On Inequality, Injustice, and Anti-Capitalism: David D’Amato Replies to Neil Lock

by David D’Amato

Note: For the record, David Davis and I are stand at the Powellite end of the libertarian spectrum. We are, even so, committed to providing a forum in which libertarians of every tendency can meet and discuss their differences in a civilised manner. If this particular exchange contributes to advancing the libertarian case, we shall not have put in so many years of our lives in vain to the LA Blog. SIG

On Inequality, Injustice, and Anti-Capitalism

I’d like to first thank Mr. Lock for his thoughtful, well-mannered observations on my little piece. Commenters such as Mr. Lock honor me with their courteous thoughts and, in my humble view, raise the bar for discussion and debate by refraining from ad hominem and from attempts to impute motives; dealing with my points and arguments themselves, Mr. Lock offers both of us and every other observer the chance to be edified by the exchange. Kudos to him. I hope that he will forgive the use of quotes here to help explicate my individualist anarchism, and that he will further pardon me for not addressing his points seriatim. Also, please be mindful of the fact that the views hereunder belong to me and not necessarily to the Center for a Stateless Society or any other individual in its employ.

In treating the relationship between inequality and injustice, it is important to note that we individualist anarchists ultimately have no problem with the mere fact of income inequality per se. That is, some people should make more money than others, based on factors including the amount of time these people dedicate to toil, their level of skill, and the disagreeableness of the work in question. As Laurance Labadie put it, “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 wealth but will result in returns proportionate to service rendered.” Or else as Henry Appleton put it in the pages of Liberty, anarchism’s “central idea is the direct antipodes of levelling.” What we do propose, however, is to destroy all sources of income that are not based on work of any kind (be it intellectual work or physical—never mind that the line between even these is practically exceedingly difficult to draw)[1], to prevent capitalists form using aggression in the form of privilege to draw what is akin to a tax from labor.

The individualist anarchists often compared rent, interest, and profit to taxation. Whether we agree with them ends up turning to a large extent upon speculation as to the results and relations that a genuine free market would yield. Since we agree that we don’t have such a free market in the present moment, we may disagree as to whether today’s idle rich could continue their lucrative moneymaking schemes absent the State and the many monopolistic privileges it grants them. Thus when we argue with John Beverley Robinson that equality is “a cold mathematical fact” which naturally and ineluctably results from “the hypothesis of free production and exchange,” we are indeed contending at the very least that the widest inequalities of today are the proximate products of privilege—even if not all inequalities are such. The location of the line, again, is impossible to pinpoint. Individualist anarchists, of course, would allow the market to locate it, and have always followed Benjamin Tucker in making liberty the top priority. The point is that we see existing disparities of wealth as hints that something is profoundly wrong—that disparities of political power are in fact at play, with politics not economics claiming responsibility for the capitalistic economic forms of the present.

But then what do individualist anarchists mean by our opposition to capitalism? First, I freely admit that insofar as I defined the word “capitalism” in the way that you do, I would adopt it as a statement of my own economic views. Capitalism as “the condition in which no-one is prevented from justly acquiring or justly using wealth” is a system hardly to be objected to by any thoroughgoing libertarian anarchist. But free market champions like Tucker and Heywood did not define capitalism in such a favorable way, and my C4SS colleagues have set forth several very good reasons why definitions that equate free markets and capitalism probably ought to be avoided.

I would rather join the individualist anarchists in defining “capitalism as a system of privilege, exploitation, accumulation without limit, theft, abuse, and wage slavery, all supported by the coercive authority of the state.”[2] We must remember also that Franz Oppenheimer shared many fundamental economic views with the individualist anarchists and railed against “the idea of using a human being as a labor motor.” Oppenheimer regarded many of capitalism’s most basic elements—for instance, the taking of rent on real property—as products not of the “economic means,” but of the “political means.” This is, I think, the real crux of the disagreement here at issue: To what extents do the relationships and inequalities of capitalism rely on the coercive interventions of the State? Can landlords obtain their rents without land monopoly? Can bankers obtain their interest streams without arbitrary privileges that preclude competition? Can the great manufacturers and retailers obtain their profits without using legal and regulatory means to prevent competitors from cutting in on their margins? Similarly, could they pay so little in wages if the State did not rule out so many natural opportunities? I believe that the answer to all the foregoing questions is approximately “no,” and thus that many if not most of today’s lauded capitalists are Mr. Lock’s Takers, Robbers, Shirkers, and Raiders. This is not to suggest that they are engaged in some conscious conspiracy, only that they are the principal beneficiaries of a system that institutes legal monopoly and therefore allows privilege-holders to accumulate ever more wealth without working.

I’ll stop here, since I’ve run on far too long, but I hope that my comments here shed light on my piece and on the individualist anarchist opposition to capitalism. Thank you again to Mr. Lock for reading and commenting.

[1] As Benjamin Tucker wrote, “If the men who oppose wages—that is, the purchase and sale of labor—were capable of analyzing their thought and feelings, they would see that what really excites their anger is not the fact that labor is bought and sold, but the fact that one class of men are dependent for their living upon the sale of their labor, while another class of men are relieved of the necessity of labor by being legally privileged to sell something that is not labor, and that, but for the privilege, would be enjoyed by all gratuitously.”

[2] Feel free to visit my site www.individualistanarchist.com for more on this.

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  1. I see so there is more of this stuff (Sean Gabb has not given up pushing this vile Black Flag stuff by Mr D’Amato and others – it is not about “providing a platform for libertarians of every stripe”, for reasons that will become obvious).

    No neither interest or rent are “taxation”. Nor is private employment for pay “wage slavery”.

    This dishonest (utterly dishonest) misuse of such words as “taxation” and “slavery” is disgusting. It is in the tradition of Rousseau and his collectivist mentor the Abbe de M. So much for it being “individualist”.

    This stuff (by Mr D’Amato and others) is a denial of a central principle of Classical Liberalism and Libertarianism – the “natural harmony of long term economic interests” between employers and employees, “the rich” and “the poor”. It is CLASS WAR stuff – no better when it comes from a follower of the Black Flag than it is from a follower of the Red Flag.

    People who advocate the non-payment of rent and the non-payment of interest on loans place themselves outside any “civilized” debate – they are striking at the very foundations of civilised order (of civil society itself).

    Lastly some inequality IS INDEED artificial – but not because of such things as interest and rent.

    The primary cause of ARTIFICIAL inequality is the (government backed) efforts to finance borrowing over and above REAL SAVINGS.

    The effort to finance borrowing by credit expansion – not the sacrifice-of-consumption by real savers.

    As Richard Cantillon pointed out as long ago as the 1700s – such credit-money expansion tends to favour the rich at the expense of the poor (even after the boom-bust has worked itself out, things are NOT as they would have been – distortions remain). One need only look to the history of so much of Latin America to see the terrible long term effects of trying to finance borrowing by credit-money expansion rather than by real savings.

    “Oddly enough” I can not see one word in Mr D’Amato’s article about how all borrowing must be from REAL SAVINGS (the sacrifice of consumption by real savers) not credit-money expansion.

    So the idea that he is upset about ARTIFICIAL inequality (which is primarily caused by credit money expansion) is false.

    On the contrary, it is what even Murray Rothbard accepted as “natural” inequality that Mr D’Amato is opposed to (although he denies this – and it is the dishonesty of the denial that is one of the reasons that “civilised” debate with him is not practical).

    He (D’Amato) writes as if the fallacies of David Ricardo (on land and so on) had never been refuted (by Frank Fetter and others on land – as for the Labour Theory of Value that was refuted even by economists in David Ricardo’s own lifetime).

    Whatever else he was (and I fully admit that there was much that was bad about him), Murray Rothbard was not ignorant of basic economics (on things like interest and rent) – he would not have tolerated this D’Amato stuff.

    Let alone pushed it.

  2. Dear David,

    Thank you for your courteous remarks. I think it important that liberty lovers of differing viewpoints should make the effort to draw out and to understand each others’ views. And that to strive to be polite is usually worth the effort.

    I think we are quite close to resolving one of my original questions, around the definition of capitalism. I had a look at the Gary Chartier essay you linked to. In the terms of that paper, my definition is what he calls capitalism-1. I have taken to calling this “true capitalism.” Capitalism-2 is what I call “crony capitalism,” and capitalism-3 is “corporatism.” Like you, I have no time at all for either of these perversions.

    My one remaining difficulty is that many ordinary people use, whether consciously or not, a definition of capitalism similar to mine. Such people will tend to think, when presented with arguments against “capitalism” without any qualifier, “But they’re against the accumulation of capital!” And this is likely to turn them against the arguments, since the ability to accumulate capital is necessary to allow individuals more than a hand-to-mouth existence.

    I think the solution is probably that, where we wish to use the concept “capitalism” in a pejorative sense, we should either precede it with “crony” or replace it by “corporatism,” according as what we are actually criticizing is capitalism-2 or capitalism-3.

    As to interest, I tend to the view that interest is necessary, in order to add a time dimension to money. Where interest goes wrong is where rates are set by something other than the market. On land rents, I confess that I haven’t done any deep thinking on the subject. But my first jump would be towards the position that, while it’s OK to rent out justly acquired land, to charge rent on land whose possession has been obtained by violent conquest or by state coercion or fraud is very much wrong.

    As to wage slavery, I heartily agree, and from personal experience too. By profession, I am a one-man software consultant. I know that a one-man business, working all the year, can make about 3 to 4 times as much as the same person working as an employee in a software house. Back in 1999, New Labour brought in tax legislation with the intent to kill off one-man companies. They even, at one point, contemplated simply declaring my livelihood to be “illegal!” Fortunately, I’ve managed to find ways around the worst of it; one of which is not to work all year, and so to free up time to do other things, like read and respond to libertarian essays.

    Last, on justice and equality, I’m not happy with Labadie’s expression “equality of opportunity.” I prefer “abundance of opportunity.” That is, no restrictions on economic opportunity – just as capitalism-1 does not restrict opportunities to justly accumulate capital.

    For what it’s worth, my own characterizations of justice and equality are as follows: Justice is the condition in which each individual is treated, overall, as he or she treats others. And equality is moral equality. That is, what is right for one to do, is right for another to do under similar circumstances, and vice versa.

    As it happens, I have very recently completed the writing down of these ideas, and much that flows from them, at short (150 pages) book length. Though I don’t think I’ve actually met any of you at C4SS, I have read lots of your work, particularly the work of Kevin Carson, Thomas Knapp and yourself. So I plan to take the liberty of sending some copies of my book to C4SS for your entertainment and perhaps edification, and as a token of thanks for the good work you have all been doing over the past several years.

    I am placing this comment on the Libertarian Alliance site, but please feel free to re-post it at C4SS if you wish.

  3. Neil, I look forward to reading your book-length piece!

    One small bit by way of response to the following:

    “My one remaining difficulty is that many ordinary people use, whether consciously or not, a definition of capitalism similar to mine.”

    When different people use the same word but mean different things by it, that’s obviously a problem.

    I used to call myself a capitalist, by which I mean “a supporter of free markets.” And I even called myself an anarcho-capitalist because I don’t believe that free markets are compatible with the existence of the state.

    Over time, I came to notice that MOST people — not Austrian School academics, not libertarian wonks, etc., but MOST REGULAR people — think that capitalism means what it meant when Thackeray coined the term and Marx popularized the term. And that definition is (to quote Fred Foldvary’s Encyclopedia of Free Market Economics) “a mixed, state-regulated industrial economy.” And more specifically, they think of it as a system in which the state advantages favored economic actors (among them businesses) at the expense of others (among them the very “most regular people” who are doing this thinking).

    Which, to me, makes the term “capitalism” useless as a descriptor of what I favor (free markets). And which, to me, makes the term “anarcho-capitalism” nonsensical, since if capitalism is state-regulated it is obviously not anarchistic.

    The gap between real, actual, bona fide free markets and actually existing capitalism is a chasm into which the people Kevin Carson describes as “vulgar libertarians” fall. “Vulgar libertarians” say they favor free markets (on this they agree with left-libertarians, and I believe their agreement is honest). “Vulgar libertarians” say they oppose the state and want to either abolish or minimize it (on this they agree with left-libertarians,” and I believe their agreement is honest). But “vulgar libertarians” conflate those outputs of the mixed, state-regulated economy (“capitalism”) which they LIKE with “free market” phenomena (whereas non-vulgar libertarians in general and left-libertarians in particular understand they clearly are no such thing).

    I generally consider “vulgar libertarians” to be “libertarians in error” rather than “non-libertarians.” But a certain sub-set of them, a sub-set which does not go at all unrepresented in this particular venue, will come right out and say that if it is true that actually existing capitalism is a “mixed, state-regulated industrial economy” then we should abandon our opposition to the state, get down on our knees and thank our masters for the iPads which they fervently (and entirely without evidence) believe Kevin Carson wants to take away from them.

  4. Thomas-

    Maybe there is a genuine difference between the USA and UK in this. Because my impression here is that people use the word capitalism as a synonym for free markets. As such, they see socialism (state control) and capitalism (the absence of state control) as antipodal. And they see the mixed economy as a mix between socialism and capitalism. They strongly associate capitalism with deregulation, privatisation, reduction of state provision of services, etc. And they would associate “ultra-capitalism” as some kind of minarchy or night watchman state. So “capitalism” remains a good word for free marketeers.

    So for me as a free-market libertarian, it is easy to use the word capitalism to explain what I am in favour of.

    As I say, this might be quite different in the USA.

      • Or maybe we should adapt our language to the audience we’re speaking to. If they think “capitalist” means free market, use that word. If they think “capitalist” means “corporatist”, find a different one.

        There does seem to me to be a stronger “capitalism=corporatism” narrative in the USA. It comes through a lot in both political discourse and the media, as with the dreary cliche of near-future science fiction depicting a world governed by corporations, who act like organised crime. You see this over and over again in Hollywood movies.

        So maybe American and British Libertarians need different discourses. Indeed, this feeds into my own belief that us Europeans need a distinct “Euro Libertarianism” that addresses our cultural landscape. This is true in many areas; for instance the discourse on State services provision (e.g. healthcare and welfare) really has a quite different character to that in the USA.

        I’ve been arguing for a long time that we need to be more philosophically subjectivist. It seems to me that much of teh argument within Libertarianism boils down to us talking past each other, because of a failure to recognise differences in conceptual models.

        • Ian,

          I think you’re right. Here in America we don’t have the long history that Britain does, and what history we have we really only consult back to 1770 or so.

          If you told the average American that well into the 20th century the sun never sat on the British Empire, he’d think you were nuts. As far as the average American is concerned, the UK existed for the sole purpose of giving birth to the US, after which it became an extraneous appendage of the US. Every Briton has an American inside him trying to get out, and until then your guys’ purpose in life is to entertain us with your funny accents.

          I confess that it’s really only in the last decade or so that I’ve begun to overcome that mindset myself.

  5. “This is not to suggest that [landed capitalists] are the principal beneficiaries of a system that institutes legal monopoly and therefore allows privilege-holders to accumulate ever more wealth without working.”

    This quote gives the game away, regardless of the economic status and claimed philosophy or ideology of the speaker — whether he be “anarchist,” Communist, socialist, “conservative,” “liberal,” or whatever.

    And the crux of the game is Envy. It just isn’t fair that some people should have wealth without “working.”

    But here’s the thing. Assuming I am so fortunate as to live in a society all of whose members enjoy genuine political liberty, what do I care how some other guy comes by his wealth, as long as it wasn’t by cheating or deception or outright physical theft? He’s got his life, I’ve got mine. And he didn’t take anything away from me to get where he is.

    Or perhaps I don’t admit to envying him for my own sake, so to speak; that would be rather crass, wouldn’t it. So OK, I’m fine with his wealth, personally. But I sure do feel for all those poor slobs who have to work for a living. So I’ll conduct a campaign against people who have wealth without “working” for it, in the name of those poor “wage slaves,” instead of in my own name. It’s not for me, it’s for those other poor schlubs.

    By the way, amazingly many people fail to see whole fields of human endeavour as constituting legitimate “work.” Academicians and artists of various sorts just aren’t, well, you know, working. Nor people involved in finance. Or people who write books.

    There is a story about some highly successful and famous musician — I want to say Lenny Bernstein, so let’s pretend that’s who it was — whose parents until the day they died kept saying, in all seriousness, “So when are you going to stop with the music and get a real job?”

    “Thou shalt not covet thy neighbor’s house, nor his wife, nor his servant, nor his ox, nor his ass; nor anything that is thy neighbor’s.”

    And Wikipedia* (!) says, “This commandment forbids the desire for unjust acquisition of another’s goods.”

    The very heart of practical libertarianism.

    * https://en.wikipedia.org/wiki/Thou_shalt_not_covet

    • Julie.

      First, I think you may have unintentionally inverted David’s meaning here.

      What he said was, in essence: “I do not suggest that the defendants have committed serious crime X; only that they have benefited from the lesser crime Y.”

      You paraphrased this as, “I do not suggest that the defendants have benefited from crime Y.”

      Indeed, David did suggest that they had benefited from that crime. And he was right.

      Ah, there’s another piece of advice for libertarian writers; do NOT, NOT ever avoid double negatives!

      More substantially, though, David criticized the current system because it “institutes legal monopoly and therefore allows privilege-holders to accumulate ever more wealth without working.” And you super-paraphrased him as saying, “It is wrong to have wealth without working.”

      I think you might do well to look at some of the other words David used in that same sentence: “legal monopoly” and “privilege-holders.”

      (BTW, I too lived near Chicago for a year – almost 25 years ago now.)

      • This is the kind of mess a society gets into when it cleaves to something as wrong-headed as the Work Ethic. Property is not justified by labour. It is justified by non-coercive acquisition.

        E.g. if I have acquired some land by (libertarian) legitimate means, I can rent it out and make money. Whether I am doing something that somebody else considers to be “work” is irrelevant. We ditched the labour theory of value a long time ago. It is high time we ditched moral and ethical assertions predicated on it as well.

  6. I think Ian’s diagnosis is right; those from different fractions of the liberty movement tend to talk through each other, and a lot of it is because they (we?) use the same words with different meanings.

    But I’m not so sure about Ian’s proposal for cure. I can see why, when giving examples to support your thesis, you should stay close to home. I doubt, for example, whether most Yanks would know who Nigel Farage is, or most Brits Paul Ryan.

    However, when stating our theses (plural deliberate), I think we should be aiming, as far as we can, to avoid misinterpretations due to cultural differences. That was one of the points I tried to make in my earlier comment on this thread.

    Let me give a silly example. When speaking of garments for the lower part of the body, we should never say “pants.” Rather, we should prefer “trousers” or “underpants,” neither of which (I hope) would be misinterpreted on either side of the pond.

    So, we should not speak of “capitalism” without qualifying it to say what we mean.

  7. Neil Locke “liberty lovers of different view points…..”.

    There is no common ground (no pun intended) between someone who wants to a take landed estate and someone who wants to stop him.

    There is no common ground between someone who regards private employment for pay as “slavery” and someone who regards that as disgusting insult.

    There is no common ground between someone who thinks that interest on a loan should be paid – and someone who thinks it should not (indeed that the very idea of interest is some sort of outrage).

    If Mr D’Amato is a “liberty lover” then Murray Rothbard (let alone Ludwig Von Mises) certainly was NOT.

    The idea that there can be some sort of civil “dialogue” with someone like Mr D’Amato is just potty.

    Nor is the (true) statement that we do not live in a free market of any help here.

    There are two primary reasons that we do not live in a free market.

    The massive size of government spending (some half of the entire economy in most Western nations) – mostly on the out-of-control Welfare States.

    The out-of-control Welfare States are naught to do with the alleged wickedness of “capitalists” and “big business” – and everything to do with Social Justice ideology.

    The other main reason we do not live in a free market society (or anything close to it) is the effort to finance borrowing by monetary expansion, not REAL SAVINGS (i.e. the sacrifice of consumption by real savers) – the “low interest rate” policy (now close to a no-interest-rate policy).

    I do not remember Mr D’Amato saying that all borrowing should be from REAL SAVINGS (at an interest rate agreed between borrower and lender) – please correct me if he says this somewhere and I have missed it.

  8. Neil, the quoted material is NOT paraphrased.

    It is a direct quote of the final sentence, written by Mr. D’Amato, of the penultimate — or second-to-the-last — paragraph, written by Mr. D’Amato, of the main body of his, Mr. D’Amato’s, piece, which is followed by final paragraph of the article proper, and then footnote [1].

    [My only editing was to place the antecedent of his pronoun “they” in (square) brackets in the quote. I confess that I misread his word “lauded” as “landed,” so my substitution is not perfectly accurate, although the difference in meaning is minor in his particular context. It simply implies an objection to all wealth gained “without working” (whatever that means to him) rather than being chiefly aimed at the wealth of those whose wealth grows “without” their “working” and who happen to have large real-estate holdings.]

    I am quite aware of what the sentence says and means; your own formalized statement of the idea is quite accurate; as is my criticism of Mr. D’Amato’s position as summarized in the final words of that sentence written by him: the bit about wealth acquired “without working.”

    Ian’s comment of 13 September, 2014 at 4:00 pm regarding the the acquisition of property is directly on point:

    ‘Property is not justified by labour. It is justified by non-coercive acquisition. …. Whether I am doing something that somebody else considers to be “work” is irrelevant.’

    Note that economic “wealth” is a form of “property.”

    It’s not that I have no disagreements with the rest of the article (or with the implications thereof); it’s simply that, as I said in the first comment, the bit about “acquisition of wealth without working” reeks of envy and an unrealistic conception of and obsession with “fairness” as a social ideal, and this in particular leaped out and grabbed me.

  9. Ian and Julie on property – agreed.

    As for Thomas – he claims to be against the looting of property holders (regardless of how much property they hold). Yet he supports people (such as D’Aamto and Carson) who make it obvious that they do want to loot large scale property holders. And when anyone points this out – Thomas simply responds with his “liar, liar, liar” tap dance.

    • Ian and Julie,

      OK, let me pull back from the snark a bit.

      I am the second most qualified person to judge what D’Amato meant in the sentence that Julie cites as “giving the game away.” The first most qualified person would, of course, be D’Amato himself. I’m second most qualified by virtue of having edited D’Amato’s work for publication for years, including this piece.

      Neil’s interpretation is the correct one. Period.

  10. Mr D’Amato has made it clear (in posts on this very site) that he regards both rent (on land) and the payment of interest on loans as forms of “taxation”, and that he regards working for wages as a form of “slavery”.

    If this is Black Flagism (and it clearly is) then Black Flagism is evil.

    • Julie and Ian,

      I encourage you to closely read D’Amato (not just at C4SS but at the Mises Institute and in other publications) and compare his actual claims with Mr. Marks’s claims about him.

      As for Mr. Marks, I’ve given up responding to him directly on these subjects on the advice of Robert Heinlein (“Never try to teach a pig to sing; it wastes your time and it annoys the pig”).

  11. Thomas – the one virtue of D’Amato is that he is fairly clear about his (evil) beliefs.

    Your denial that he says what he says, shows that you (not me) are the “liar”.

  12. To state the obvious…. if Ludwig Von Mises was alive (he actually died years before the “Ludwig Von Mises” Institute was created) nether Mr D’Amato or Mr Carson would be published there – as they stand diametrically opposed to what Ludwig Von Mises cared about.

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