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This page was created to further explain the anarchist objections to capitalism and is not meant to fairly present two sides of a debate. A large portion was extracted from the Anarchist FAQ (http://www.geocities.com/CapitolHill/1931/).
Objections to the Idea of Profit
Anarchists point to profit to be the driving motive of capitalists. If a profit cannot be made, a good is not produced, regardless of how many people "subjectively value" it. They point to the origins of profit itself.
In order to make more money, money must be transformed into capital, i.e., workplaces, machinery and other "capital goods." By itself, however, capital (like money) produces nothing. Capital only becomes productive in the labour process when workers use capital.
- "Neither property nor capital produces anything when not fertilised by labour" - Bakunin
Under capitalism, workers not only create sufficient value (i.e. produced commodities) to maintain existing capital and their own existence, they also produce a surplus. This surplus expresses itself as a surplus of goods, i.e. an excess of commodities compared to the number a workers' wages could buy back.
- "The working man cannot. . . repurchase that which he has produced for his master. It is thus with all trades whatsoever. . . since, producing for a master who in one form or another makes a profit, they are obliged to pay more for their own labour than they get for it." Proudhon, What is Property?, p. 189
In other words, the price of all produced goods is greater than the money value represented by the workers' wages (plus raw materials and overheads such as wear and tear on machinery) when those goods were produced. The labour contained in these "surplus-products" is the source of profit, which has to be realised on the market. (In practice, of course, the value represented by these surplus-products is distributed throughout all the commodities produced in the form of profit -- the difference between the cost price and the market price).
Pro-capitalist economics argue against this theory of how a surplus arises. However, one example will suffice here to see why labor is the source of a surplus, rather than (say) "waiting", risk or capital. A good poker-player uses equipment (capital), takes risks, delays gratification, engages in strategic behaviour, tries new tricks (innovates), not to mention cheats, and earns large winnings (and can even do so repeatedly). But no surplus product results from such behaviour; the gambler's winnings are simply redistributions from others with no new production occurring. Thus, risk-taking, abstinence, entrepreneurship, etc. might be necessary for an individual to receive profits but are far from sufficient for them not to be the result a pure redistribution from others (a redistribution which can only occur under capitalism if workers produce goods to sell).
Thus, in order for a profit to be generated within capitalism two things are required. Firstly, a group of workers to work the available capital. Secondly, that they must produce more value than they are paid in wages. If only the first condition is present, all that occurs is that social wealth is redistributed between individuals. With the second condition,
a surplus proper is generated. In both cases, however, workers are exploited for without their labor there would be no goods to facilitate a redistribution of existing wealth nor surplus products.
Surplus Values
The surplus value produced by labour is divided between profits, interest and rent (or, more correctly, between the owners of the various factors of production other than labour). In practice, this surplus is used by the owners of capital for: (a) investment (b) to pay themselves dividends on their stock, if any; (c) to pay for rent and interest payments; and (d) to pay their executives and managers (who are sometimes identical with the
owners themselves) much higher salaries than workers. As the surplus is being divided between different groups of capitalists, this means that there can be clashes of interest between (say) industrial capitalists and finance capitalists. For example, a rise in interest rates can squeeze industrial capitalists by directing more of the surplus from them into
the hands of rentiers. Such a rise could cause business failures and so a slump (indeed, raising interest rates is a key way of regulating working class power by generating unemployment to discipline workers by fear of the sack). The surplus, like the labour used to reproduce existing capital, is embodied in the finished commodity and is realised once it is sold. This means that workers do not receive the full value of their labour, since the
surplus appropriated by owners for investment, etc. represents value added to commodities by workers -- value for which they are not paid.
So capitalist profits (as well as rent and interest payments) are in essence unpaid labour, and hence capitalism is based on exploitation.
- "Products, say economists, are only bought by products. This maxim is property's condemnation. The proprietor producing neither by his own labour nor by his implement, and receiving products in exchange for nothing, is either a parasite or a thief. What is Property?, p. 170
It is this appropriation of wealth from the worker by the owner which differentiates capitalism from the simple commodity production of artisan and peasant economies. All anarchists agreed with Bakunin when he stated that:
- "What is property, what is capital in their present form? For the capitalist and the property owner they mean the power and the right, guaranteed by the State, to live without working. . . [and so] the power and right to live by exploiting the work of someone else . . . those . . . [who are] forced to sell their productive power to the lucky owners of both." The Political Philosophy of Bakunin, p. 180
Capitalist Counterpoint
Obviously supporters of capitalism disagree. Profits are not the product of exploitation and workers, capitalists and landlords get paid the value of their contributions to output, they say. A few even talk about "making money work for you" (as if pieces of paper can actually do any form of work!) while, obviously, human beings have to do the actual work (and usually for
money). However, all agree that capitalism is not exploitative (no matter how exploitative it may look) and present various arguments why capitalists deserve to keep the products others make.
Some apologists for capitalism cite the empirical fact that, in a modern capitalist economy, a large majority of all income goes to "labor," with profit, interest and rent adding up to something under twenty percent of the total. Of course, even if surplus value was less than 20% of a workers' output, this does not change its exploitative nature. These apologists of capitalism do not say that taxation stops being "theft" just because it is around 10% of all income. However, this value for profit, interest and rent is based on a statistical sleight-of-hand, as "worker" is defined as including everyone who has a salary in a company, including managers and CEOs (income to "labor" includes both wages and salaries, in other words). The large incomes which many managers and all CEOs receive would, of course, ensure that a large majority of all income does go to "labour." Thus this "fact" ignores
the role of most managers as de facto capitalists and exploiters of surplus value and ignores the changes in industry that have occurred in the last 50 years.
Nonlinear Dynamics Analysis
Manuel De Landa observes in 1000 Years of Nonlinear History that market systems act like an abstract machine whereas the natural process is for relatively flat meshworks of producer-consumers to transform into hierarchies over time; hierarchies of meshworks as well as meshworks of hierarchies. These monopolistic hierarchies are not necessarily large enterprises (corporations), but can be taken to mean dominant cities in the world economic scale, such as Venice in the 14th century, wherein rich merchants enjoyed enormous economic advantage over rivals in other cities. [1] (http://www.t0.or.at/delanda/a-market.htm)
Fernand Braudel alleges that since capitalism's roots in 13th-century Italy, it has always been monopolistic and oligopolistic. Capitalism has always been associated with large enterprises, with respect to their operational markets. It is thus that Delanda labels capitalism as actually being "antimarket", rather than a market-driving force as most people believe.
From this anarchists conclude that capitalism gives rise to undesirable social relations; the subjugation of geographically disadvantaged populations, class inequities within populations, and general microeconomic instability. Capitalism being an antimarket force sets agendas dictated by large enterprises and the wealthy, and being such a hierarchical system (top-down), is unviable.
Private property
There is some debate about the question of private property and economic organization, with most claiming that the existence of property results in wage slavery, while anarcho-capitalists assert that self-ownership is impossible without property.
The anarcho-socialist perspective
Anarcho-socialists argue that private property is a fiction enforced by illegitimate institutions which do not account for the needs and desires of the individuals they affect, and that beyond "personal possession" of immediate goods, the idea of property is only maintained by institutions which enforce property laws. When a business hierarchy enforces these rules, it is no different than a government enforcing such rules.
They propose that beyond personal possession, resources should be collectively managed, particularly capital goods used as means of economic production. The form of this collective management can vary greatly, but in all cases those affected by economic decisions have some representation in them. On one end of the spectrum lie the syndicalists, who propose a planned economy based on a series of collectives that rely fundamentally on consensus and free association. On the other end are the individualists, who advocate a free market without the constraints of usury, wage, and rent. They believe that property beyond personal possession should be handled by mutualist banks which print their own money and loan it free of interest.
more topics need to be filled in - this article is incomplete
Wage labor
Like private property, the concept of wage labor is hotly debated within anarchist circles.
Most anarchists believe that the employer-employee relationship is based on employer coercion. They argue that the oppressive restrictions of public and private property, upheld variously by states, corporations, and individuals, allow employers to blackmail employees into working for use of resources that they would otherwise have free access to either individually through mutualist banks or collectively through voluntarily associated communes and syndicates. Anarcho-socialists claim that such oppression should be resisted. However, they generally follow Kant in maintaining that freedom can not be given as a privilege by some third party, but must instead be won through the struggles of the oppressed themselves. As such, anarcho-socialists encourage employees to resist and obstruct economics based on hierarchical power and what they consider to be wage slavery. This is known as direct action. Many also believe that anarchists are obliged to aid such groups when they call for help in their struggles. Ultimately, anarcho-socialists believe that all forms of hierarchy must be resisted, because of their coercive nature.
Anarcho-socialists argue that as no ordinary person (as opposed to someone who is independently wealthy) can refuse to work, so there is no freedom involved in the negotiation of a contract with an employer who has the ability to dictate the terms of any contract to dispossessed employees who amount to little more than wage slaves living at the whim of the wealthy.
Anarcho-socialists reject the claim that their objection to capitalist economics is based on the necessity of labor. They almost universally agree that some form of manual labor (which they often distinguish from work) is currently necessary. However, they do not agree that the necessity for manual labor requires that the form of this labor be dictated by privileged individuals who control the wealth and resources of the society. Instead, they argue that individual liberty requires that the laborers themselves control the means and mode of their labor, rather than having their actions dictated by others. Thus, those who are required to labor for survival should have representation in the use and distribution of the resources they interact with and distribute. Anarcho-socialists do not believe that the mere ability to disassociate from a given employer is an adequate form of representation, given that the employers as a class can continue to dictate use of resources and compel others into wage-slavery once the association is disbanded.
Furthermore, anarcho-socialists argue that being a servant with the "freedom" to choose your favorite master does not represent actual "freedom" in any meaningful sense. Often, they also argue that a worker's "freedom" to choose his employer is no different than that same worker's "freedom" to choose what state he lives under (by moving to another country if necessary), so anarcho-capitalism is inconsistent, because there is no real difference between the coercion of private companies and the coercion of the state - and thus it makes no sense to abolish one while preserving the other.
However, there are some anarcho-socialists who are anti-capitalist and pro-free market, such as Benjamin Tucker (who identified his Individualist Anarchism as Anarchistic Socialism) who did not see a problem with wage labor as long as the employers and employees were paid equally for equal hours worked (a similar approach was put into action through Time Store which was organized by Josiah Warren) thus eliminating the economic parasitism of the boss class and therefore being anti-capitalist. Benjamin Tucker described the non-exploitive employer-employee relationship as "the workers natural wage, being their full product."
Monetary systems
Main Article: Anarchist Economics
Within the realm of anarchist labor issues is the issue of the monetary system. While all anarchists are against the current monetary system, there is disagreement as to whether or not there should be a monetary system. Alexander Berkman was an anarchist against the monetary system. In his book What is Anarchism? (http://dwardmac.pitzer.edu/Anarchist_Archives/bright/berkman/comanarchism/whatis_toc.html), Berkman argues that in an anarchist society, money would become unnecessary. Within anarchy, all occupations are viewed as equally beneficial to society. Since the concept of value is different for everyone and cannot be determined, it is argued that it should not be set and one's contribution to society through their occupation entitled them to be a part of it. Within this system, there is a free exchange of goods, without the need for money. Money in its current form is a hierarchical system, the exception being when all people are paid equal salaries. The argument goes further, however, to question the purpose of money if people are paid equally. Certainly those who agree with this would also note that a monetary system would open a vulnerability for some to acquire more of it and create a class system. Not every anarchist, however, is totally against the idea of money. Others see money as simply an index for exchanging goods and that its existence wouldn't necessarily create a class system.
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