Who Owns the Benefit? The Free Market as Full Communism
Who Owns the Benefit? The Free Market as Full Communism
By Kevin Carson / c4ss.org

There’s a wonderful phrase for how capitalism works in the real world (I’m not sure who first came up with it, but I associate it with Noam Chomsky): “The socialization of risk and cost, and the privatization of profit.”

That’s a pretty good description of what the state does under actually existing capitalism, as opposed to the free market. Just about everything we identify as problematic about corporate capitalism — the exploitation of labor, pollution, waste and planned obsolescence, environmental devastation, the stripping of resources — results from the socialization of cost and risk and the privatization of profit.

Why haven’t the cybernetic revolution and the vast increases in productivity from technological progress resulted in fifteen-hour work weeks, or many necessities of life becoming too cheap to meter? The answer is that economic progress is enclosed as a source of rent and profit.

The natural effect of unfettered market competition is socialism. For a short time the innovator receives a large profit, as a reward for being first to the market. Then, as competitors adopt the innovation, competition drives these profits down to zero and the price gravitates toward the new, lower cost of production made possible by this innovation (that price including, of course, the cost of the producer’s maintenance and the amortization of her capital outlays). So in a free market, the cost savings in labor required to produce any given commodity would quickly be socialized in the form of reduced labor cost to purchase it.

Only when the state enforces artificial scarcities, artificial property rights, and barriers to competition, is it possible for a capitalist to appropriate some part of the cost savings as a permanent rent. The capitalist, under these conditions, is enabled to engage in monopoly pricing. That is, rather than being forced by competition to price her goods at the actual cost of production (including her own livelihood), she can target the price to the consumer’s ability to pay.

That form of enclosure, via “intellectual property,” is why Nike can pay a sweatshop owner a few bucks for a pair of sneakers and then mark them up to $200. Most of what you pay for isn’t the actual cost of labor and materials, but the trademark.

The same is true of artificial scarcity of land and capital. As David Ricardo and Henry George observed, there is some rental accruing on the natural scarcity of land as a non-reproducible good. There’s considerable disagreement among Georgists, mutualist occupancy-and-use advocates, and other libertarians as to whether and how to remedy those natural scarcity rents. But artificial scarcity, based on the private enclosure and holding out of use of vacant and unimproved land, or on quasi-feudal landlord rights to extract rent from the rightful owners actually cultivating arable land, is an enormous source of illegitimate rent — arguably the major share of total land rent. And regardless of any other steps we may be advocate, principled libertarians are all in favor of abolishing this artificial scarcity and — at the very least — letting market competition from vacant land drive down land rent to its natural scarcity value.

We favor, as well, opening up the supply of credit to unfettered market competition, abolishing entry barriers for the creation of cooperative lending institutions, and abolishing legal tender laws of all kinds, so that market competition will eliminate a major portion of total interest on money.

But while demanding the socialization of rent and profit may be frowned upon by capitalists as “class warfare,” they’re totally OK with the socialization of their operating costs. The main reason modern production is so centralized and both firms and market areas are so large, is that the state has subsidized transportation infrastructure at the expense of the general public, and made it artificially cheap to ship goods long distance. This makes large-scale, inefficient producers artificially competitive against small-scale producers in the local markets they invade with the state’s help. That’s why we have giant retail chains driving local retailers out of business, using their own internalized “warehouses on wheels” wholesale operations to distribute goods manufactured by sweatshops in China.

The past forty years’ loss of biodiversity, deforestation, and CO2 pollution has occurred because the ecosystem as a whole is an unowned dump, rather than being a regulated commons. The state typically preempts “ownership” of forests, mineral deposits, etc. — often to the prejudice of indigenous peoples already inhabiting the areas — and then gives privileged access to extractive industries that are able to strip mine them of resources without internalizing the actual costs incurred.

As surprising as it might seem, there’s a strong parallel between this free market vision of abundance and the Marxist vision of full communism. Carl Menger wrote of economic goods (i.e., goods subject to economic calculation because of their scarcity) becoming non-economic goods (i.e., that their abundance and near-zero production cost would make the cost of accounting greater than the production cost, if any). This parallels a major strain of thinking among socialists in the free culture/open source/P2P movement. They see the communist mode of production practiced by Linux and other open-source developers as the kernel of a new post-capitalist, post-scarcity social formation. Much as capitalist production started out in tiny islands inside the larger feudal economy and later became the core of a new, dominant social formation, commons-based peer production is the core around which the post-capitalist economy will eventually crystallize.

And we free marketers are also information communists. We want the benefits of knowledge and technique to be fully socialized. The largest single share of profit under the current model of corporate capitalism is embedded rents on the artificial scarcity of knowledge and technique.

In a society where waste and planned obsolescence were no longer subsidized, and there were no barriers to competition socializing the full benefits of technological progress, we could probably enjoy our present quality of life with a fifteen-hour work week. And in a society where the dominant mode of production was craft production with cheap, general-purpose CNC machine tools (as Kropotkin anticipated over a century ago in Fields, Factories and Workshops), the division of labor and the dichotomy between mental and physical labor would be far less pronounced.

Taken together, these two outcomes of free market competition in socializing progress would result in a society resembling not the anarcho-capitalist vision of a world owned by the Koch brothers and Halliburton, so much as Marx’s vision of a communist society of abundance in which one may “do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.”

You can help support C4SS by purchasing a zine copy of Kevin Carson’s “The Free Market as Full Communism“.

Translations for this article:

3.4 ·
What's Next
Trending Today
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 13,761 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
Noam Chomsky Has 'Never Seen Anything Like This'
Chris Hedges · 11,942 views today · Noam Chomsky is America’s greatest intellectual. His massive body of work, which includes nearly 100 books, has for decades deflated and exposed the lies of the power elite...
No Moral Superpower: Arundhati Roy, Edward Snowden, and the Crimes of Empire
Jake Johnson · 8,191 views today · When Arundhati Roy was preparing, in 2014, for a trip to Moscow to meet Edward Snowden, she was troubled by two things. One of them was the fact that the meeting was arranged...
Dinosaur explains Trump policies better than Trump!
8 min · 5,722 views today · Donald Trump is actually the corporate triceratops, Mr. Richfield, from the 90's TV show sitcom, "Dinosaurs". 
25 Mind-Twisting Optical Illusion Paintings by Rob Gonsalves
Dovas · 4,877 views today · The beautiful and mind-bending illusions in Canadian artist Robert Gonsalves’ paintings have a fun way of twisting your perception and causing you to question what in his...
Forget Shorter Showers: Why Personal Change Does Not Equal Political Change (2015)
11 min · 4,036 views today · Would any sane person think dumpster diving would have stopped Hitler, or that composting would have ended slavery or brought about the eight-hour workday; or that chopping...
Men Loving Men
Bianca Vivion · 3,484 views today · When my father was seven he and his best friend Phil cut their index fingers open and placed them together to create a “blood pact” that they would always be brothers. To this...
What Makes Call-Out Culture So Toxic
Asam Ahmad · 3,094 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
And After the Election, The Reaction
Ret Marut · 2,387 views today · Could there be any better illustration of the shortcomings of representative democracy than this year’s Presidential campaign? For months upon tiresome months, the whole world...
Writers Tom Hayden and Naomi Klein Talk About Journalism and Activism
27 min · 2,216 views today · Author, Activist and Former California State Senator Tom Hayden talks in depth with the author of No Logo and The Shock Doctrine, Naomi Klein, about the state of the fourth...
'The Climate of Fear Is Unacceptable' - Ken Loach on I, Daniel Blake
6 min · 1,901 views today · Ken Loach’s Palme d’Or-winning film I, Daniel Blake tells the story of a man who is denied disability benefit after a heart attack and who is then subsequently caught in a...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 1,813 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
These Incredible Stories Remind Us of Our Better Selves
36 min · 1,410 views today · #WhoWeAre is a campaign to share the stories of people whose actions show us compassion and to send a message of empathy, hope and optimism. These videos will automatically...
Three Massive Mergers - Millions for One Bank and a Disaster for Food, Water, and Climate
Wenonah Hauter · 1,194 views today · In addition to advising on all three mega-mergers, Credit Suisse is playing a big role behind the scenes of the Dakota Access pipeline.
The Burden of the New Story
Adebayo Akomolafe · 1,135 views today · The 'new story' - that longed for milieu when all is right with the world and things are set straight - seems to be taking its sweet time coming. Why?
The Empire Vs. The People - Police Attack and Arrest Peaceful Protestors at the Dakota Access Pipeline
6 min · 1,072 views today · On October 22, just before dawn, hundreds of people, including many families, gathered and prepared to march toward the Dakota Access pipeline construction site near Standing...
The Top 100 Documentaries We Can Use to Change the World
Films For Action · 678 views today · A more beautiful, just and sustainable world is possible. Take this library and use it to inspire global change!
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 665 views today · This is easily the best comic strip ever made.  Pabl
Social Geographer Shows How Much of You is Determined by Where You're From
3 min · 606 views today · The Professor of Geography examines social inequality and the geodemographics of the UK, using maps created by Oliver O'Brien (UCL, CASA) in 2012 and updated in 2015. You can...
Grow Heathrow: Residents Resisting Eviction Over 3rd Runway
4 min · 587 views today · On March 1st 2010 Transition Heathrow members swooped on an abandoned market garden site in Sipson; one of the villages to be completely tarmacked to make way for a third...
Load More
Like us on Facebook?
Who Owns the Benefit? The Free Market as Full Communism