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Title: Libertarian Property and Privatization Author: Kevin Carson Date: August 2004 Language: en Topics: libertarianism, property, privatisation Source: Retrieved on 3rd September 2021 from http://www.mutualist.org/id45.html
Carlton Hobbs recently challenged the tendency of mainstream
libertarians, free marketers and anarcho-capitalists to favor the
capitalist corporation as the primary model of ownership and economic
activity, and to assume that any future free market society will be
organized on the pattern of corporate capitalism. As one alternative to
such forms of organization, Hobbs proposed “stateless common property,”
with usufructory right possessed by the inhabitants of a given area,
coming about “without any prior formal agreements incorporating a
potentially imprecise owning group.” He gave, as historical examples of
such kinds of ownership, public rights of way, or villagers’ rights of
commons in a field, well or wood. [1] The questions he raised are
applicable on a much broader scale.
Libertarians and anarcho-capitalists, in calling for the abolition of
state property and services, typically call for a process of
“privatization” that relies heavily on the corporate capitalist model of
ownership. The property of the State should be auctioned off and its
services performed by, say, GiantGlobalCorp LLC. And the picture of the
future market economy, so far as business enterprise is concerned, is
simply the present corporate economy minus the regulatory and welfare
state--an idealized version of Nineteenth Century “robber baron
capitalism.” The former tendency ignores other alternatives, equally
valid from a free market anarchist perspective, such as placing
government services like schools and police under the cooperative
control of their former clientele at the town or neighborhood level. And
the latter tendency ignores the issue of state capitalism, of the extent
to which the giant corporations that have received the lion’s share of
their profits from the State can be regarded either as legitimate
private property or the result of theft.
In challenging this aesthetic affinity for the corporation as the
dominant form of economic organization, Karl Hess denounced those who
simply identified libertarianism “with those who want to create a
society in which super capitalists are free to amass vast holdings...”
Writing in The Libertarian Forum in 1969, Hess argued instead that
Libertarianism is a people’s movement and a liberation movement. It
seeks the sort of open, non-coercive society in which the people, the
living, free, distinct people, may voluntarily associate, dis-associate,
and, as they see fit, participate in the decisions affecting their
lives. This means a truly free market in everything from ideas to
idiosyncracies. It means people free collectively to organize the
resources of their immediate community or individualistically to
organize them; it means the freedom to have a community-based and
supported judiciary where wanted, none where not, or private arbitration
services where that is seen as most desirable. The same with police. The
same with schools, hospitals, factories, farms, laboratories, parks, and
pensions. Liberty means the right to shape your own institutions. It
opposes the right of those institutions to shape you simply because of
accreted power or gerontological status. [2]
Hess decried the cultural tendency of too many libertarians to defend
existing rights of private property, regardless of how it was acquired,
and to assume that those presently on top in the state capitalist
economy were simply collecting the rewards of “past virtue.”
Because so many of its [the libertarian movement’s] people... have come
from the right there remains about it at least an aura or, perhaps,
miasma of defensiveness, as though its interests really center in, for
instance, defending private property. The truth, of course, is that
libertarianism wants to advance principles of property but that it in no
way wishes to defend, willy nilly, all property which now is called
private.
Much of that property is stolen. Much is of dubious title. All of it is
deeply intertwined with an immoral, coercive state system which has
condoned, built on, and profited from slavery; has expanded through and
exploited a brutal and aggressive imperial and colonial foreign policy,
and continues to hold the people in a roughly serf-master relationship
to political-economic power concentrations.
Given this situation, Hess called for creative libertarian analysis,
confronting issues of “the revolutionary treatment of stolen “private”
and “public” property in libertarian, radical, and revolutionary terms”
(including, for example): “Land ownership and/or usage in a situation of
declining state power”; “Worker, share-owner, community roles or rights
in productive facilities.... What, for example, should happen to General
Motors in a liberated society?”; and the injustice of freeing slaves and
serf without addressing their property rights in the land of their
former owners (i.e. “forty acres and a mule”).
In the spirit of Hess’s comments, I will examine alternative libertarian
models for “privatizing” government property and services, and attempt
to apply the same principles by analogy to the issue of how to deal with
current “private” beneficiaries of state capitalism in a future free
market society. In so doing, I should first make clear that I am not an
anarcho-capitalist, as are most of the regular visitors to ASC, but an
individualist anarchist influenced mainly by Tucker.
The anarchist caucus of the Young Americans for Freedom, in their 1969
manifesto The “Tranquil” Statement (its authors included Karl Hess),
expressed sympathy with radical students who had occupied their college
campuses. In response to right-wing denunciations of such crimes against
“private property,” the Statement remarked that
the issue of private property does not belong in a discussion of
American universities. Even those universities that pass as private
institutions are, in fact, either heavily subsidized by federal grants,
or, as in many cases, supported by federal research funds. Columbia
University is an excellent example. Nearly two thirds of Columbia’s
income comes from governmental rather than private sources. How, then,
can anyone reasonably or morally consider Columbia University to be
private [?].... And in so far as it is public (government owned)
property (that is, stolen property), the radical libertarian is
justifiedin seizing that property and returning it to private or
communal control. This, of course, applies to every institution of
learning that is either subsidized by the government or in any way
aiding the government in its usurpation of man’s basic rights. [3]
Private corporations “in any way” receiving government subsidies, of
course, might be excused for seeing ominous potential in this principle.
Murray Rothbard, taking the same position in an editorial in The
Libertarian, ridiculed the “grotesque” Randian argument that Columbia
was “private property,” and that the students therefore were in
violation of these “sacred rights”:
Apart from the various specific tie-ins with the State which the
Columbia rebels were pinpointing..., nearly two-thirds of Columbia’s
income comes from governmental rather than private sources. How in the
world can we continue to call it a private institution?...
To defend the “private-property” rights of “frankly state-owned”
universities was, self evidently, absurd. In such cases,
government property is always and everywhere fair game for the
libertarian; for the libertarian must rejoice every time any piece of
governmental, and therefore stolen, property is returned by any means
necessary to the private sector.... Therefore, the libertarian must
cheer any attempt to return stolen, governmental property to the private
sector: whether it be in the cry, “The streets belong to the people”, or
“the parks belong to the people”, or the schools belong to those who use
them, i.e. the students and faculty. The libertarian believes that
things not properly owned revert to the first person who uses and
possesses them, e.g. the homesteader who first clears and uses virgin
land; similarly, the libertarian must support any attempt by campus
“homesteaders” the students and faculty, to seize power in the
universities from the governmental or quasi-governmental bureaucracy.
[4]
Rothbard argued that “the most practical method de-statizing is simply
to grant the moral right of ownership on the person or group who seizes
the property from the State.” This would entail, in most cases, treating
the State’s property as vacant or unowned, and recognizing the homestead
rights of those actually using it. In the case of “public” universities,
the proper owners of this university are the “homesteaders”, those who
have already been using and therefore “mixing their labor” with the
facilities.... This means student and/or faculty ownership of the
universities. [5]
This principle of homesteading State property by workers or clients is
amenable to wide application. Larry Gambone has proposed “mutualizing”
public services as an alternative to corporate privatization. This means
decentralizing control of, say, schools, police, hospitals, etc., to the
smallest feasible local unit (the neighborhood or community) and then
placing them under the democratic control of their clientele. For
example, the people of a town might abolish the city-wide school board,
and place each school under a board of selectmen responsible to the
pupils’ parents. Ultimately, compulsory taxation would be ended and the
schools run on user fees. In practical terms, mutualizing is more or
less equivalent to reorganizing all the State’s activities as consumer
cooperatives. [6]
Murray Rothbard and Hans Herman Hoppe have attempted to apply the same
homestead principle to state property in post-communist societies.
Although Rothbard’s assessment of the libertarian potential of
Yugoslavia’s combination of worker self-management and market socialism
was over-optimistic and naive, his statement of principle for
post-Communist societies was quite sound: “land to the peasants and the
factories to the workers, thereby getting the property out of the hands
of the State and into private, homesteading hands.” [7]
The fall of the Soviet empire and its satrapies in 1989–91 transformed
this from a theoretical to a very practical issue. The course generally
followed in the ensuing period involved issuing equal, marketable shares
in State enterprises to all citizens, and then allowing subsequent
ownership to develop through the buying and selling of such shares.
Rothbard proposed, instead, a “syndicalist” solution:
It would be far better to enshrine the venerable homesteading principle
at the base of the new desocialized property system. Or, to revive the
old Marxist slogan: “all land to the peasants, all factories to the
workers!” This would establish the basic Lockean principle that
ownership of owned property is to be acquired by “mixing one’s labor
with the soil” or with other unowned resources. Desocialization is a
process of depriving the government of its existing “ownership” or
control, and devolving it upon private individuals. In a sense,
abolishing government ownership of assets puts them immediately and
implicitly into an unowned status, out of which previous homesteading
can quickly convert them into private ownership. [8]
Hoppe made a similar proposal specifically regarding East Germany,
albeit more hesitantly and with more qualifications. [8]
Of course, the term “syndicalist” was used mainly for color, since
Rothbard and Hoppe were both adamant that such “syndicalist” property be
devolved to individual workers and peasants as marketable shares, and
not to the members of production units collectively. The ideal, as Hoppe
expressed it, would be for share-ownership and labor to become separated
as quickly as possible. But there is no reason in principle, as Carlton
Hobbs showed in regard to the commons, that such production units should
not remain the joint and indivisible property of their labor force, with
a usufructory right in the wages and pensions derived from it. Such a
system would by no means necessarily prevent a market in factors of
production. Workers’ collectives would buy new capital equipment on the
market; but their property claims to any industrial production unit
would be collective so long as the enterprise maintained organizational
and spatial continuity.
Although Rothbard made no such qualification in his 1969 statement
(written, after all, at the height of his attempt at a coalition with
the New Left), he and Hoppe agreed two decades later that an attempt
should be made to restore state property to its original legitimate
owner before confiscation, if records of ownership still existed. Hoppe
attached similar caveats to “syndicalist” privatization of
post-communist state industry in Democracy: The God that Failed. [9]
Rothbard and Hoppe agreed that such restoration would be easier in the
case of land, and would be easier in the case of Eastern Europe (where
the expropriation had taken place only forty years earlier) than in the
Soviet Union. Rothbard stressed, however, that such a restoration would
be virtually impossible in the case of manufacturing and capital goods,
since most of the industrial economy had been developed under state
ownership. So industry was best placed under the control of workers.
State Property
Privatization of state property, as it is actually carried out is just
another form of state capitalist subsidy. In the first state,
transnational capital promotes infrastructure projects in Third World
countries that are essential to returns on Western capital in those
countries, as a way of subsidizing foreign investment there at the
expense of native taxpayers. Next, the resulting debt load is used to
discipline the country’s government into carrying out policies favorable
to Western capital. And finally, under the “structural adjustment”
regime imposed by the IMF and World Bank, the country is forced to sell
assets (previously paid for in the sweat of the native producing
classes) to Western capital at pennies on the dollar. Sean Corrigan ably
described the phenomenon in an article for LewRockwell.com:
Does he not know that the whole IMF-US Treasury carpet-bagging strategy
of full-spectrum dominance is based on promoting unproductive
government-led indebtedness abroad, at increasingly usurious rates of
interest, and then — either before or, more often these days, after, the
point of default — bailing out the Western banks who have been the
agents provocateurs of this financial Operation Overlord, with
newly-minted dollars, to the detriment of the citizenry at home?
Is he not aware that, subsequent to the collapse, these latter-day
Reconstructionists must be allowed to swoop and to buy controlling
ownership stakes in resources and productive capital made ludicrously
cheap by devaluation, or outright monetary collapse?
Does he not understand that he must simultaneously coerce the target
nation into sweating its people to churn out export goods in order to
service the newly refinanced debt, in addition to piling up excess
dollar reserves as a supposed bulwark against future speculative attacks
(usually financed by the same Western banks lending to their Special
Forces colleagues at the macro hedge funds) — thus ensuring the reverse
mercantilism of Rubinomics is maintained? [10]
Privatization also commonly involves a phenomenon known as “tunnelling,”
in which politically connected elites have an advantage in acquiring
rights to the former state property. For example, besides Western
capital, the other group that had funds available for buying up former
Soviet enterprises was the Party nomenklatura, which had accumulated ill
gotten gains from decades of graft and corruption. (Sort of like the
good ol’ boy sheriff who uses labor from the county work farm to staff
his plantation, but on a much larger scale.)
But the line of argument so far applies not only to property currently
under formal state ownership, but to nominally “private” property
acquired through statist means, or to enterprises built with profits
derived predominantly through state intervention. In the comments above
by Rothbard and Hess on occupations by student demonstrators, the
property claims of ostensibly “private” universities funded mainly by
the state were treated as deserving of contempt. They were as liable as
outright state property to being treated as “unowned” and opened to
“homesteading” by the occupiers, the students and/or faculty.
Rothbard applied the same principle to private corporations that derived
most of their revenues from the State. Nominally private universities
like Columbia that got most of their funds from the taxpayer, private
“only... in the most ironic sense,” were as deserving of confiscation
and homesteading as those owned by the State.
But if Columbia University, what of General Dynamics? What of the myriad
of corporations which are integral parts of the military-industrial
complex, which not only get over half or sometimes virtually all their
revenue from the government but also participate in mass murder? What
are their credentials to private property? Surely less than zero. As
eager lobbyists for these contracts and subsidies, as co-founders of the
garrison state, they deserve confiscation and reversion of their
property to the genuine private sector as rapidly as possible. [11]
To treat gross revenue as the main criterion, as Rothbard did, is
probably too simple. The percentage of a firm’s profit margin that has
come from the state in past years is a more relevant standard, since the
present size and equity of a corporation is a result of its past
accumulation. In the case of the United States, the highway-automobile
complex and the civil aviation system were vitual creations of the
State. Large civilian jet airliners were possible only because of
federal spending on heavy bombers. C. Wright Mills pointed out in The
Power Elite that the value of plant and equipment expanded by roughly
two-thirds during WWII, mostly at taxpayer expense. The electronics
industry was built largely from Pentagon R&D money through the 1960s;
and had not the first supercomputers been bought by the U.S. government,
it is unlikely that the industry would have been able to reach the
takeoff point for reducing costs to make mainframe computers economical
for the private sector. And don’t forget the role of the Pentagon in
creating the infrastructure of the worldwide web....
But what of non-monetary benefits from the state, like the ability to
charge monopoly prices thanks to State-enforced patents? Much of the
cartelization of industry in the late nineteenth and early twentieth
century was achieved by exchange of patent rights (e.g. between GE and
Westinghouse). The U.S. chemical industry achieved world prominence only
after the U.S. government seized German patents during WWI and gave them
away to the leading chemical firms. And what of the total effects on the
rate of accumulation owing to the State’s intervention in the labor
market? (This latter would include restrictions on the right to organize
like the Railroad Labor Relations Act or Taft-Hartley; restrictions on
free banking that keep interest rates artificially high, limit working
class access to credit, and maintain debt as an instrument of
discipline.) And then there’s the collective benefit of primitive
accumulation in the early modern period (by which peasants were robbed
of their traditional property rights in the land and turned into tenants
at will by the state), the role of mercantilist force in creating the
“world market,” the near-totalitarian controls on the population during
the British Industrial Revolution, the massive subsidies to internal
improvements, etc.
Taking these things together, it requires no stretch of the imagination
to treat virtually the entire large manufacturing sector as a creation
of the corporate state.
Jerome Tucille once contrasted legitimate libertarian principles of land
ownership with “anarcho-land grabbism”:
Free market anarchists base their theories of private property rights on
the homestead principle: a person has the right to a private piece of
real estate provided he mixes his labor with it and alters it in some
way. Anarcho-land grabbers recognize no such restrictions. Simply climb
to the highest mountain peak and claim all you can see. It then becomes
morally and sacredly your own and no one else can so much as step on it.
[12]
Of course, this Lockean labor standard of appropriation raises all kinds
of complicating issues. Just how much “labor” is necessary to
appropriate a given piece of land? Does it require direct occupancy and
cultivation, or is simply circumscribing it (on foot? in an SUV?) and
marking it off sufficient admixture of labor? If the latter, is there a
time limit? Where do we stop short of recognizing the right of a pope to
draw a line across the map of South America and apportion it between
Spain and Portugal? On the other hand, if some tangible act of working
or altering the land is required, it would seem that the amount of land
an individual could appropriate would bear some definite relation to the
amount he could personally cultivate. In this latter case we are
approaching something like the mutualist “occupancy and use” standard
for appropriation, which is merely an alternative, non-Lockean system of
private property rules (and one to which this author holds).
Tibor Machan inadvertently pointed to the close parallel between the
State’s robbery by taxation, and the robbery involved in much of what is
called “rent”:
In those days the upper classes, from the king to all his cronies,
routinely engaged in extortion. They disguised this, however, with the
phony claim that everything belongs to the king and his cronies. Yes,
monarchs and those who rationalized monarchy spun this fantasy and
managed to sell it to the people that they where the rightful owners “of
the realm,” that they had a “divine right” to rule us. This way when the
bulk of the country went to work on the farm or wherever, they had to
pay “rent” to the monarch and his cronies.
Of course, if I live in your apartment, I pay you rent. It is your
apartment, after all, so you have it coming to you. But what if you got
your apartment by conquest, by robbing a bunch of people of what belongs
to them? That is mostly how the monarchs got to rule the realm, by
conquest. By all rights it is the folks who were working in the realm —
on the land and elsewhere — who actually owned that realm, the monarchs
being the phony, pretend owners, nothing better. But since they managed
to bamboozle a great many powerless folks into believing that they did
own the realm, the “rent” had to be paid. [13]
Although there are significant and fundamental differences between
mutualist and Lockean (and Geoist, for that matter) theories of land
ownership, the issue is beyond our scope here. What is really important
to note is the extent of agreement between these rival theories as to
the illegitimacy of much of present nominally “private” landlord
property. The vast tracts of land claimed by present-day land barons are
illegitimate by any plausible libertarian standard, including the
Lockean rule of appropriation. In early modern Europe, the landlord
class acted through the State to turn its “ownership” in mere feudal
legal theory into a modern right of absolute ownership, and in the
process robbed the peasants who had occupied and tilled the land from
time out of mind of their very real traditional rights in the land. This
process was followed by rack-rents or by mass eviction and enclosure. In
the New World, the state acted to preempt access to empty or nearly
empty land, by claiming it for the “public” domain. This was followed by
restrictions on access by individual homesteaders, coupled with massive
land grants to land speculators, railroads, mining and logging
companies, and other favored classes. The result was to limit the
average producer’s independent access to the land as a means of
livelihood, to thereby restrict his range of independent alternatives in
seeking a livelihood, and thus force him to sell his labor in a buyer’s
market.
In virtually every society in the world where a few giant landlords
coexist with a peasantry that pay rent on the land they work, the
situation has its roots in some act of past robbery by the State. The
phenomenon goes all the way back to the Roman Republic, as recounted by
both Livy and Henry George, in which the patricians used their access to
the State to appropriate the common lands and reduce the plebians to
tenancy and debt slavery. As Albert Nock wrote, “economic exploitation
is impracticable until expropriation from the land has taken place.”
[14]
There is no need for the libertarian right to be so closely wedded to
the corporation as an ideal organizational form. A corporate economy on
anything like the current pattern does not by any means logically follow
from the principles of non-coercion and free market exchange. A free
market society that makes room for the vision of, say, Colin Ward and
Ivan Illich, instead of just Uncle Milty and John Galt, would be a lot
more humanly tolerable.
Among non-libertarians, libertarianism is often perceived as just a form
of Republicanism that’s soft on drug laws. In many cases, this is
unjust. The libertarian movement includes a very large petty bourgeois,
populist strand that goes back to Warren and Tucker and the other
individualists, and has been passed down through the hands of Nock and
Mencken. And most Rothbardians adhere to principles that would mean the
destruction of most big business as it exists today.
But in too many cases, the perception is unfortunately quite just. A
large segment of the libertarian movement is a glorified apology for
those currently on top: for big business against small business,
consumers and labor; corporate agribusiness against organic farmers; for
oil, timber and mining companies who want access to government land with
politically determined leases; and for the settlers in Third World
pariah states or former pariah states like Israel and Zimbabwe at the
expense of the native dispossessed. Or in the words of Cool Hand Luke,
“Yeah, them pore ole bosses need all the help they can get.”
If libertarianism continues to be perceived in this way, as an elaborate
justification of sympathy for the haves against the have-nots, we don’t
stand a snowball’s chance in hell of ever achieving victory. But if we
act on the principles of non-aggression and non-coercion, even when
those principles are harmful to big business, we will have the basis for
a genuinely libertarian coalition of left and right that can storm the
citadel of the State. I hope I have provided some concrete examples of
how these principles can be applied in response to current issues.
[1] “Common Property in Free Market Anarchism: A Missing Link”
)
[2] “Letter From Washington: Where Are The Specifics?” The Libertarian
Forum June 15, 1969 p. 2
[3] In Henry J. Silverman, ed., American Radical Thought: The
Libertarian Tradition (Lexington, Mass.: D.C. Heath and Co., 1970), p.
268.
[4] “The Student Revolution,” The Libertarian (soon renamed The
Libertarian Forum) May 1, 1969, p. 2.
[5] “Confiscation and the Homestead Principle,” The Libertarian Forum
June 15, 1969 p. 3
[6]
[7] “Confiscation” p. 3 8. “How and How Not to Desocialize,” The Review
of Austrian Economics 6:1 (1992) 65–77
[8] “De-Socialization in a United Germany” The Review of Austrian
Economics 5:2 (1991) 77–104
[9] Democracy, the God that Failed (New Brunswick and London:
Transaction Publishers, 2002) pp. 124–31
[10] “You Can’t Say That!” August 6, 2002.
[11] “Confiscation” p.3
[12] “Bits and Pieces,” The Libertarian Forum November 1, 1970, p. 3
[13] Tibor R. Machan, “What’s Wrong with Taxation?”
[14] Chapter 2, Our Enemy, the State