by Kevin Carson
To Paul Krugman: Thou Art the Man
Note by Sean Gabb: Kevin has a point of view on these issues that I respect but do not wholly share. Even granting he is a scumbag statist, Bill Gates is one of the greatest benefactors of mankind alive. Thanks to his vision in the early 1980s, nearly everyone nowadays has a computer, and most of us use the standardised operating and applications software he has provided. He has provided us with the weapons to equalise the relationship between state and people. To say that this would still have happened in some other way doesn’t get round the fact that it has happened as it has. Speaking personally, he has enabled me to transform myself from an unknown hard copy scribbler into the person of such significance or notoriety as I now possess and have always wanted to possess.
I also like Amazon. It has given me a marketplace for my books that would not otherwise exist.
For the record, I also like Google. There are other search engines, and these may do the same job. But Google has spent years providing me with old books free at the point of use. Thanks to Google, I can read anything published in any language I know between the invention of printing and just after the Great War.
Oh, and I like Createspace and Lulu and YouTube and the Cloud and WordPress and PayPal and E-Bay, and all the other manifestations of corporate capitalism that have enriched my life. If I think Twitter is a waste of time, and regret the time I have spent on FaceBook, I am still massively in credit from the IT revolution as it has so far taken place. So are we all.
It is entirely legitimate to complain about the ethical failings of these companies, and to argue for a system in which the same ends would be achieved by more libertarian means. But we are where we are, and we should all be grateful for the good things we have had from them.
Libertarian utopias, as they are generally conceived, will be better than the world in which we now live. At the same time, we are not living in Nazi Germany or Soviet Russia; and our criticisms of actually existing capitalism need to be tempered by an appreciation of the benefits we enjoy. SIG
Paul Krugman, in denouncing the excessive market power of Amazon (“Amazon’s Monopsony is Not OK,” New York Times, October 19), proclaims that the Robber Baron Era ended when “we as a nation” put an end to it.
There’s a powerful story in the book of 2 Samuel about the prophet Nathan confronting King David after he arranged the death of Uriah the Hittite and took his wife Bathsheba for himself. Nathan told David of a rich man, with enormous herds, who had a guest to feed. The man, to spare himself killing one of his own many livestock, instead stole and slaughtered the pet lamb of the poor man next door (which, the Bible says, he fed from his own plate and loved like a daughter). Upon hearing this David became outraged and swore “As the LORD liveth, the man who hath done this thing shall surely die.” And Nathan replied: “Thou art the man.”
Not only did the rule of Robber Barons in fact never end, but in denouncing them Krugman reveals himself as one of their foremost apologists.
Far from bringing Robber Baron rule to an end, the Progressive Era stabilized it in a web of government protections and subsidies. For example, the FTC’s treatment of below-cost dumping as a “unfair trade” practice, by outlawing price wars, made stable oligopoly markets possible for the first time.
Let me state up front that, while Amazon doesn’t actually qualify as a monopsonist (that is, a market actor with monopoly buying power that can unilaterally set terms for sellers) it is at least an oligopsonist (in this case the largest of a relatively small number of major buyers/distributors). As an anarchist who viscerally hates large corporations, and hates perhaps even more all kinds of proprietary, walled garden platforms, I’d much prefer to see an open-source or cooperatively owned platform taking over Amazon’s current role.
But that being said, if Krugman wants to fight Amazon, he’s picked a mighty peculiar hill to die on. Specifically, he objects to Amazon’s use of its market power as a buyer to force down the prices of traditional publishers like Hachette. But those prices are themselves enormously bloated to begin with, because of the monopoly premiums attendant on copyright. Amazon’s use of its purchasing power to shave off that monopoly premium is analogous to, say, Medicare D using its market power as a large-scale purchaser to negotiate down the price of prescription drugs under patent. (Of course we know Medicare doesn’t actually do this, or hardly does it, because of the drug companies’ lobbying power.)
Support for draconian “intellectual property” laws, like the WIPO Copyright Treaty, the Uruguay Round TRIPS accord, the Digital Millennium Copyright Act, and the “intellectual property” components of all the so-called “Free Trade Agreements” proposed over the past decade or so, are strongly supported by both Republicans and Democrats. But the Democrats have an especially close relationship with proprietary content industries — the RIAA, MPAA and Microsoft are at the core of the Democratic coalition.
To repeat, the Robber Baron Era never ended. And far from being the Robber Barons’ enemy, the US government has been their chief tool for survival to this day. And perhaps the single most important function of the US government in upholding corporate power is enforcing “intellectual property,” so central to the business models of the proprietary content industries in the Democratic coalition. The most profitable industries in the global economy — entertainment, software, biotech, pharma, electronics — all depend on “intellectual property.” “Intellectual property” is central to the dominant industrial model by which Western corporations outsource all actual production to independent shops working on contract, but use patents or trademarks to retain monopoly rights over disposal of the product.
And perhaps more importantly “intellectual property” is at the heart of the business model of the new “green capitalism” or “progressive capitalism” personified by “patriotic billionaires” like Bill Gates, Warren Buffett and their ilk. Their business model depends on using “intellectual property” to enclose new, green technologies as a source of monopoly rents, or — as in Buffett’s case — using heavily subsidized “smart grid” infrastructure to make his wind farms profitable.
The Robber Barons are with us just as much as ever, their power depends entirely on the capitalist state, and “progressives” like Paul Krugman — wittingly or unwittingly — are their shills.
As has been pointed out on “Café Hayek” and other places, the history of Paul Krugman is wrong – (but not in the way that Kevin thinks it is).
Standard Oil (and so on) was not a “robber baron” – it did not commit “abuses” against customers, it greatly benefitted customers Government “Anti Trust” action (on behalf of smaller producers against the “big business” operators such as Standard Oil) was not justified – indeed it was harmful.
As for Dr Krugman’s specific attack on Amazon – no it does not favour conservative books, Would an enterprise owned by the man who owns the “Washington Post” and has given millions of Dollars to liberal-left causes such as “Gay Marriage” really be likely be to favour conservative books?
As for Bill Gates and so on – they (unlike the owner of Amazon) even favour higher “Progressive” taxes upon themselves and support the Death Tax. I would have thought that Kevin would have some kind words for Mr Gates because of this – but no…….
There does seem to be a big difference between men such as Mr Gates and men such as the late Mr Rockefeller (the man who created Standard Oil – saving the whales in the process). Customers loved Mr Rockefeller (even if his competitors hated him), customers of Microsoft do not tend to love Microsoft. Its products do not have the reputation for quality and low prices that Standard Oil had (or that J.J. Hill’s Great Northern Railroad, another victim of “Anti Trust”, had).
The story of “anti trust” and “competition policy” generally has been a grim one – but NOT in the way that lying socialist historians pretend. The real grim story has been attacks on American (and British) companies that have done good (not harm) such as the major American aluminium company and the American company that used to make shoe making equipment.
But history where “big business” (and the customers of “big business”) are the VICTIMS is not the sort of history the left want to look at.
They prefer to look at pets-of-the-government such as Mr Buffett.
And yes, I suspect that it is true that Mr Buffett tries to use his political influence to get subsidies for wind farms, and to block the Keystone pipeline – which would be competition for the trains he owns (odd that Kevin did not mention the blocking of the Keystone pipeline) – but these things would, most likely, happen anyway (“Green” ideology is strong – a massive leftist movement).
What people like Warren Buffett do is to observe the intellectual fashions of their time (they do NOT create these leftist fashions) and then say to themselves “how can I profit from this?”
For example Mr Buffett did not create bailout ideology – that was started by Walter Bagehot (third editor of the Economist magazine) and pushed to its extreme by Lord Keynes, but he did take advantage of it.
For example, Mr Buffett understood that AIG would never be allowed to go bankrupt (according to Keynesian ideology, fully supported by Dr Krugman, allowing the financial system to go bust, really bust, is the ultimate horror) so he (W.B.) knew that he could buy shares In Goldman Sachs (which everyone else was running away from – as it was owed vast sums of money by AIG), because the government would never allow AIG to go bankrupt (and default on its debts to Goldman Sachs).
There was no “Jewish capitalist conspiracy” at work here (as internet nutcases believe) – Goldman Sachs has a Jewish name, but Mr Buffett is NOT Jewish (nor was Lord Keynes).
[Of course Mr George Soros (a massive backer of the left) is Jewish – but he is actually rather anti-Semitic (like other funders of the Tides Foundation he is always trying to kill-the-Jew-in-himself – and if he can not manage that, then getting rid of other Jews will have to do…….]
It is the same with the blocking of the Keystone Pipeline – it is green leftist ideology that is the real enemy (Mr Buffett is simply the man who profits from it, he did NOT create the power of this leftist movement – although, no doubt, he helps it when he can).
As for Amazon…..
It has recently announced a big LOSS (and its share price has tanked) – so much for its “market power”.
I am reminded of Sean Gabb’s old attacks on Tesco supermarket chain (it tended to be Tesco that he attacked – not the gentile owned supermarket chains, the modern version of the Department Stores that the National Socialist German Workers Party used to attack in the 1920s and 1930s), he has gone rather quite since the DECLINE of Tesco. So much for “market power” and the “control of big business robber barons” over customers.
By the way I hope I do not have to point out to anyone here that Rockefeller is not a Jewish name (contrary to Nazi propaganda) – and that John R. was a Baptist. David R. picked up bad ideas in university – but John R. was O.K.
Very well said, Paul. And in particular, I think your comment about the inner Soros is the best I’ve seen. Trying to kill-the-Jew-in-himself: that makes a lot of sense, much more so than all the “self-hating” this-and-that that we see bandied about, regarding all sorts of people and movements. It gets at what it IS that the self “hates”: from which it wishes to disassociate itself.
I think the same could be said of Marx. (Along with, of course, the thrill of being an iconoclast.)
I want to point out an actual quote, direct from the horse’s mouth, on the very same page:
–Kevin Carson, in the column above.
Just thought I’d mention it….
Julie,
All anarchists (and all libertarians, but I nearly repeat myself) hate large corporations, both viscerally and thinkingly.
Corporations are, always have been and are by definition creatures of the state, not of the market.
You can have free markets or you can have government-established, government-privileged economic actors. You can’t have both.
For everyone’s amusement, I just saw this on Kevin’s Twitter feed:
“Kevin Cthulson Ⓐ @KevinCarson1 · 3h 3 hours ago
Apparently Shawn Wilbur said C4SS is “shilling” for Amazon because my books are under Amazon’s POD imprint, & it’s the “last straw” for him.”
It takes a special kind of mind to accuse Carson of being a capitalist stooge.
I’m under the impression that Mr. Wilbur has drawn a number of “last straws” with C4SS. This is certainly a rather odd one, though.
That is funny! LOL
I think SIG just jumped the shark by characterising that scumbag Gates as a benefactor of mankind. Gates is very much a part of the problem.
Well first many thanks to Thomas for admitting that he “hates all large corporations” – so much for the Black Flag “anarchists” being different from the Red Flag Marxists in practical terms.
The idea that corporate enterprise was an invention of the state is FALSE – it ignores both private Law Merchant and Church Law (Canon Law) which dealt with such matters as limited liability agreements and bodies corporate in trade and enterprise, for centuries before the state got involved.
If people want (for example) want to pay high prices to pay Lloyds “names” for unlimited liability insurance that should be up to them – but if people want to do business with insurance companies instead that should also be up to them.
By the way…….
The idea that Black Flag people just “hate” bodies corporate (either non profit or profit making) is false – large enterprises owned by a single individual or family would be “hated” just as much.
The “problem” (to use the word of John Pate) is the ENVY of Black Flaggers – which is the same as the envy of the Red Flaggers (it is the basis of both doctrines).
The essence of both doctrines is the same “you have got more stuff than me and I am going to take it off you” – which is why they cooperate in such things as the “Occupy” movement and the Chicago teachers union.
“But Paul there are also some GOOD anarchists – how can one tell the good from the evil?”
Find out if they “hate all large corporations”. Your words Thomas (many thanks).
If they do “hate all large corporations” then there is no PRATICAL difference between them and the Marxists – i.e. they are foes (not friends) of libertarians.
And, I repeat, the idea that they do not hate individual large scale property owning (just “corporate” owning by churches, charities, clubs, the Huntsman Chemical Company, or whatever….) is false.