Is Free Market Capitalism an Oxymoron?

Kevin Carson‘s piece over at C4SS, “Free Market Capitalism is an Oxymoron,” offers a brief history of governments’ intervention in the formation of markets, which has led to the evolution of a modern form of capitalism more synonymous with feudalism than with free markets.  Carson argues that, were markets truly free to develop based on voluntary arrangements, the “foundations of corporate power” in our current mess of a system would have never been formed.  While the argument is valid, it is not by any means sound.  The distinction here is important for any proponent of a truly free society.

The matter of whether or not “free market capitalism” should be considered an oxymoron or not should be addressed outright.  Capitalism is simply an economic system which employs “capital” as a means of exchange.  The nature of said capital may be as broad or as limited as a society may imagine or a government may constrain, respectively.  Whereas the words, “capitalist” and “capital” carry with them sundry negative connotations, those who subscribe to the connotations implied by our sick history may as well give in completely to the statists, allowing them free reign in the realm of defining terms.  We are voluntaryists.  Language is our only medium in this debate; how will we ever win in the arena of ideas while letting the statists define the terms?  This may simply be a matter of semantics; the meaning of words does tend to change with time as certain connotations are attached to them in accordance with historical fact.  That said, there are two senses from which “free market capitalism” may be perceived.

In one sense, “free market capitalism” may be viewed as a system in which individuals make voluntary arrangements involving the exchange of capital.  This sense of the phrase embodies every imaginable transaction; probably some that are unimaginable in a world so dominated by state intervention in otherwise free markets.

In another sense, “free market capitalism” may be viewed (as I believe Carson does) as a phrase combining words interpreted via historical realities and implications.  In other words, “free market” implies voluntary arrangements, whereas “capitalism” has become (rightly so)  known as a system in which business and coercive state forces collude to serve whatever arbitrary interests may be lobbied for by the businesses or championed for reasons of power by the politicians.  Viewed from this perspective, “free market capitalism” is indeed an oxymoron.

These two views are essentially irrelevant to any discussion among those who are seriously interested in the elimination of the state apparatus and subsequent formation of voluntary societies independent of central control.  The aforementioned fact remains; capitalism is a system by which capital is utilized as a means of exchange.  Free market capitalism is a pure phrase; it refers to a system that might be established voluntarily and underpinned by virtually any form of capital.  That capital could be gold, silver, cigarettes, or dirt.  There are reasons why various forms of capital are deemed more valuable than others, though it is enough for the sake of this piece to mention that truth in passing.

Insomuch as the exchange of capital is concerned, it is notable that neither anarcho-communists nor any of their ilk can be deemed true anarchists so long anarchism is understood to imply voluntary arrangements outside of intervention by some collective body.

Wendy McElroy reduced the issue to a difference between the advocation of voluntary means and the advocation of “voluntary ends.” In a speech, she said,

Communist anarchism contains the notion of economic coercion; that is, even if a worker consents to a certain wage, consents to have a portion of his labor stolen by the capitalist, the consent doesn’t count because it was obtained through duress. The economic situation created by the capitalist is the equivalent of a gun pointed at the head of the worker: the capitalist says: work on my terms or starve.

Returning to the point of free market capitalism as an achievable reality rather than an oxymoron, it is a logical contention that even the stupidest and most unfortunate of voluntary decisions are, indeed, voluntary.  Defiance of the “capitalists” referred to in McElroy’s speech is based within a system of state coercion.  To the anarchist, views on the “capitalist” stealing from the “worker” must be abandoned completely.  As evidenced by Carson’s piece, capitalism is a concept defined by a sorry history of thinly veiled attempts of governments to allow their populations the right to interact freely.  Similarly, “worker” is a term only understood by most as a delegation of class; i.e., there are “workers” and there are “capitalists.”

To advocate the elimination of the state as an institutionalized means of force, then later to demand that “voluntary” associations meet certain criteria (e.g., no interest on loans or labor theory of value) is not voluntaryism at all.  The anarchist does not suppose to know what intricacies a voluntary society may bring about; only that no man may lay claim to another’s life.  We’ll discuss the details of “another’s life” later.

For now, it is enough to know that “free market capitalism” is not an oxymoron.  It may reasonably seem so to those who rightly observe that there has never been such a thing.  In response to their argument, I would say that there has never been such a thing as a voluntary society either.  We seek these things, hopefully absent the blinders put on us by our poor historical record.

 

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13 Responses to Is Free Market Capitalism an Oxymoron?

  1. David Z May 3, 2011 at 12:10 pm #

    Hey Bill – I’d self-describe as a left-libertarian market anarchist possibly leaning towards the mutualist side who does believe in some right to own ‘capital’ and the evil “means of production”. But I have to disagree with your re-definition of the term ‘capitalism’ (simply an economic system which employs “capital” as a means of exchange). I believe this definition is revisionist, and it does not serve our cause to get mired in these semantic arguments. The fact of the matter is that that the term capitalism was coined by the socialists, often used as a pejorative, and it has historically described a system of state-granted privilege.

    You highlight two competing definitions of the term, and make a compelling argument were it not for the fact that the first case (a system in which individuals make voluntary arrangements involving the exchange of capital) has never been widely accepted, and 99 out of 100 people would not give you even an approximation of this elegant definition. Further, it’s silly to put emphasis on “capital” in “free market capitalism” when a truly free market is a “system in which individuals make voluntary arrangements involving the exchange of goods and services (i.e., not limited to “capital” but also to include non-capital goods, labor, land, etc.).

    Yes, “free market capitalism” is an oxymoron on the same level of cognitive dissonance with “round cubes”. If it’s a free market, it’s not capitalism. And if it’s capitalism, it’s not a free market.

    • Valerie Rumer May 3, 2011 at 1:00 pm #

      David,

      I fail to see how “free market capitalism” is similar to “round cubes” .

      cap·i·tal·ism

      –noun
      an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.

      free market

      –noun
      an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies

      I’m sure definitions of “round” and “cubes” are not necessary.

      • David Z May 3, 2011 at 2:52 pm #

        Valerie, I wrote a full response on my site today, you’ll be happy to know that I dropped the reference to “round cubes” which was originally intended as hyperbole, to indicate the absurdity of the proposition that “free markets” and “capitalism” are synonymous. Cheers.

        • David S May 4, 2011 at 12:54 am #

          Z –
          Just got reading your article, and i see where you are coming from. Your argument is based more not on fact but rather how people perceive the facts. The problem is that by doing so and thus labeling it as false based on the perception vs the facts, you not only add to the confusion (after all, if perception is all that matters, then whats the point of facts?), but you muddle up a bunch of other things as well.

          For an example, in your article you state “Unfortunately, this definition of the term has never been widely accepted, and to this day 99 out of 100 people would probably not even come close to approximating this elegant definition.” – So this makes it ok to continue twisting facts in the name of progress? If this is the case, then people are always doomed.

          In another case, you say “in order to have any meaningful, relevant definition, words must be “interpreted via historical realities and implications” regardless of whether we like them. Whereas the former definition sloppily suggests that the properties of “free markets” dominate the term and carelessly ignores the historical and popularly understood definitions of “capitalism”, the latter definition is much more precise in defining both terms separately.” — So words in fact lose their meaning when ignorant people call a ’round’ a square? All hail the village idiot. The truth is that your argument ignore one simple fact – that no matter what word is used to describe it – the ideal of capitalism will always be undermined by the idea of socialism (as its polar opposite) – as socialism appeals to the lowest common denominator leaving no room for anything more meaningful then a mediocre means of life. Anyway the point is that the word can be made irrelevant, yet even the meaning has been twisted and into nonexistance by your standards.

          Thus we do not agree. Muddling a thought, idea, or even a word to fit perception will not educate nor help anyone.

        • David Shirk May 4, 2011 at 1:15 am #

          Z- but i digress. You opened with “The word “capitalism” was coined by the socialists, often used as a pejorative, and has historically described a system of state-granted privilege and plutocracy. ”

          I can understand this – so you are saying that the word defined as ‘capitalism’ was a socialist take on the opposite ideological mindset? If this is the case, then they created a word and assigned a misleading and outright wrong definition to it. If this is the case then i can see what the point is that you are trying to make – if the opposing idea assigned the term and then the definition then I can see your argument about terminology is valid. However the way socialism explains the opposing idea under the defined word capitalism leaves out the many of the facts. If it is true that socialism invented the word and the definition, that it can be viewed as thus. However when the opposite idea (in this case capitalism) seeks to inject addtional and highly relevant facts to explain the set idea thus adding clarity, it is not in fact bastardizing anything as it is setting the record straight.

      • David S May 4, 2011 at 12:40 am #

        Z – the point is that capital is essential to a free market – with out it a free market may not exist. The reason the author used the definitions he did was to get the point across that people these days do not know what capital is, only what its common perception is in a widely socialist/fascist society. You are case and point.

        • valerie rumer May 4, 2011 at 8:31 am #

          THIS is exactly what I was going to say. Spot on, David S.

          David Z.

          And yes, I did see your “rebuttal article” as it was showing in our dashboard. I did take a look at it, I didn’t really feel there was anything in it worthy of being addressed. Operating under misconception is a rampant problem in this country, teaching people false word meanings is going to serve to worsen rather than better everything. There seems to be a shortage of thought in America, also a shortage of knowledge of truth. I want people to find truths and think each for his or her self, do you? Supplying those who want to understand with false facts and opinions with a spiin will not cut it.

  2. rks May 4, 2011 at 5:31 pm #

    I like the stanbdards but ecumenical-try and see approach of the Libertarian International Organization at http://www.Libertarian-International.org

    I think a lot of the criticisms miss the point that Libertarianism is about being OUTSIDE all these debates rooted in e.g. recent European assumptions and culture.

  3. Bill Wurst May 6, 2011 at 7:55 pm #

    Hey all,

    Thanks for your thoughts on the piece; at least everyone is attempting to think critically about the issue. I said what I wished to say in the article, but will add one thing here.

    That is, “free market capitalism” is a very simple concept; the term is an end in itself. Because no perfect capitalist system has existed does not detract from the meaning of the term. Free market capitalism is a descriptor, just like stupid communist or brown banana. Whether or not there has ever been a stupid communist or a brown banana is irrelevant. The terms mean what they mean. The same is true of “free market capitalism.” In my experience, those who claim to be voluntaryists but adamantly distance themselves from capitalism do want a voluntary society– so long as it is developed in accordance with their particular preferences.

  4. g September 19, 2014 at 12:23 am #

    it’s nice that you want to create your own definitions, but capitalism is what it is and what it always has been, a product of the state.
    capital has never been recognized as valid by free people, just as interest and rent on vacant land require force to have any influence on how people choose to provide for themselves.
    of course, you can have your little private game if the force of the state is ever removed, no fair minded anarchist would mind, but you would soon find that no one wants to play.

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