism. Socialism for the big indsutries such as a energy and for human development industries such as a education and health. Big corporations only care about profits not the human. This capitalist care even less about enviroment. The problem is that everyone associates socialism with USSR, Cuba, China, North Korea and they are examples of what can go wrong with doing things in the name of socialism

 

[AlexES16]

The Whole thing of self interest some times can be good but at the ends makes a minimalistic view of humans, which personally i feel it makes you less human.

 

[AlexES16]

So much talk about the "free market" that is just another ideal, so it fallsl in dellusion just like Commuism fall in the ideal human buda/christ dude.

 

[Vanadium 50]

This capitalist care even less about enviroment.

Ever hear about places like Lake Karachay, Dzerzhinsk or Chernobyl?

The problem is that everyone associates socialism with USSR, Cuba, China, North Korea and they are examples of what can go wrong with doing things in the name of socialism

Don't forget Cambodia.

Funny how everyone who advocates this uses the argument, "OK, it's failed every time we've tried this, it's led to more misery and suffering - but this time, things will be different." If you do the same thing, why expect different results?

 

[eaglezfan187]

Ever hear about places like Lake Karachay, Dzerzhinsk or Chernobyl?



Don't forget Cambodia.

Funny how everyone who advocates this uses the argument, "OK, it's failed every time we've tried this, it's led to more misery and suffering - but this time, things will be different." If you do the same thing, why expect different results?

Fair enough, but were those failed "socialist" states really socialist at all? Do you really think that the leaders of North Korea, Cuba, Russia, and China really wanted a socialist state, or did they disguise it as a socialist state in the attempt to give more power to the state, and as a result those leaders had more power. Last time I checked communism is about equality and the greater good yet none of those failed communist states had any equality at all. In those examples, communism didn't fail, it was the leaders that failed. These states used the name of communism to form totalitarian militant governments which is just as far from democracy as it is communism.

 

[CRGreathouse]

This is what makes free markets so very inefficient (and the taxpayers ultimately end socialising these inefficiencies - the most recent example of this being the bank bailouts in the UK and US).

"An example of the inefficiency of the free market is [example of something anti-free market]."

 

[mheslep]

This capitalist care even less about environment.

Ever hear about places like Lake Karachay, Dzerzhinsk or Chernobyl?

And the http://en.wikipedia.org/wiki/Aral_Sea" , what's left of it.

 

[mheslep]

Just watched the video - thanks for posting.

It seems to me that there is a huge problem with MF's "principle" of attaching a monetary value to a human life because in a capitalist system, this will always be undervalued.

I think you missed his point. By using the term 'undervalued' above, you imply you have some way of knowing the value of a human life. What is it?