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Title: Anarchism Applied to Economics Author: Laurance Labadie Date: 1933 Language: en Topics: market, value, usury, economics Source: Retrived on September 22nd 2019 from http://dwardmac.pitzer.edu/Anarchist_Archives/bright/labadie/LabadieEssays.pdf
Value is exchange equivalency of something measured in terms of another
thing. The fundamental quality upon which value depends is utility in
satisfying desire. In economics, utility doesn't mean the 'real' or
'actual' ability of a thing to accomplish or assist in accomplishing a
result, but means the human estimate of the ability of a thing to
satisfy desire. This estimate may be erroneous but it is in effect the
measure of the desire for it. In economics, therefore, desire and
utility may be considered convertible terms.
Now in procuring anything, there is a hardship to be overcome. Without
this hardship nothing would possess value for no one would exchange one
thing for another thing which could be had without effort. So two
factors are necessary in order for a thing to have value, desire and
effort to be overcome, - utility and labor. Value may be enhanced by
stimulating desire or by creating an artificial hindrance to production
thereby affecting the equalizing forces of the law of supply and demand
under competition.
Now presupposing effort to be necessary for the acquirement of two
things of exchange, will they not be exchanged of the basis of equal
effort? Not necessarily, for if A can produce one thing with effort of
10 and another thing for effort of 20, and the measure of effort for B
to produce the things is in inverse ration, it will be to the advantage
of both to produce and exchange in any ration between the limit of which
means a decreased effort for both parties. If A gains 10 times as much
as B it is still to B's advantage to exchange as long as he gains,
because of reduced effort, in acquiring what he ultimately wants. The
actual ratio of exchange would be determined by psychological and
material conditions.
But when producers increase in numbers there arises competition in
offering articles in exchange to benefit by the decrease of effort due
to the division of labor. And presupposing enough producers of each
commodity to satisfy the respective demands for them, competition will
tend to make them exchange on a basis of labor time or effort necessary
to overcome the obstacle of production.
For, should the demand for any article be more than the supply of this
article offered for exchange, the probability is that a rise in the
price or value will ensue. And presupposing a number of marginal
workers, that is, producers whose aptitude is producing different
articles is approximately equal, there will be an influx of capital and
labor into production of the article which as increased in exchange
value.
So it may be said that, granting free competition, that is, free and
equal access to the means of production, to the raw materials, and to an
unrestricted market, the price of all articles will always tend to be
measured by the effort necessary for their production. In other words,
labor as factor in measuring value will become predominant.
Should there be any restrictions, however, to these phases necessary to
free competition, the desire or utility factor will tend to become more
prominent as a factor in the exchange value of those things to which
artificial hindrances to production have been applied.
From the Anarchist standpoint, these artificial hindrances which are the
cause of three main forms of usury - interest, profit, and rent, are, in
the order of their importance, monopoly in the control of the
circulating medium - money and credit private property in land not based
on occupancy and use, patent rights and copyrights, and tariffs.
It is also the claim of anarchists that government and States are
involuntary and invasive institutions originated and maintained for the
purpose of protecting and enforcing antisocial rights. They claim that
the very first act of governments, the compulsory payment of taxes, is
not only a denial of the right of the individual to determine what he
shall buy and how much he shall choose to offer, but is nothing more
than adding insult to injury when the very money extorted from him
should be used to his disadvantage. They therefore attempt to instruct
people in the belief that government, whether it be the rule of the mass
by a few or of the minority by the majority, is both tyrannical and
unjust, that any form of ruler-ship is bound to redound to the detriment
of the ruled.
How the government protects the privileges by which usurious
exploitation is made possible is easily seen upon investigation. Money
interest is due to the privilege attributed to a certain kind of wealth,
gold to be used as a basis for the reissuance of money, thereby putting
the control of the monetizing of other kinds of credit indirectly into
the hands of those holding this kind of wealth. Interest, therefore, is
simply a royalty paid to the privileged class for the right to monetize
one's credit. And the rate of interest on money fixes the rate of
interest on all other capital the production of which is subject to
competition. The rate of interest is an index to the 'use value' of
money and bears no relation to the labor cost of furnishing money
because competition in the right to monetize wealth has been restricted
to the holders of a certain kind of wealth.
Interest is nothing more than a tax and like all taxes is prohibitory in
nature. In all productive enterprises as in all individuals there are
grades of efficiency. Because of this slight inequality of natural
abilities and on account of previous exploitation there have developed
individuals and combinations possessing different aggregations of
wealth. Now let us see how it is that the rate of interest on money
determines rate of interest (i.e. capital returns or that portion of
profit not due to increased efficiency) on all other capital the
production of which is subject to a competitive supply. By the latter is
meant buildings, machinery, and products such as groceries, clothing,
hardware, amusements, etc. The larger producer of these things is
fortunate enough to own the capital he employs while the smaller
producer finds it necessary to monetize some of his wealth, that is to
use his credit, in order to produce on a scale commensurable to reap
some of the benefits of a larger scale of production. Now he has, in
addition to the unhampered natural cost of production, an additional
cost which is payment for the allowance of monetizing his wealth. As the
price which both producers get for their goods is the same, it is
evident that the producer who is not indebted for any of his capital
raps a profit equal to rate of interest plus that which is due to
increased efficiency or to the decreasing cost due to large scale
production. A similar occurrence obtains that in all things subject to
competitive supply. Interest, by far the most potent force for the
acquisition of unearned income, continually squeezes out the little
fellow and causes vast amounts of wealth to accumulate into fewer hands.
Without it, all great enterprises could not be accomplished except by
the joint subscription and cooperation of a large group of persons. The
Anarchist position for the abolition of interest is the repudiation of
all laws prohibiting mutual banks and the abolition of all restrictions
to free trade.
Rent is the tribute paid by the non-owning users of land to the
non-using owner. It is quite evident that ownership in and by itself
cannot and does not produce anything. It is only the use of land and
things, only by labor, that anything can be produced. Therefore he
anarchist denies the right of ownership of land if that ownership is not
based on occupancy and use of land. No one should be allowed to hold
land out of use because it is a denial of the first requisite of
Anarchism, the equality of opportunity.
The other restrictions to free production and distribution are patents,
copyrights, and tariffs. Anarchists deny the right of property in ideas
or processes, and deny that any individual or combinations of
individuals shall be restricted in exchanging their products when and
where they please. They claim that all restrictions are in form of a tax
and that all taxes are ultimately paid by the consumer ans insofar as
the consumer is at the same time a producer, if the producer is not at
the same time an owner, exploitation naturally ensues,
This concise statement of the position of the anarchist should be
evident and even trite to any reflective person. While Anarchism is, in
one sense, not a constructed philosophy, that is, not a "system",
anarchists stand firm "constructively" in the position above stated.
What form voluntary associations which anarchists contemplate will take,
remains for the future to evince. Anarchism primarily, is not an
economic arrangement but a social philosophy based upon the conclusion
that man is happy and independent in proportion to the freedom he
experiences and can maintain.
In a world where inequality of ability is inevitable, anarchists do not
sanction any attempt to produce equality by artificial or authoritarian
means. The only equality they posit and will strive their utmost to
defend is the equality of opportunity. This necessitates the maximum
amount of freedom for each individual. This will not necessarily result
in equality of incomes or of wealth but will result in returns
proportionate to service rendered. Free competition will see to that. To
base society on the supposition "that the laborer of great capacity will
content himself, in favor of the weak with half his wages, furnish his
services gratuitously, and produce for that abstraction called society,"
int the words of Proudhon," is to base society on a sentiment, I do not
say beyond the reach of man, but one which erected systematically into
principle, is only a false virtue, a dangerous hypocrisy." A hypocrisy,
unfortunately, eagerly subscribed to by a weak, downtrodden, and
misguided proportion of the populace.