Center For a Stateless Society is a think tank that combines free market economics with the Proudhon influenced Anarchism of American Individualist Benjamin Tucker. Some of it's key writers are Gary Chartier, William Gillis, and Kevin Carson. Gillis linked two articles on twitter in a response to a thread asking about the need for markets in social organization. I will be looking at the arguments these two articles make from an anti-market perspective.
The first article consists of a hypothetical scenario in which roommates try to decide who should get the better room in the house. One roommate proposes a trade off where the roommate that gets the better room would receive less fruits and nuts from the household. The other argues against this in favor of informal discussions that try to gauge the need each roommate has for the room. This hypothetical is very strange. I grew up with a younger sibling so we constantly fought over who should get what, but we never tried to decide this, nor did our parents, through exchange arrangements. I didn't offer my sister the top bunk at the Great Wolf Lodge in exchange for my Batista wrestling action figure. We simply alternated the top and bottom bunks throughout the duration of the trip. Hell, when my sister got an elimination chamber playset for Christmas, since we both liked it, it became essentially our joint toy, we even created more enjoyment with the toy by playing together.
My real life experience with these kinds of scenarios is much more communist, it seems, than the hypothetical set up by the C4SS article. The contrived scenario aside, the line of argument put forward by the article is very typical of neoclassical economics. Instead of actually examining how the social structures exist and behave historically we analyze a fictive model of those structures, but it's even worse in this case. Instead of a static model of an actual institution such as a model of "the firm", we are treated with a Platonic dialogue on household economics (the stand in for Socrates being the advocate of food deduction for room exchange). Markets exist in the sphere of production, not in the sphere of reproduction. So starting off with a household hypothetical is just missing the point entirely.
The point the article argues is that exchange reveals our preferences through the physical relationship of trading one commodity for another. This bypasses the lack of clear objective guidance on how to allocate resources present in non-exchange forms of distribution. This is essentially a retread of Mises' calculation problem. The argument by the neoliberal economist from Austria trying to assert that the newly formed Russian Soviet Socialist Republic was headed for failure (that would take some 70 years as it turns out), was that market prices provide the necessary inputs upon which to do rational economic calculations and thus make rational production decisions. It was the socialist philosopher of science, Otto Neurath, who completely imploded Mises' argument.
Neurath pointed out that Mises was simply bearing a false assumption about how social decisions are made. Rational calculation may be a means to the end of making decisions, but nothing about social decisions is straightforwardly rational. Humans, within their societies, apply their own subjective goals to the organization of their societies, this is the real foundation for decisions, productive, or otherwise, not some numerical, empirical, input. There is no logos upon which humans make all of their social decisions.
In fact, Socrates' opponent in the hippie commune dialogue makes this point for me:
This is just making the situation worse, because surely we each value nuts and fruits differently. Some of us may enjoy walnut butter strongly, others not at all. One person may be totally fine to surrender their percentage of the Orchard's bounty. This is to say nothing of the differences that exist within the category of "fruits and nuts"- are you going to have us trading fractions of our claims to avocados vs figs?
Market Anarchist Socrates responds by stating that their point isn't to create stringent contracts for every proceeding, but only to create a situation of cost and benefit that would provide a better basis for the making of the decision in this instance. Socrates' opponent correctly responds by reasserting their original point, which Socrates' response fails to actually address. Benjamin Socrates chooses to address the actual objection this time, saying that really, humans have one standard that drives all of their activity, pain vs pleasure. This amounts to a mere assertion of the veracity of utilitarianism as an ethical theory, something, again, relied on by neoclassical economists. The problem with such a theory is how pain and pleasure are actually "generalized", as the opponent in the housing cooperative dialogue points out.
The response by Pierre Joseph Socrates is simply to beg the question, trying to derive the conclusion that pain and pleasure can be generalized from the premise that they are generalized. This problem doesn't present itself in actual markets. Markets are categorically not simple tools used for distribution at the whim of the participants, as the end of the article tries to demonstrate. Ludwig Von Socrates becomes exasperated at the end of the dialogue at the notion that markets and capitalism are linked.
The basic article of faith of Left-Wing Market Anarchism as represented by C4SS is that capitalism is an impediment to market freedom, not the result of it. Socrates points out that markets existed before capitalism and only once hierarchies transformed markets did capitalism come about. This is at least partially true, but it certainly isn't completely true, however, we will save that debate for another day. What is imperative to point out is that markets are not simply "tools" as Socrates suggests in the dialogue. Markets are governing mechanisms. By producing for exchange production now becomes regulated on a general standard that imposes itself on all producers. All of the producers now must meet the labor time socially necessary (demanded by the market and levels of production) to produce any given commodity. The market is indeed a set of social relations, not a simple tool, so criticizing it's existence is not the same as criticizing the existence of a hammer.
The second article isn't a Platonic dialogue (thankfully) and is instead a straight forward essay. It draws on the calculation and knowledge problems by name. We have already met the calculation problem. It and the knowledge problem of other neoliberal economist from Austria, Friedrich Hayek, are asserted by theorists of the problems, as well as Hayek himself, to be essentially the same thing. They aren't, it would be beside the point to get into why, you can see for yourself in the reading provided on the issue below, the point is just that they aren't the same and that this second article is riding on the knowledge problem primarily as opposed to the calculation problem.
The knowledge problem states that central planners lack the knowledge that everyone else at every point of the production and distribution process has and thus can't make effective decisions. Market prices, by contrast, express this knowledge because they are decentralized. Hayek assumes the false dichotomy between top down planning and market exchange, but this second article attempts to apply the argument to bottom up planning as advocated by libertarian communists. It does this by giving the knowledge problem a Leninist flair.
Lenin had rhetorically supported worker control both during and after the Russian Revolution. When the Bolsheviks began the process of constraining the class struggle; ending the revolution to allow for state craft, Lenin disavowed his libertarian side and leaned heavily on his social democratic instincts for centralism. Lenin specifically argued for an end to worker control of production because it caused "endless meetings" where nothing got done. This is the same argument advanced by our second article.
The article contends that the limits and tedium of language would turn bottom up planning into top down planning since microphone time is easily monopolized. Thus Lenin's feared horizontal bureaucracy is just as feared by the partisans of Market Anarchism. It certainly is interesting that the partisans of subordination to the plan and partisans of subordination to the market are in complete agreement on the need to defend the dichotomy between central planning and market exchange. This is not the only time socialists have been very impressed with the knowledge problem.
The failure of Soviet planning and the arguments put forward by Mises and Hayek convinced many socialists to the point that "market socialism" became sheen, where market exchange would be preserved to avoid the knowledge/calculation problems. Market Anarchists are likewise so convinced by these problems that they attempt to apply them where Hayek and Mises didn't, to participatory kinds of planning. The massive scandal, if you haven't guessed, is that both the calculation and knowledge problems are flimsy appeals to dilemma. A supposed "problem" is constructed out of whole cloth from a fundamental misreading of the workings of human societies. We already examined the false assumption of the calculation problem, now we deal with the false assumption of the knowledge problem.
Hayek's argument rests on two assumptions, both wrong. The first is that centralized structures are neutralized in efficiency terms by bottlenecks in knowledge. These bottlenecks are real enough and do pose problems for centralized structures, but these problems are nowhere near serious enough to actually neutralize the efficiency of such systems. Centralized social structures are reliant on the mental and manual division of labor. Their very essence is a social reality in which only a few are given the resources to think and manage while everyone else is left with the grunt work. This means that knowledge bottlenecks aren't actually problems for these structures, rather, the very basis of them.
Of course this produces it's own internal contradictions, some of which effecting efficiency, but these contradictions relate the inherent instability of any type of inequality, whether the mental and manual division of labor, class differences, racism, or sexism. For these reasons the knowledge problem simply can't be demonstrated empirically. Theorists of the knowledge problem have tried to appropriate the fall of the Soviet Bloc as empirical validation, but this took, count um, 70 years. Why is the knowledge problem so slow acting if the issue it poses is so definitive? Further, the problems with Soviet production were primarily problems of light and consumer industry. Despite the kabuki nature of the process at times the Soviet Union created a massive military industrial edifice. Does the knowledge problem only apply to light industry and consumer goods? What sense could that possibly make?
The bigger empirical problem is that we have lived in centralized societies for thousands of years, how would that be possible given the knowledge problem? When will it finally manifest itself and deliver the world neoclassical socialism already? One could try to argue that the knowledge problem is something like the falling rate of profit, or climate change. It's not a definitive death knell, at least not at the outset, but a background tendency producing more problems gradually. Well, that's not at all how it's theorized. Unlike with the rate of profit there is no actual mechanism for stalling decline (increased accumulation after crises clears out the economy) and no reason to think that that the mechanisms of the knowledge problem operate as slowly as we know climate change does. In fact, the problem doesn't have any mechanisms at all, which all countervailing tendencies need to have. It's simply the assertion that central planners are too out of the loop to plan. Both the knowledge and calculation problems are simply appeals to dilemma that fail to actually pass the litmus test for "genuine issue".
BUT WAIT! The second article anticipated this response:
And this all takes us to a huge expanse of objections to markets that basically boil down to "but capitalism has many planned and non-market aspects and it kinda survives". This is essentially another variation of appeal to the USSR. Capitalism is mostly inefficient when measured in terms of individual desires, all it's efficiencies are optimized around maintaining and strengthening power. It is a project of power, for power.
Every Anarchist Communist will nod their heads in affirmation of this statement. However, the tiny problem here is that, while this works as an argument that the efficiency of centralized structures is not enough to make them desirable, it also completely falls flat as an argument against the lack of empirical validation for the knowledge problem. The author flatly admits that centralized structures are efficient with respect to their own aims, thus voiding the knowledge problem of any relevance on the author's own view.
So what about this Leninist-Market-Anarchist version that addresses bottom up planning? Well it doesn't do what it says on the tin. The article tries to address the conception of bottom up planning in libertarian communism, but simply deals with a stereotyped version of it in which it's main institutional mechanism is discussion and meetings. No Anarchist Communist has ever put forward a society of deliberation. Once again, I am left pleading for somebody to actually explore the possibilities offered by bottom up planning in earnest. Here, I'll throw the critics a bone.
The main mechanism of libertarian communist bottom up planning is freely associated action. There are no fixed models of bottom up planning in the Anarchist Communist tradition. Instead this vision relies on fluid free relationships in which individuals cooperate for their collective personal development. Behind this all is the creative energy of humanity; human beings being driven for personal fulfilment, they are freed to strike up relations on their own consensual terms and thereby do what they want within the realm of the possible and use their talents to expand that realm. If critics want to finally deal with bottom up planning in a satisfactory way, this is the view they need to attack, not nonsense about the limitations of linguistic expressiveness.
BUT WAIT! Says Billy Maze, I speak too soon yet again..kind of. The second article tries, very tepidly and timidly, to address the actual libertarian communist view, arguing that even with overlapping arrangements that re-center individual desires the lack of knowledge of unintended consequences will cause bureaucracy to reemerge. Whence does this lack of knowledge actually come from? It can't be because language is limited as we already showed this to be a strawman. So..why exactly would freely associated producers not know enough about unintended consequences of production and distribution to make sound decisions? Except for a jab at Parecon (which certainly isn't my model, nor is it equivalent to the libertarian communist model generally), there is no actual argument to back this assertion up.
Lenin's alternative to self-organization was one man management and the Commissariat. The Market Anarchist alternative is self-organization + markets where self-organization will be inefficient. This echoes the position of the left-communist opposition within the Bolshevik party that criticized state-capitalism and instead advocated state control of production, labor discipline, and wages, but this time with some worker direction at regional level. Just as we need to curb self-organization to make way for the bureaucracy of the plan, we need to curb it to make way for the discipline of socially necessary labor time. Free association? Clearly refuted by the Platonic elitism of rejecting the idea that the demos have the qualifications to govern...
Putting aside the general objections to the market levied by communists, we now must come back around to Hayek's second (wrong) assumption. Hayek assumed that prices were extremely efficient communicators of knowledge across the social system because when every producer can set the prices of their goods, they communicate their knowledge of their sphere of production by levying that price. Thus for the Market Anarchists who have written these two articles prices are "revealers of preference". This is just neoclassical nonsense on it's face. Producers and consumers don't have perfect information conveyed through supply and demand. Everyone knows by now that those models are wrong, even the neoclassical theorists that use them.
In reality prices reveal nothing, but the fact that semi-monopolies exist. The Market Anarchist credo is freed markets. For the Left-Wing Market Anarchist capitalist markets are distorted by state advantages given to firms. This sentiment is expressed in both our articles, but it is most fully fleshed out in Kevin Carson's The Iron Fist Behind The Invisible Hand. The power of corporations, the primitive accumulation that made capitalism possible including the forcible enclosure of land in Europe, the existence of the capitalist class itself, all distortions of the market by the power of the state. These arguments have some force behind them.
LWAs are quite correct that capitalists hate free markets and do whatever they can to insulate themselves from competition. They are also entirely correct that without the state capitalists couldn't retain their wealth, political power, nor even their profits. However, the picture isn't so simple. It's just not the case that the real market is bubbling under the surface waiting to be freed from state intervention. The market itself is the outcome of state intervention. Why? In an actual free market nobody would have any affective control over any of the best production processes. With no centralized, sovereign, and coercive institution to provide me property, subsidies, and patents I have no way of exorcising control over any unit of production as an independent producer. I have to do this, however, if I want to exist as a firm. I can only be financially solvent by using control over the production process to set sales prices where I need them to be.
Thus the state steps in to make market exchange possible by providing me, in the form of the above listed advantages, with partial control over production for a limited period of time; a semi-monopoly. So markets aren't decentralized in any meaningful sense and abolishing the state essentially requires abolishing the market. If the state goes away no independent producers will have any control over any production processes, which, as a dirty commie, I'm perfectly fine with.
Sources
Calculation Debate and Socialism
Critique of Neoclassical Econ
Info About The Soviet Economy
Literature on Libertarian/Anarchist Communism
Semi-Monopoly
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