The State, Wall Street, banks






How precisely are you defining “capitalism?”

A system where the means of production are owned by a ruling elite rather than by the masses, wherein wealth created from the produce goes primarily to the owner and is then given out to employees as a wage.  The value of a product is determined by it’s exchange value rather than it’s labour value.  To be broad and concise.

No modern industrial economy of any kind has existed for any significant period in the complete absence of a state. Nation-states have been globally ubiquitous for the last century. If you’re only interested in things that have been precisely tried before, neither anarchism nor libertarianism of any kind is for you.

Thanks for filling me in.  I’m really glad you could tell me something I already knew, although your argument remains invalid regarding the “why” part.

We have, however, seen great increases in human well-being wherever a society has actually become less statist and more libertarian and an even sharper trend in the reverse.

O rly?

We have seen markets, law, private property, long-distance trade, money, profit, and businesses in the absence of states. We have seen international commercial law and international business function in the absence of a single state. We have seen stateless societies sustained for hundreds of years and more. We have seen all the elements individually provided by markets and civil society.

Doesn’t at all contradict anything I claimed, simply misunderstands the existence of the state.  Try reading harder.

You’re merely begging the question here.

The argument made by ancaps, “market anarchists,” “left-libertarians,” and other anti-state libertarians is precisely that firms in a market gain socially suboptimal oligarchic control via the state shielding such firms from competition. This is not just an assertion. It’s thoroughly argued, empirically and logically, and few economists wholly disagree.

Good, I’m glad that I was only talking about the effect state regulations have on a market monopoly and artificially inflated prices.  There was no relevance intended to the conduct or practises of businesses in there at all.  Nope.  None.

A firm on a market cannot maintain monopoly prices as such activity necessarily attracts profit-seeking competitors which will undercut the firm. The firm cannot continuously buy out competitors (as this will simply incentivize more competition) or underprice indefinitely and stay solvent. An attempted oligopoly must compete with all potential substitutes for their product. An attempted cartel must overcome drastic compliance disincentives. Historically, all attempts at market monopoly/oligopoly/cartel have been failed unless supported by the state; and this is the function of the regulatory bodies in particular.

Because in a system without the state holding a monopoly on violence, the only way that a firm can maintain hegemonic power is through buying out competitors and undercutting their prices?

The State is an independent, centralized socio-political organization in a complex, stratified society living in a specific territory, and consisting of two basic strata, the rulers and the ruled, whose relations are characterized by political dominance of the former and tax obligations of the latter, legitimized by an at least partly shared ideology.

Encyclopedia of Cultural Anthropology (1996)

Thanks!  I’ve never, ever read a definition of the state before.  Especially not one from the Encyclopedia of Cultural Anthropology!  I’ve never discussed the nature and function in depth before, I’ve never considered that there’s a distinction between a philosophical or dictionary description of the state compared to the way in which the state is realised in actuality.  In fact if you hadn’t provided me with this single definition of the state, I wouldn’t have even known I was talking about the state!

A private market firm cannot be the state or do what the state does (acquire funds by mass coercion i.e. taxation, top-down legislation, etc.) because it does not have mass ideological legitimation which is empirically necessary for the formation and power of the state.

No, it just has access to the physical power that wealth can buy.  Which is the alternate way for the state to maintain power in instances where it does not hold popular, democratic support.  And it’s not like they couldn’t buy, publish or create a media source to reinforce some form of ideological hegemony to reinforce their existence.

No market firm in human history has ever become a state.

No.  But that wasn’t my argument.  Deconstruct what the state is, what the state does and the functions it serves.  Then deconstruct the role and position corporations would hold in a post-state society.  We’re not talking on some linear level about “oh the state collects taxes and creates legislation” but about the dialectical relationship between the individual/society and the state.

States almost universally form from zealous personality cults and ancient fundamentalist religion, which makes sense given the heavily ideological nature of such organizations. It is not conceptually impossible for a market firm (or absolutely any other organization) to become a state if it gains mass ideological legitimacy as geographic monopolist of mass coercion first, but it is historically unprecedented and logically improbable. Same goes for communes, for example, though they are more likely to morph into cults capable of becoming states.

Yes, but you’re talking as if we should expect corporations to have done this in a statist society, while the state holds a monopoly of violence.  We’re talking about the potential for a post-state society and the role of the corporation within that, and that’s a completely different ballgame.

No, without the state subsidies and favorable regulation, the financial sector would significantly shrink relative to the rest of the economy and all firms would be subject to market competition. Competition aligns incentives and information with ensuring socially efficient production.

Whereas corporate lies, greed and coverups work to the opposite effect.

Civil society does the rest, but nobody is hinging their theory on some unrealistic uber-benevolence of human nature (other than, implicitly, statists and, explicitly, left-anarchists).

Without central banks enabling them via unique privilege of cheap nationalized currency credit and deposit guarantees, the banking system as we know it would cease to exist. Large firms currently unambiguously dependent on extensive government support would shrink, decentralize, or else become insolvent.

Banks, finance, investment, money, etc. are not bad per se any more than law, schools, or police are bad per se. It is their distortion by the state – the inhibition of competition, the arrogation of civil societal institutions, the information destroyed and incentives realigned to the state – that results in their qualities usually considered suboptimal.

Which is all dependent on a completely open system and involves a denial of human agency with an attitude towards the invisible hand of the market.  It doesn’t factor in the incredible capacity for media manipulation and physical coercion.  It assumes that new businesses will be able to form to be able to compete on the market against the pre-existing hegemonies.  It ignores the relationship between the state and the individual which is what creates the functioning understanding of what the state is, relying instead solely on this attitude towards a dictionary definition of the state.

It’s not a catch-phrase… you’ve never heard of “socializing risk and privatizing gains“…? The ubiquitous theme of the financial crisis? For someone who keeps trying to insult this discussant’s linguistic depth, you don’t seem very familiar with rather common terms.

Well except for the fact that it bastardises the meaning of socialism.  Corporate welfare, as a term, is much less self-contradictory.

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