Friday, February 15, 2008

Review: Kevin Carson, Studies in Mutualist Political Economy

Kevin Carson’s Studies in Mutualist Economy is an ambitious work. His agenda is twofold, to resurrect the individualist anarchist tradition, but in a leftward (socialistic) form, and to move forward the individual anarchist critique of capitalism into the 21st century. The intellectual legacy with which Carson is most concerned is Benjamin Tucker’s. Tucker was a late 19th century anarchist who offered a labor theory of value based critique of capitalism and argued that the “four monopolies” of finance, land, tariff, and patents, undermined a truly free society based upon free markets.

Carson’s first, and daunting, task is to argue for the validity of the labor theory of value. The labor theory of value states that the value of any object is determined by the labor that is embodied within it. This has been articulated in different ways by classical economists such as Adam Smith, J. S. Mill, and David Ricardo. It is also one of the theoretical bases of Marxism, which makes it controversial and so important to disprove (at least for modern day defenders of capitalism). The theory has therefore sustained a withering assault from neo-classical economists from the later 19th century forward, to the point where few economists (outside Marxist circles) accept it as valid.

I am not an economist by any stretch; therefore, my ability to evaluate the subtleties of the various critiques and defenses of the LTV is limited. The LTV is difficult to scientifically prove, as it presumes a theoretical formula that neatly translates labor power (whether it is calculated by time, skill, or other attributes) into a quantifiable value. In Capital, Marx’s “proof” was framed negatively. Since value can’t be attributed to any other aspect of a commodity and the only thing that commodities share is labor, “abstract labor,” embodied in a particular object, is what is being exchanged. The obvious problem is that price for any object can fluctuate dramatically over time and place, which raises questions whether it is truly the labor, the utility, or subjective appeal of the object that determines value. Carson’s solution is to marry aspects of marginal utility theory to the LTV. What is it that determines the social utility of an object? Ultimately, it is rational individuals who seek to maximize utility, minimize disutility, and thus seek a “just price” for goods and therefore the true vale of labor.

Although I am sure this sends chills down most economists’ spines, I have typically viewed the LTV in moral terms. It is a theory that does not scientifically have to be true, but from the point of the worker, it needs to be true. The same could be said of marginilist theory from the point of view of the bourgeois economists. Carson argues as such, emphasizing capitalist economists’ political need to come up with a theory of price and value which is divorced from labor. Simplistic assertions that the LTV can’t be true that focus exclusively on sale price have never been terribly convincing, largely because such facile arguments are missing the grander point. The LTV is not about how things work, it is about why things work. It is similar to the difference between the law of gravity, which explains how fast a rock falls, and the Theory of Gravity, which explains why the rock falls (now I have demonstrated my ignorance in two fields of science!). Carson’s analysis suggests that the Enlightenment, with all its cultural issues, was preemptively anti-capitalist; and ultimately, the LTV is not simply a critique of capitalism, but the rational basis of a new society.

The second key point of Carson’s argument hinges on his assertion that capitalism has always rested upon coercion (unequal exchange in economic terms) and that the existence of waged labor presumes state driven and/or violent expropriation. Therefore, Marx’s project of explaining the source of profit becomes unnecessary—the answer is in the historical origins of the waged working class. Carson also discredits the widely held belief (held by many on the right and the left) that capitalism arrived riding the “free market,” flourished due to the efficiency and scrupulousness of the bourgeoisie, and that, only recently, has state intervention mucked up the works.

On these points, I am in full agreement with Carson, although I arrived at them from a different perspective. One of my largest intellectual influences is the British Marxist historians, and I was pleased that Carson made good use of Christopher Hill, Eric Hobsbawm, and E. P. Thompson’s analyses of nascent capitalism. I would only add to the list their intellectual heirs Marcus Rediker and Peter Linebaugh. The latter have sufficiently demonstrated that the early history of capitalism is littered with the bodies of commoners, slaves, and workers—as well as their ideas positing alternatives to the emergent capitalist order— “common-ism,” if you will.

Anyone with a rudimentary knowledge of American history knows that the 19th Century, the heyday of “laissez-faire” capitalism, was characterized by slavery, genocide, segregation, lynching, and private and public violence against labor organizing. Without slave cotton, access to western mining and timber, and a terrorized working class—could capitalism even exist? Can one have Andrew Carnegie and John Rockefeller without government land grants, laws protecting corporate property, and tariff protectionism? Carson’s answer is “no” and he’s right.

The biggest weakness of Carson’s argument is his lack of a class analysis with regards to popular reform and state transformation. That may seem odd, given that Carson’s explicitly points out the importance of class and chastises “vulgar” libertarians for their mechanistic understanding of the state, but he doesn’t sufficiently follow his own advice. Although it is true that the emergence of state managed capitalism in the 20th century is characterized by the emergence of a planning class, a power elite, it is problematic to see this process as a purely a top down initiative, orchestrated by capitalists and bureaucrats.

My intellectual baggage comes with a Marxist departure point, so I am arriving at these debates from a perspective more sympathetic to conventional political action—which is the crux of our difference. The most obvious example is his exploration of the New Deal. Carson correctly criticizes the simplistic analysis of the New Deal, where liberals and conservatives squared off, with the liberals winning. Liberals and conservatives mirror image mythology of the New Deal posits “good guys vs. bad guys.” Carson supplants this dualistic mythology with another one pushed, in a mirror image way, by many paleo-Marxists and Libertarians --the New Deal was the product entirely of “bad guys”—“New Class” apparatchiks, elevating themselves through their ability to save capitalism.

So who is missing from this tale? The working class. Carson’s limited analysis focuses on the service that the “New (managerial) class” provided for capitalism, and effectively silences the self-activity of workers. There are a number of monographs on the social origins of the New Deal that offer a “bottom up” analysis of the period. Additionally, rational choice Marxists and state transformation theorists have made important theoretical contributions to understanding the political and social origins of the New Deal and Great Society social programs.

The historical reality is that the New Deal was much more complicated than the liberal vs. conservative or New Class narratives would have one believe. Nor is it as mechanical as schematic versions of Marxism or the vulgar libertarians argue. In many respects, it demonstrates that notion that hegemony is never fully achieved, it is always in the process of negotiation—Gramsci’s “war of position”—and on occasion, the “barbarians” can penetrate the gates. Carson's top down analysis misses the crucial agency of working people.

The result was that the New Deal, which was initially very pro-business and recovery oriented, was pulled leftward and granted major concessions to long held working class demands. Working class organizations rushed to seize opportunities when they came: organizing millions; fundamentally altering the balance of political power in many cities; and establishing a new social contract significantly more favorable to working people. The lesson is that rulers still rule, not always in the way they would like.

These were significant and hard fought gains which should not be cavalierly dismissed. Moreover, if Carson’s narrative is true, the New Deal becomes one of the greatest examples of false consciousness in world history, capitalists opposing programs designed to help them, workers rushing to the ballot box and union halls in support of policies and organizations designed to hurt them.

I agree that New Deal was certainly flawed and limited in many respects. It was hardly universal in its application (women and African Americans were left out of many reforms, deliberately so) and it was structured in a way to limit the impact of many of the reforms (if the reforms were so great for the elite, why limit them?). This is less a product of omniscient New Class technocrats than a reflection of the balance of power between workers, capitalists, and managers. It is also true that organized labor became increasingly complacent, over estimating their own power and elites’ acceptance of the new social contract. But even with this, the New Deal was an imposition on the power elite, which is why they spent so much time trying to contain it, subvert it, chip away at it, and co-opt it. It isn’t a coincidence that social democratic urban administrations were punished with capital strikes in the 1970s and 1980s while “right to work” states were rewarded with investment. It isn’t a coincidence that employers went after the best paid unions sectors first (construction) and lopped off entire unionized industries when possible. If such reforms were so effective in controlling workers, the reaction would have been the opposite—make unions stronger. The reality is an arrogant and well organized working class is a problem and old fashioned class struggle still exists, even in the highly planned sections of the economy.

Capitalist elites accepted and tried to shape many New Deal and subsequent reforms, but this was because they had little choice. If you can’t buy steel from bombed out factories, you can’t buy clothes from Chinese communists, and domestic strike activity is high--you “overpay” American workers until you come up with an alternative. Ultimately, the answer was to circumvent and undercut the reforms through racism, US imperialism, and globalization. Even with its warts, the New Deal Order did carve a space for political activity in the post-war period which would lead directly to the civil rights movement and the New Left—which is really the problem.

So, in the final analysis, what does Carson advocate? Carson builds off the legacy of Proudhon, Tucker, and other anarchist currents. The basis of a new society will be stateless and comprised of voluntary, free associations of individuals, which interact with each other in a truly free market system—a system where individuals and organizations are free to negotiate and trade, and equally free to walk away from said agreements. In such a society, production costs are will be internalized, preventing usury, unequal exchange, exploitation and preserving the labor theory of value.

In terms of getting there, in contrast to many libertarians and anarchists, Carson does not totally eschew political activity, nor does he see the state as a homogeneous entity. He argues that in dismantling the state, it is important to do it in the right order. To make an analogy, if you are defusing a bomb, clipping just any wire isn’t the best strategy—you have to be careful.

Although we have some disagreements regarding the nature and utility of solidarity based reforms, I can’t disagree with his overall point—if we eliminate the coercive and capitalist subsidizing components of the state first—by the time we get to Social Security, it won’t be necessary. In the mean time, those interested in creating a better world need to start creating those organizations and arrangements that will make such a world possible.

Although I disagree with some of his analysis, overall, I liked his propositions. He seems to agree with Marx’s belief that the groundwork for a new society must develop within the old. Conventional Marxism has put this in largely economic terms—emphasizing “productive capacity.” One can also interpret this in more of an organizational sense. Utopians going back to the 19th century have attempted to create alternative, voluntary forms of association for production and consumption. Such efforts have often been dismissed as “petit bourgeois” or as simply unrealistic. I have increasingly come to believe that unless we begin to reflect upon and experiment with new forms of social organization, the future will never come. Kevin Carson’s Studies in Mutualist Political Economy is an important step in this direction.


Kevin Carson said...

Thanks very much for the thoughtful review.

On the labor theory of value, I don't think it's something that can really be proven. Rather, it and marginalism are alternative paradigms for explaining the same facts, to be picked up and set down depending on how useful they are for a particular purpose (like particle and wave theory). Marginal utility is much more logically elegant than classical political economy, but if you look beneath the marginalists' superficial rhetoric, they made much less of a revolutionary breach with the classicals than they let on; they're essentially making the same descriptive generalizations Ricardo did, with a more sophisticated theoretical mechanism. The worst aspect of marginalism, when it's set up in opposition to the classicals or used as a political weapon against them, is the extent to which they obscure the central observations of classical political economy (the ways privilege in factor ownership affected distribution).

There is a class analysis of the state, of sorts, in MPE. It's the Oppenheimer distinction between the political and economic means, and his understanding of economic exploitation and class as rooted in political appropriation of the land and other forms of privilege. It owes more to Saint-Simon than to Marx, but much of it is compatible with Marx--at least until the Marxists draw a line in the sand, as Engels did against Duhring's force theory.

I think there's a lot to your critique of the political analysis of the New Deal and other reformist movements. I didn't provide an adequate treatment of the state as a contested realm (as described by "state autonomist" Marxists), so my crude instrumentalist picture of the state as ExCom of the ruling class lacks some nuance.

My general opinion then, as now, was that the New Deal was in part a response to pressure from below by the working class. Nevertheless, the actual form the state's response took was determined by the ruling class itself, at the helm of the state--a ruling class dominated by capitalists. To the extent that representatives of the working class as a class took part in the governing coalition alongside capitalists, they ceased to be representatives of the working class. I say this from the perspective of elite theories like that of Michels: the mass, as such, can never control the state; minorities that claim to represent it, like the bureaucratic leadership of the Wagner-coopted business unions, become a privileged stratum with their own interests separate from those they claim to represent (Bakunin's "red bureaucracy"). I should have treated all these issues in more explicit form.

goffchile said...

Thanks for your response. On the issue of labor unions and the Wagner Act. I recently gave a talk before a labor union regarding these issues. It is interesting how the National Labor Relations Act has in recent years been so easily used against labor.

I don't necessarily categorize all unions as "business unions" although those tendencies exist (in fact the most "business like unions" are building trades unions which were able to function pre-Wagner Act).

I think the Employee Free Choice Act is a step in the right direction (statist, yes, but I think it will facilitate more grass roots and workplace organizing.)

Take care.

Anonymous said...

"Ultimately, it is rational individuals who seek to maximize utility, minimize disutility, and thus seek a “just price” for goods and therefore the true vale of labor."

This is the major point that I think destroys all of Kevin's great effort. Frankly, this is just about the dumbest thing you can believe about economics. The "rational" utility-maximizing individual is the major flaw of neoclassical economics. Steve Keen does a good job of showing just how silly this concept. People are not running around with utility graphs in their heads. If Kevin truly thinks his thesis rests on this, then his thesis is to be rejected.

Paulus Petrocapus said...

Mutualist arguments are very neatly deployed. However, as far as I know, Carson was very much influenced by the Ricardian Socialists. The most famous among them was Hodgskin. They were essentially the missing link between ricardo and marx. Check them out. I think Carson's theory shares the same pros and cons with them.

Paulus Petrocapus said...
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