Center For A Stateless Society — A Thinktank Led by Economically Clueless People?
So I stumbled upon this FB post by Kevin Carson who is one of the main intellectuals behind the Center for a Stateless Society and decided to really look deeper.
Although I’ve been aware of the C4SS for over a decade and of Kevin’s existence, I’ve never really looked deeper. A few months ago I did watch/listen to a lengthy discussion between Carson and Roderick Long and although I don’t have much recollection of it I felt like the entire discussion was rather pointless to a Misesian like myself who feels like mankind will be on a smooth path to rapidly growing prosperity once we got fellow human beings to understand basic free-market principles. Philosophizing about different tweaks here and there about political and social structures IMHO is mostly a waste of time, and again, the fact that the talk had little to do with Misesian/Hayekian perspectives and their desperate desire to educate mankind made it a rather boring/unproductive discussion as I recall. But this post below and the little squabbles we are seeing in the libertarian world made me look again. After a few seconds searching I found this criticism of Hayek and his final book “The Fatal Conceit” recently published on Dec 2020. Wow! Since I happen to think that F.A. Hayek is BY FAR the most far-seeing intellectual of all time, and that his final book is a superb summary of his evolutionary ideas, I was really curious. Was I about to read something that saved me from massive intellectual errors? Would I have the open-mindedness and other traits necessary to perhaps admit to error? I had to look!
The article is packed with great Hayek quotes but IMHO it does ultimately stand on economic fallacies which reminds me of the following bit from Hayek:
“When I stressed that is genuine intellectual error that we have to fight, what I meant to bring out is that we ought to remain aware that our opponents are often high-minded idealists whose harmful teachings are inspired by very noble ideals. It seems to me that the worst mistake a fighter for our ideals can make is to ascribe to our opponents dishonest or immoral aims.
I know it is sometimes difficult not to be irritated into a feeling that most of them are a bunch of irresponsible demagogues who ought to know better. But though many of the followers of what we regard as the wrong prophets are neither just plain silly, or merely mischievous troublemakers, we ought to realise that their conceptions derive from serious thinkers whose ultimate ideals are not so very different from our own and with whom we differ not so much on ultimate values, but on the effective means of achieving them.
I am indeed profoundly convinced that there is much less difference between us and our opponents on the ultimate values to be achieved than is commonly believed, and that the differences between us are chiefly intellectual differences. We at least believe that we have attained an understanding of the forces which have shaped civilisation which our opponents lack. Yet if we have not yet convinced them, the reason must be that our arguments are not yet quite good enough, that we have not yet made explicit some of the foundations on which our conclusions rest. Our chief task therefore must still be to improve the argument on which our case for a free society rests.”
IMHO Mr. Carson simply lacks the proper understanding of, not only Mises/Hayek’s economic ideas, but especially Hayek’s deeper ideas on the emergence of the market order. But per above, “Yet if we have not yet convinced them, the reason must be that our arguments are not yet quite good enough, that we have not yet made explicit some of the foundations on which our conclusions rest. Our chief task therefore must still be to improve the argument on which our case for a free society rests.”
So let me quote a few parts and try to explain the errors:
Carson writes:
“Of course, Hayek might point out in response that an individual worker has no meaningful right of ownership in a state factory whose output is determined by a planning ministry in the national capital. And he would be correct to do so — although it would remain equally true that a factory owned by a large capitalist corporation is not private or individual property in any meaningful sense. The point is that the very distinction between “public” and “private” property becomes meaningless when we talk about national governments and oligopoly corporations that are not accountable in any real sense to those affected by them. It is for this reason that I go on to argue for a model of socialism based on social ownership of land, and of the means of production, through distributed, self-managed, human-scale institutions.”
Carson quotes what I’m pretty sure is some clueless Socialist Chris Dillow based on the little research I did:
“if you want to find people who still believe in central planning today, you should look not among Marxists but in company boardrooms. It’s bosses who believe complex systems can be controlled well from the top down….” And elsewhere: “My support for worker democracy owes less to Marx — who wrote little about post-capitalism — than it does to Hayek.”
The distinction between “public” and “private” organization is NEVER meaningless, especially in this context. A private corporation, no matter how large, is under immense pressure from existing or even non-existing but potential competitors, so its management must always be innovating and copying the innovations of competitors, and this includes paying laborers a ‘competitive wage’, otherwise they use their ‘freedom to trade’ their labor with another company/competitor. The above does NOT exist in ‘public’/government organizations who are coercive monopolies IMMUNE from the competitive pressures which motivate the creation and spread of superior information/order.
Carson, displays teenage-level Marxist economic ignorance via the usual focus on “Authority relations”, while paying lip service to Hayek’s superb focus on information he writes:
“Authority relations of the sort that exist within the managerial hierarchies of capitalist corporations, likewise, are the main barriers to aggregating the distributed knowledge of those directly engaged in the production process. When superior rungs of a hierarchy do not represent the lower rungs, and have interests opposed to theirs, those on the lower rungs have an incentive to hoard knowledge and to economize on effort. They know very well that any contribution they make to increased efficiency will be used against them in the form of downsizings, speedups, and increased management compensation. The capitalist managerial hierarchy, by its very nature, exists in order to extract value from those at the bottom; any gains in productivity will be appropriated by those in a superior position of power. Hierarchies exist, not because of their superior efficiency at aggregating dispersed information, but because of their superior efficiency at extracting a surplus from people who have a fundamental conflict of interest with the people they’re working for”
True, every actor/order is looking to gain as much as possible for himself in each trade, but once again, Carson fails to understand the crucial role that competition plays in motivating corporations/everyone to pay a ‘competitive wage’ which keeps the level or profit relatively uniform across all industries/corporations, and as the rate of production continues to increase thanks to innovations, the increases in wealth once again are used to compete for labor thus increasing their wages/wealth. “Corporations” exploit labor as much as labor exploits them. Why doesn’t the company I trade my labor for attempt to pay me half as much as they currently do? Because if they do so I’d quit and trade my labor with a competitor. Again “people who have a fundamental conflict of interest with the people they’re working for” …working is just trading, to the economically ignorant it appears I have a “fundamental conflict of interest with” amazon and Walmart when I purchase/trade stuff from/with them, I want to pay them as little as possible, and it is because I “exploit them” that they are motivated to compete with each other and in turn motivate their employees to work in the conditions they do. Companies can be seen as tools that employees use to increase their production. A teenager could produce hamburgers on his own, but by trading his labor with and using McDonalds he is now using a massive order with worldwide fame, a highly efficient productive/advertising structure/etc. and thus be more productive that way. He uses/exploits McDonalds as much as McDonalds uses/exploits him. In reality there is NO ‘exploitation’, there is only mutually beneficial trading, but this can only be properly understood with the right understanding of economics.
Carson writes:
“Now, as I already suggested, I’m agnostic on the relative efficiency of market pricing and horizontal planning, in a decentralized libertarian socialist economy. But I would also add that the value of prices as a source of information for the allocation of resources is only as good as the quality of the process by which the prices are generated. The “Garbage In, Garbage Out” rule applies. And the quality of input pricing under capitalism is almost entirely garbage. “Market pricing,” as such, does not result in calculational rationality if the prices are themselves irrational.”
All of these statements and their underlying fallacies have been addressed by Mises/Hayek. To say that one is “agnostic on the relative efficiency of market pricing” is like saying one is agnostic regarding the ability of natural selection to create order. The statement “the quality of input pricing under capitalism is almost entirely garbage.” is complete bullshit and easily shows Carson’s horrendous economic ignorance, especially of the Mises/Hayek argument against the impossibility of socialist calculation(summarized here). Under Capitalism, you have 8 billion human beings/minds/CPUs looking to trade their wealth(private property) with what they calculate is best which motivates the 8 billion brains to discover the necessary information to produce what is best which they can only do by innovation and/or copying the innovations of others, thus via ‘economic competition’. Had Carson properly read/understood Hayek’s ‘Competition as a Discovery Procedure’, and ‘The Use of Knowledge in Society’ he certainly would NOT have made such a statement.
Carson:
“And capitalism’s chronic tendencies towards surplus capital and idle capacity create an imperative for subsidized waste — through planned obsolescence, military spending, suburbanization and car culture, etc. — in order to avoid Depression.”
Anyone who believes that the Capitalism espoused by Mises/Hayek, a Capitalism unhampered by the horrendous distortions caused by Central Bank-money creation leading to boom-bust cycles, can see the absurdity of the above. Real Capitalism, where most wealth remains in the private/competitive sector, does NOT lead to ‘surplus capital and idle capacity’. And the belief that ‘military spending’ is then needed ‘in order to avoid Depression’ is just further evidence of Carson’s misunderstandings of Mises/Hayek/etc.
