Archives for posts with tag: Anarcho-Capitalism

This is Part 2 in my series about different theories of power. My previous article in this series, Theories of Power: Part 1, Pluralism, addresses the pluralist view of power. Pluralism, very briefly, is the view that power is held by various groups in society. It is like the theory of free markets applied to the political realm because both are based on competition. In free markets, capitalists compete with one another for the “votes” of consumers; similarly, in pluralism, there is competition among various interest groups for votes.  G. William Domhoff,  in his article Who Rules America: Alternative Theoretical Viewssuccinctly summarizes what pluralism stands for when he writes, “who controls the state”:

the American public through political parties, elections, interest groups, lobbying, and the force of public opinion as pluralists claim.

The “trick” to make society work, according to pluralists, is to make sure that power is dispersed among many groups. As Domhoff tells us:

Most of these “society-centric” analysts have been pluralists. That means the control of the state by private interests was not to be deplored because many different groups were involved.

Now in this article, I move on to another theory of power, namely, the State Autonomy Theory. The plan for this paper is simply to:

  1. Summarize the major points of the State Autonomy Theory based on G. William Domhoff’s article Who Rules America: Alternative Theoretical Views
  2. Apply the insights of the State Autonomy Theory to the Right Wing Libertarian or Austrian School views on the government and state, because I think there is some noticeable overlap here

The Major Points of State Autonomy Theory

My general impression of the State Autonomy Theory is that it views the state as some sort of super alien being with its own dominant will that is detached from the rest of society. It is as if there is society in one corner of the room and the state in another corner.  Power is not in the hands of the general citizenry, nor is it in the hands of a dominant social class. Instead, the government has “independence from the rest of society” or is considered an “autonomous” entity. Domhoff, echoing what John Taylor Gatto wrote in Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling, tells us that under the State Autonomy Theory, “the state can and does act in its own interests, which are stability and expansion.” Gatto said a similar thing when he writes that “nearly a century ago a French sociologist wrote that every institution’s unstated first goal is to survive and grow, not to undertake the mission it has nominally staked out for itself” (58). In fact, the State Autonomy Theory seems to even echo some of the ideas coming from a book you can download for free at the Mises Institute, Gunter Reimann’s The Vampire Economy: Doing Business Under Fascism. In Reimann’s book, he mentions how the state seems to take on a “mind of its own” when it gets away from its original architects. Reimann explains how the original big business architects of Nazism had intended to create a Nazi state as their tool; unfortunately for these Nazis, their tool got out of hand and the Nazi state developed a mind of its own:

It was their hope that the Nazi party would serve as their tool. Especially was this the belief of the important industrialists who had feared the loss of their monopolies, and of the big agrarians who could not survive the crisis without fresh State subsidies. Both eagerly sought political power in order to safeguard their positions–not merely against social revolutionary forces, but also against business competitors who attacked their monopolist privileges. They invested huge amounts of money in the Nazis. They did this, or had to do it, on too large a scale. For the power they helped create all too soon became the master of its creators–“authoritarian,” independent of their will and regulation. (291-292, bold emphasis mine)

Since the state is this independent and autonomous unit with its own will, according to the State Autonomy Theory, then “government officials can enter into coalitions with groups in society, whether business, labor, or political parties, if they share the same goals as the state” (Domhoff, Who Rules America: Alternative Theoretical Views). When asked “who controls that state,” Domhoff replies:

elected officials, appointed officials, and career employees as the state autonomy theorists claim.

Domhoff tells us that there are three major reasons that explain how the state becomes this independent monster with its own will (with bold emphasis mine):

  1. its monopoly on the legitimate use of force within the country
  2. its unique role in defending the country from foreign rivals
  3. its regulatory and taxing powers

Finally, the last point I want to mention about the State Autonomy Theory is that it stresses the autonomy or independence of the state from corporate or capitalist power. In other words, the state and capitalism are two distinct entities. We see this very clearly when Domhoff writes the following about how the state and capitalism interact under the State Autonomy Theory:

In a capitalist world, the state’s leaders do their best to keep capitalism healthy because that is in their own interests in terms of state revenues and a happy civilian population, not because they are first and foremost concerned with capitalism and capitalists. (bold emphasis mine)

Applying the State Autonomy Theory to Austrian Economic Views of the State

My sneaking suspicion is that the Austrian School approach to the state and the State Autonomy’s approach to the state share some noticeable points of overlap. Let me explain why I think this overlap exists.

First, notice that the State Autonomy Theory creates this separation between the state and capitalism. This, of course, is the essence of the Austrian school anarcho-capitalism–this view that we can separate capitalism from the state and we can abolish the state while keeping capitalism.

We have the state as this independent will that can enter into “coalitions” or alliances with different groups in society. Domhoff mentioned a few of these possible “alliance partners” with the state: business, labor and political parties. Let’s translate a few of these into “Austrian” lingo:

  1. Let’s say that the independent and autonomous state forms an alliance with labor. Then all these “socialist” type laws will be passed–welfare, unemployment insurance, occupational health and safety laws, minimum wage laws and so on. Then, the reaction will come in the form of Austrian books such as Hans-Hermann Hoppe’s Democracy: The God that Failed. Democratic states are just monsters out there ruining the economy by distorting time preference and looting the productive assets of the economy. Or as Hoppe puts it, “it must be regarded as unavoidable that public-government ownership results in continual capital consumption. Instead of maintaining or even enhancing the value of the government estate, as a king would do, a president (the government’s temporary caretaker or trustee) will use up as much of the government resources as quickly as possible, for what he does not consume now, he may never be able to consume” (24).
  2. Let’s say instead that the independent and autonomous state is thinking about forming an alliance with business. Now we have the textbook Austrian School distinction between the “market” entrepreneur and the “political” entrepreneur coming into play. Because capitalism is separated from the state, according to the State Autonomy Theory, then we can have the Austrian “market” entrepreneur scenario, i.e., the story of the entrepreneur who gets rich by only engaging in free market transactions and by never getting any state assistance. The “market” entrepreneur is the “good guy” who totally separates his capitalist enterprise from the state. If, on the other hand, an alliance is actually formed between the autonomous state and business, then we have the textbook Austrian “political” entrepreneur scenario. In the “political” entrepreneur scenario, the “bad” capitalist (unlike the “good” Austrian capitalist) is running to the government for some nefarious alliance, maybe a subsidy or a bailout or protection from foreign competition and so on.  I have written more about this Austrian distinction between the “good” market entrepreneur and the “bad” political entrepreneur in my articles Doubting the Right Wing Libertarian Robber Baron Revisionism and More on James J Hill: Putative Market Entrepreneur Extraordinaire.

The last point I will make is to simply point out that there is some obvious overlap between the Austrian theory of the state and what is offered by the State Autonomy Theory when it comes to the issue of what constitutes “state independence”? In the State Autonomy Theory we are told that “state independence, usually called ‘autonomy’ is said to be due to several intertwined factors.” I listed those three major factors above, but let me reproduce them again. This time, however, keep in mind that I am trying to illustrate the overlap with the Austrian theory of the state:

  1. its monopoly on the legitimate use of force within the country
  2. its unique role in defending the country from foreign rivals
  3. its regulatory and taxing powers

Now let’s go pull out Hans-Hermann Hoppe’s book Democracy: The God that Failed in order to show that all three of the above issues from the State Autonomy Theory are pretty much what Austrians obsess about when it comes to the state.

Chapter 2 in Hoppe’s book begins by saying that

a government is a territorial monopolist of compulsion [sounds like “force” to me]–an agency which may engage in continual, institutionalized property rights violations and the exploitation–in the form of expropriation, taxation and regulation–of private property owners. Assuming no more than self-interest on the part of government agents [the State Autonomy Theory!], all governments must be expected to make use of this monopoly and exhibit a tendency toward increased exploitation. (45, bold emphasis mine)

Well, the overlap isn’t exact, since Domhoff tells us that the state would try to keep capitalism going by keeping capitalism healthy, while Hoppe tells us that the complete opposite will happen when he writes about the “increased” exploitation.  But notice the overlap. Both Hoppe and Domhoff mention that the state is a (1) monopolist, (2) of force or compulsion, with the power to (3) tax and regulate. And notice how Hoppe specifically states that there is “self-interest on the part of government agents.” That is precisely what we find in the State Autonomy Theory: “for the state autonomy theorists, then, the state can and does act in its own interests.

I don’t want to belabor this, but one could find relatively easily Hoppe bemoaning the fact that the state is the monopoly defense provider as well. This, of course, would demonstrate that Hoppe–our Austrian school economist–is in conformity with point 2 of the State Autonomy Theory. This is the topic of Hoppe’s chapter 12, where he begins this chapter by stating that

I will demonstrate that the idea of collective security is a myth that provides no justification for the modern state, and that all security is and must be private (239).

And finally, to conclude my article, I want to point out the significance of linking the Austrian school’s views about the state to those offered by the State Autonomy Theory. This is because it provides for some new approaches to criticizing the Austrian School of Economics. The criticisms that are leveled at the State Autonomy Theory could possibly be turned around and leveled at the Austrian School as well.  If you read Domhoff’s article, it is fairly obvious that he strongly dislikes the State Autonomy Theory; Domhoff is quite convinced that the State Autonomy Theory is wrong mainly because it just does not apply to the United States. I will end my article by citing Domhoff on this very important point:

Even with the idea of potential autonomy available as a way to concede that there is corporate dominance in the United States, they insist on giving the American state considerable autonomy. However, there are many reasons why this potential does not manifest itself in the United States. State autonomy is only possible when a state is unified and relatively impermeable to the employees and representatives of private organizations. But the American government is neither. (bold emphasis mine)


One style of writing that I take umbrage at is the style that declares that it has found the “truth” of a particular topic. In my previous articles, I made criticisms of Thomas DiLorenzo’s Austrian School of Economics interpretation of the “robber” barons, getting my inspiration from his chapter entitled “The Truth About the ‘Robber Barons.'” The articles I am referring to are my Doubting the Right Wing Libertarian Robber Baron Revisionism and my sequel article called More on James J Hill: Putative Market Entrepreneur Extraordinaire.

True to form,  the right wing libertarians and Austrian School types also provide us with the “truth”of  i.e., a revisionist account of, the story of the American Thanksgiving holiday.  In fact, this version of history seems to be quite popular when one looks online. In fact, the New York Times felt it necessary to publish a rebuttal of sorts to what is being circulated by right wing libertarians as the “corrected” version of American Thanksgiving history. So this right wing libertarian version of events must be ruffling some feathers.  For example, Right Wing Watch has a paper called “Right Wing Continues to Push ‘Socialist Pilgrims’ Myth.”

The Plan of Attack

  1. Summarize the state of this debate, which has been framed as “capitalist” good guys versus “socialist” bad guys
  2. Look at an alternative non-capitalist approach to see if we can find some better interpretative tools, which will help us possibly resolve this debate. I will look at a an anarchist paper from what is probably the perspective of Pierre Joseph Proudhon.
  3. I will give some of my thoughts and opinions on what I think all of this means.

1. Summarizing the “Capitalist” versus “Socialist” Debate

So let me quickly summarize what seems to be going on in this debate, which has been framed as “good” guy versus “bad” guy. This is the same approach that you will find me criticizing  in my previous articles, the ones I linked to above, in which the world is divided into the “good” market entrepreneurs and the “bad” political entrepreneurs. In this discussion of the story of the creation of the American Thanksgiving holiday, the “good” guys are the putative capitalists and the “bad” guys are the putative “socialists.”

I read the right wing libertarian and Austrian School version of events at this particular link entitled, The Great Thanksgiving Hoax by Richard J Maybury. You can find a similar approach in Thomas J DiLorenzo’s book, How Capitalism Save America: The Untold History of Our Country, from the Pilgrims to the Present. The basic story is that the Pilgrims started out as socialists but then through some miracle they learned from experience and not an axiom that socialist common land ownership doesn’t work in the real world. So using this experience, they become capitalists, and capitalism saves them all from famine. The lesson learned is simply that capitalism means prosperity, and socialism means death and starvation.  Let me quickly cite the germane points from the article. First, we have the “bad” socialists screwing everything up badly:

This “from each according to his ability, to each according to his need” was an early form of socialism, and it is why the Pilgrims were starving.”

The socialists are of course indolent and lazy:

The problem with this official story is that the harvest of 1621 was not bountiful, nor were the colonists hardworking or tenacious. 1621 was a famine year and many of the colonists were lazy thieves.

The problem of course is rooted in the lack of property rights–those silly socialists–specifically the lack of land ownership. We will have to ignore the fact that there used to be a sharp distinction between the “land” factor of production and the “capital” factor of production but these two distinction concepts got fused together in order to confuse discussions of political economy if we are to believe the Georgist interpretation of Economic history. This takes me way off course from the point I want to make in this article; however, if you are interested in this debate about how the land-labor-capital distinction got collapsed into the labor-capital distinction, see Mason Gaffney and Fred Harrison, The Corruption of Economics. So the fact that this argument is about the “land” factor of production and not the “capital” factor specifically might be one way to illustrate that this argument shouldn’t be framed as “capitalism” versus “socialism.” We aren’t specifically dealing with capitalists; we are dealing with land owners and workers. But forgive me for my slight digression into the possible “equivocation fallacy” surrounding this entire debate. But, back to the right wing libertarian version of history.

To rectify this situation, in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of famines. (bold emphasis mine, it will come in handy later)

Remember, the article that I am citing from is reprinted from so we know that this is all meant as evidence for either Misesian laissez-faire economics and Rothbardian anarcho-capitalism. I first heard about all of this stuff from Thomas J DiLorenzo’s book How Capitalism Saved America: The Untold History of Our Country, From The Pilgrims to the Present. If we turn to Chapter 3, entitled How Capitalism Saved the Pilgrims we see that this entire debate is being directly framed as “capitalism” versus “socialism”:

Communal land ownership certainly caused problems for the Pilgrims, but, Bradford noted, “God in His Wisdom saw another course fitter for them”–and that course was private property. The “common course” was abandoned. By 1650 privately owned farms were predominant in New England….Securing property rights not only saved those fledgling settlements but also made it possible for other colonies to flourish. (60)

On the previous page, DiLorenzo gives us the same basic story: lazy socialists, then every man is given some land, and finally this results in prosperity:

Setting “every man for his own particular” meant establishing private plots of land. Immediately, those who had been lazy and indolent became “very industrious,” so much so that women who had previously pleaded frailty worked long and hard–once they saw how they and their families cold benefit from such hard work. (59)

2. Looking at an Anarchist Paper

So let us turn to an anarchist paper called Bad Books, Austerity, Democracy, and Thanksgiving Myths, at the Anarchist Writers. In this article, we see the same basic point, that the land was held communally, but then it was distributed to all the men:

The right’s notion of capitalism against socialism seems to flow from William Bradford’s 1650 History of Plymouth Plantation:

“At length, after much debate of things, the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other thing to go on in the general way as before.”

The issue at this entire debate hinges on what they did with the land. How did they go about parceling it out.  I tried to highlight this point about “everyone getting a little bit of land” in my discussion above. DiLorenzo seems to be saying that when he wrote about how they set “‘every man for his own particular’ [which] meant establishing private plots of land” (59). In the article called The Great Thanksgiving Hoax (the article I have been citing from throughout), we have this key line: “He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit.”

As the Anarchist Writers points out, the problem is that what the capitalists are describing is not capitalism. They put it rather humorously (since they are obviously enjoying how silly this capitalist argument is), so I will just quote them, and then I will give a dry, academic explanation of what they are saying in part 3 of my article:

Ironically, though, the propertarians [they mean the anarcho-capitalists, the right wing libertarians] fail to recognise that this was not capitalism! Everyone had their own parcel of land–they were self-employed! They kept the product of their own labour. If it were capitalism, they would have given the land to a few landlords and turned everyone else into wage-workers. The landlord would have kept the product of the workers’ labour and the actual workers, well, they would get just a fraction of what they produce. (bold emphasis mine)

3. My Comments and Interpretation

First of all, this whole argument of trying to read “capitalism” and “socialism” into what happened in the 1620s sounds like a dirty propaganda technique. In fact, it was the great Austrian economist Ludwig von Mises who warned against what his school is doing right now in his name:

It is an old trick of political innovators to describe that which they seek to realize as Ancient and Natural. (Ludwig von Mises, Socialism: An Economic and Sociological Analysis, 41).

I found that quotation to be quite amusing. Ancient. Natural. Ancient as in how we have supposedly found capitalism saving the day in the 1620s? Ancient in how DiLorenzo cites Aristotle in this discussion of the Pilgrims: “Bradford went on to blame the disastrous policy of collectivism on ‘that conceit of Plato’s’–the Greek philosopher’s advocacy of collective ownership of land, an idea that Aristotle had refuted” (59).  See Tony Endres’s review article in the History of Economics Review: An Austrian Perspective on the History of Economic Thought for this Austrian penchant of morphing Aristotle into an Austrian School Economist (page 152). And of course, a lot of right wing libertarian and Austrian school apologetics is based on appeals to “natural law.” On this attempt to defend right wing libertarianism using natural law, see L.A. Rollins The Myth of Natural Rights, and also Robert Anton Wilson Natural Law, or Don’t Put a Rubber on Your Willy. So in a way, Ludwig von Mises seems to be warning us against the “old tricks” of his own school.

(In all fairness to Ludwig von Mises, his current school, especially the Rothbardian wing, is a beast of its own, very different from the original Misesian version of laissez-faire capitalism. I first noticed this in the totally unconvincing attempt to turn Mises into an anarcho-capitalist by people such as Hoppe. It is a strikingly bad example of citing selectively. Please note that I am trying very hard to be as polite as possible as I can in this analysis. If you would like a rather scathing analysis of how the current Austrian school has abandoned its roots in Mises and Hayek, see the article by Dr. Oliver Marc Hartwich “The Errors of Hans-Hermann Hoppe.” What makes this article so valuable is that Hartwich supports Mises and Hayek and he is writing about his personal interacts with Hoppe. Dr. Hartwich objects to the current Austrian school in many ways: methodology (the a priori), trying to reduce everything to property issues etc., and thinks that Hoppe’s style of rhetoric is totalitarian: “It was shocking how close Hoppe’s language got to totalitarian rhetoric–and I wish to underline that I am only talking about rhetoric here, not about contents–but this is just another sign of how far away Hoppe has moved from the positions and values of classical liberalism.”)

In other words, this entire discussion smacks of political propaganda and political tricks. So it isn’t really very scientific in its approach. However, since the mainstream media is probably not going to use anarchist theories to explain what is going on, we are sadly forced to read this “good” guy versus “bad” guy or “capitalism” versus “socialism” version of history of Thanksgiving.  But if we look at the evidence, it seems to me that what is being described is a form of anarchism called mutualism.

Let me quickly review the argument above, i.e., the argument that the Pilgrims were saved by capitalism. What did we see:

  1. The land was divided up so everyone got some land to work with–hence no land lords and hence self-employed workers (“he gave each household a parcel of land”)
  2. The producers got to keep everything they produced (“told them they could keep what they produced”)
  3. Free and voluntary exchange (“trade it away as they saw fit”)

But this basically is a textbook definition of mutualism–a type of anarchy, which is not capitalism. Mutualism is a type of socialism.  From the Anarchist Writers we see in the article entitled, Mutualism, yes and no, that

Mutualism is a libertarian form of market socialism. It is most associated with Pierre-Joseph Proudhon, the first person to call himself an anarchist….Mutualism aims to create a system of self-employed workers and cooperatives honestly exchanging goods and services in a market without interest, rent, profits, land lords, or capitalists. (bold emphasis mine)

So if I wanted to be a cocky and arrogant propagandist I might say at this point: well, if these capitalists were to interpret their own evidence correctly, they should be telling us that Mutualism saved the Pilgrims! Thanksgiving is therefore a story of how Mutualism saved the Pilgrims from starving to death! But I won’t, because this would just be another example of highly selective quoting of the historical record. It would be another example of trying to twist the historical record in order to get it to fit the Mutualist story.

The easiest way to see this is to note that there was some very important government activity going on in this entire “land distribution” saga of the Pilgrims. It makes no sense to argue that the government was acting in a Mutualist-anarchist sense for reasons that should be self-evident–anarchy and government don’t mix! With regard to the capitalist/right-wing libertarian version of the story, well, if the government is the source of land property, then how can this fit in with their capitalist story about the homesteading origins of land property? Well, it can’t.  The reason why right wing libertarians and capitalists would want to avoid this point is because it  smacks of original appropriation (i.e., the state seizes the land and gives it out to its favorites, in this case the land is given to its favorites, the Pilgrims), an interpretation of history that we will find coming from communists, not capitalists, that’s for sure! If we go to the website we find in their article about Thanksgiving called Thanksgiving and Telling the Full History that the land was stolen by the state and then given to the exploiter class, i.e., the Pilgrims:

The colonists decided they did not need to consult the Indians when they seized new lands, they only had to consult the representative of the crown (meaning the local governor)…Ely smooths over the differences between the Pilgrims and the Puritans, writing out of history that the original Pilgrims were a dissident group who attempted to live an apostolic life–creating a new commons, and contributing each according to their abilities, and receiving according to their needs. They were one of the many radical religious groups in England at the time that sought to live a life in common. Of course, just as the peasantry in England had been dispossessed, and the bourgeois hijacked their movements to themselves take over and develop capital, the same happened in Plymouth. (bold emphasis mine)

I guess the lesson to be learned here is that actual history doesn’t usually fit nicely into a category for apologetic reasons. To declare that capitalism saved the Pilgrims is just to search through the historical record, seize upon a few favorable quotes, and ignore the rest of the evidence. I have tried to draw upon a variety of sources and perspectives in order to–I hope–come closer to what actually happened with the Pilgrims.  I hope that my research has helped to illuminate what happened at that first American Thanksgiving.

The Mutualist, Pierre Joseph Proudhon