Everything Is Just Dandy!

Kevin Carson – Carson’s Rejoinders

The Anarchist Library

Author: Kevin Carson
Title: Carson’s Rejoinders
Date: 2006
Notes: A series of responses to right-libertarian reviews of Studies in Mutualist Political Economy. Published in the Journal of Libertarian Studies, Volume 20, No. 1 (Winter 2006): 97–136
Source: Retrieved 07/19/2022 from c4ss.org

1. “Rejoinder” to Murray Rothbard

This is not, properly speaking, a rejoinder — obviously, since Rothbard’s article predates my book. But since it was chosen to set the tone for this symposium issue, and includes some comments on individualist anarchism in general, I’ll make a few remarks anyway.

On the land issue, I reserve comment, since that is also the focus of Roderick Long’s review. I merely observe that characterizing the Ingalls-Tucker doctrine as a limit on the landlord’s right to dispose of his “justly-acquired private property” begs the question of just how property is justly acquired.

On money and banking issues, Rothbard made the mistake of interpreting the Greene-Tucker system of mutual banking as an attempt at inflationary expansion of the money supply. Although the Greene-Tucker doctrine is often casually lumped together (in a broader category of “money cranks”) with social crediters, bimetallists, etc., it is actually quite different. Greene and Tucker did not propose inflating the money supply, but rather eliminating the monopoly price of credit made possible by the state’s entry barriers: licensing of banks, and large capitalization requirements for institutions engaged in providing only secured loans. Most libertarians are familiar with such criticisms of professional licensing as a way of ensuring monopoly income for the providers of medical, legal and other services. Licensing and capitalization requirements, likewise, enable providers of credit to charge a monopoly price for their services.

In fact, Rothbard himself made a similar analysis of the life insurance industry, in which state reserve requirements served as market entry barriers and thus inflated the cost of insurance far above the levels necessary for purely actuarial requirements (Rothbard 1977, p. 59).

And Böhm-Bawerk’s originary rate of interest was by no means a complete answer to Greene and Tucker. Aside from the monopoly premium made possible by the state’s banking laws, over and above the originary rate of interest, Böhm-Bawerk himself admitted that time preference might vary in steepness with one’s economic security and independence. Since, as the individualist anarchists argued, the state’s policies render capital artificially inaccessible to labor and increase labor’s dependence on the owners of capital, the time preference of laborers is artificially steep.

2. Rejoinder to Bob Murphy

My favorite part of Murphy’s review is his repeated reminder, at the outset, that “Carson is not a crank.” I may use that as a blurb for the next printing of my book. Recently science fiction writer Ken MacLeod, who had bought a copy of my book not long before, mentioned in his blog that a new collection of articles from Reason was the only libertarian paperback on his shelves whose cover didn’t “holler of crank.” So Murphy’s reassurance is doubly welcome.

The central area of disagreement between us concerns the importance of the “exceptions” to the cost theory of value. We have, it seems to me, a largely semantic disagreement on whether they are “exceptions” or simply secondary deviations from a primary law; and the significance that attaches to them, whether “exceptions” or “deviations,” is mainly a matter of subjective emphasis. Unlike Murphy, I prefer to regard the “exceptions” as second-order scarcity deviations. The validity of the central insight of classical political economy, that price is always tending toward a natural value determined by cost, with secondary fluctuations caused by scarcity rent, is unimpaired. And Marshall’s analogy of ripples on a pond, or of a swinging weight, is still admirably suited to describing real-world phenomena. The cost factor and scarcity rents are of entirely different orders of significance, being (respectively) a fundamental underlying tendency and a secondary disruption of that tendency.

Murphy writes:

a cost theory of (exchange) value entirely neglects the role of subjective valuations in the formation of market prices. Human actors are forward looking, and hence past expenditures and effort are irrelevant to the present determination of the relative merits of two different commodities. Even if all memory of previous expenditures were suddenly lost, market prices would still form.

Entirely neglects!?? I’m flabbergasted. I specifically addressed the issue of sunk costs in chapter one, along with the operation of the law of value through forward-looking behavior. Even Friedrich Engels acknowledged (in his Preface to Marx’s critique of Proudhon, The Poverty of Philosophy) that the market price of already-produced goods informed the producer, ex post facto, of the amount of socially necessary labor embodied in it, and thus influenced his prospective decision of how much to produce in the future.

In present-day capitalist society each individual capitalist produces off his own bat what, how and as much as he likes. The social demand, however, remains an unknown magnitude to him, both in regard to quality, the kind of objects required, and in regard to quantity. … Nevertheless, demand is finally satisfied in way or another, good or bad, and, taken as a whole, production is ultimately geared towards the objects required. How is this evening out of the contradiction effected? By competition. And how does the competition bring about this solution? Simply by depreciating below their labour value those commodities which by their kind or amount are useless for immediate social requirements, and by making the producers feel … that they have produced either absolutely useless articles or ostensibly useful articles in unusable, superfluous quantity.

[C]ontinual deviations of the prices of commodities from their values are the necessary condition in and through which the value of the commodities as such can come into existence. Only through the fluctuations of competition, and consequently of commodity prices, does the law of value of commodity production assert itself and the determination of the value of the commodity by the socially necessary labour time become a reality. (Marx and Engels 1884, pp. 286–87)