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Why is capitalism better than mutualism?

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Freedom4Me73986 Posted: Mon, Jul 11 2011 9:30 PM

I'm sick of mutualists coming on to market anarchist websites to "convert" anarcho-capitalists to mutualism. What are some reasons mutualism would suck and capitalism is the only moral and efficient system?

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Raudsarw replied on Tue, Jul 12 2011 5:00 AM

What kind of sites? I don't think I've ever met a mutualist online before.

 

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I mainly do not like mutualism because they hold on to the labor theory of value...

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It's all semantics.
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Bogart replied on Tue, Jul 12 2011 12:13 PM

Wikipedia has this definition:

Mutualism is an anarchist school of thought that originates in the writings of Pierre-Joseph Proudhon, who envisioned a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market.[1

So if you believe in the Labor Theory of Value, which I do not, then you would believe in this Mutualist concept.  I think that the Labor Theory of Value is just crap that Karl Marx made up to prove parts of his theories that he knew are just wrong.

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Hankster replied on Tue, Jul 12 2011 1:14 PM
Bogart:
... I think that the Labor Theory of Value is just crap that Karl Marx made up to prove parts of his theories that he knew are just wrong.
I think it would be more accurate to state: Karl Marx's theories are just crap he made up around the LTV which he knew was wrong.
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Eugene replied on Tue, Jul 12 2011 1:35 PM
How is mutualism connected to labor theory of value?
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Phaedros replied on Tue, Jul 12 2011 1:38 PM

Perhaps it's this:

Under capitalism you can have pockets of mutualism, but under mutualism you cannot have capitalism.

Tumblr The welfare of the people in particular has always been the alibi of tyrants. ~Albert Camus
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I dont think it is accurate to state that Marx made up the LVT... this was a theory that most classical economists held on to before the marginalist revolution.

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what do you mean how are they connected? that is what they believe in...

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I  just wrote a post about this on my blog:

 

http://www.fromancapwithlove.com/freedom/critique-of-mutualist-labor-and-organizational-theory/#comments

It mainly says that mutualist banks cannot create a coherent monetary system because of their "subjective disutility of labor theory" (as far as I've been able to grasp), that entrepeneurs play a central role in the economy that collectives of workers cannot provide--market foresight, risk taking, seriously deferred consumption (lots of people have pretty high time preferences so an economy of groups trying to start businesses will probably shorten the production process, which generally is not a good thing), and collective ownership of things, including capital goods, is messy and transgressive. 

They also don't believe in absentee ownership of land.  There's a really good paper by Roderick Long about why their theories regarding only occupancy/use rights is against self-ownership. The main gist of that is that is that if property rights are only acquired by homesteading (which the mutualists believe) then there is no way that people have a "common right" in land. Block also wrote some critique of mutualism which I haven't read.

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Kevin Carson who is a big writer in mutualist theory thinks capitalists should be able to exist, but I don't know about the rest of them.

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Eugene replied on Tue, Jul 12 2011 2:48 PM
I thought mutualism is when you can own something only for the period in which you actively use it. What this has to do with LTV?
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Occupancy/use property rights are one part of mutualist theory. Because of these beliefs, they don't believe in capitalists because they're "absentee owners." They give an economic justification for why capitalists are bad, which is that they are stealing the surplus value of laborers, which only works under the LTV. 

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magnetic replied on Tue, Jul 12 2011 8:45 PM

Occupancy/use property rights are one part of mutualist theory. Because of these beliefs, they don't believe in capitalists because they're "absentee owners." They give an economic justification for why capitalists are bad, which is that they are stealing the surplus value of laborers, which only works under the LTV.

But a free market is one in which disputes are settled through arbitration between parties in conflict, not through recourse to political means (state courts). If an "absentee owner" can resolve property disputes through free market arbitration and maintain claims of ownership, then the free market shows the Mutualist interpretation to be incorrect.

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If you don't know the answer, it isn't or never was.  Besides all that you were essentially preaching anarcho primitivism on one of your earlier threads and calling it "capitalism"

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Amelia,

Your post is actually quite good. Although I don't know much about the economics of mutual banking, so I can't really address those concerns, your posts on entreprenuers and collective ownership are things I think I can speak to.

Everything entreprenuers do in your posts would still most likely occur in a Mutualist society: creativity, foresight, etc. I guess I simply don't see where you draw the conclusion that Mutualism as it has been laid out discourages those things.

On collective ownership you said: "In collective ownership, you have different self-interested actors all laying claim on the same good. Not as in joint ownership, where the lines of how much you own and what control you can exercise is clearly delineated; but instead that all actors own 100% of the same property...In workers collectives, this problem is solved in one of two ways. One is through direct democracy, which is always and everywhere the tyranny of the majority."

I don't see how this is truly different from joint ownership. While one person may control 60% of a firm and another 40%, I don't see how joint ownership is immune to the problem presented by direct democracy in instances where all parties hold a minority share. Imagine a firm in which each worker owns the same percentage, how does this escape the problem you have presented? The problem as I see it extends beyond simply collective ownership, but working in with people in general on a joint project.

Anyway, I'd like to hear more of your thoughts on that.

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Imagine a firm in which each worker owns the same percentage, how does this escape the problem you have presented?

Obviously, I cannot speak for Amelia, but my take is that in joint ownership case each worker is free to exchange his share with any willing party. In collective case, he either likes it or leaves (familiar, isn't it?).

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" each worker is free to exchange his share with any willing party."

This is true of corporate ownership or a company in which the workers are shareholders, which isn't joint ownership but yes, that does have a benefit to it that I don't see in collective ownership.

Thanks, BP.

I wouldn't necessarily advocate for joint ownership because I think you do run into one of the same problems, namely, an inability to alienate your own property. The distinction that I do see is clear lines of who has the right to do what with what. If two people buy a house, 50%/50% they mark out the lines of who can do what with it. Both parties can be in all parts of the house. Person 1 can make any changes to the property while they live on it; Person 2 can decide when to sell; and the proceeds are split down the middle. In this situation, neither of parties interfere on the others rights in the property, because they have agreed to what exact rights they have in regards to it. If in collective ownership, we all have 100% rights then it would seem that nobody has the right to sell goods or do anything unless all members agree.

As far as the entrepeneur goes, it seems unlikely to me that a group of people or a person birthing an idea can then get other people to collectively take the loan out with them in order to start a process which is highly risky and could take a long time for it to pay off. One thing, which isn't praxeological in any case, it is that the majority of people have loss aversion much higher than an ability to take risks to make a gain. People become wage earners not only because they do not have the necessary capital to start their own businesses but because of the relative safety and pay-stability of being employed. As far as people investing in the co-op to begin with, they aren't promised any particular goods which I think makes it an even higher risk than for entrepeneurs who can sell off any non-specific capital goods to recoup losses.

I also do not quite understand how the monetary system would work, which makes the idea of somebody trying to fill market gaps hard to grasp.

But I certainly don't think creativity would die in even the worst of circumstances.   

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"As far as the entrepeneur goes, it seems unlikely to me that a group of people or a person birthing an idea can then get other people to collectively take the loan out with them in order to start a process which is highly risky and could take a long time for it to pay off."

The "pay off" that most entreprenuers wait for is profit. However, wages are still paid during the years in which a business is not profitable. This means that a business will actually have a chance of being more successful since each individual is still getting something for their work, instead of the alternative, unemployment. Collectively run firms are able to function without profit.

"The distinction that I do see is clear lines of who has the right to do what with what."

I suppose I don't see how this couldn't be done in a collective situation either. You have raised a good question, though, about whether collective ownership means 100% ownership for all or simply a splitting of the percentage equally. I have never actually seen it put in these terms, and I don't know.

"If in collective ownership, we all have 100% rights then it would seem that nobody has the right to sell goods or do anything unless all members agree."

Funnily enough, I was just rereading a part of An Anarchist FAQ that addresses this concern:

"To use an appropriate example, public libraries are open to all local residents and they are free to borrow books from the stock available. When the book is borrowed, others cannot come along and take the books from a person's home. Similarly, an individual in a communist society can take what they like from the common stocks and use it as they see fit. They do not need permission from others to do so, just as people freely go to public parks without requiring a vote by the local community on whether to allow access or not. Communism, in other words, does not imply community control of personal consumption nor the denial of individuals to appropriate and use the common stock of available goods. Socialised consumption does not mean "society" telling people what to consume but rather ensuring that all individuals have free access to the goods produced by all."

Given, this particular passage is about anarcho-communism, but I think it illustrates a point I would have made about Mutualism better than I could have. In a workplace used by more than one individual, you may do as you wish, but it's just ignorant not to consider that others may be affected by what you do. So you meet beforehand as a precaution, but not as a requirement.

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If we're going to say that capitalist entrepreneurs are necessary to take on risk, then why not say the state is necessary to take on risk? If workers prefer the security of wage labor, then why wouldn't businesses prefer the security of living under a state that can bail them out, protect their property, etc.?

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The state only "takes on risk" as much as it spreads it around.

I'd prefer the extortion of my fellow citizens to get some start-up capital for my business. Where does that leave me?

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Mutualism, unlike anarcho-capitalism is not strictly voluntary, because it places restrictions on how people Mutualism, unlike anarcho-capitalism is not strictly voluntary, because it places restrictions on how people can willfully organize themselves. Businesses should be able to choose to be businesses and consumers should be able to choose to be consumers. With out a division of labor society can never move forward. 

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Fool on the Hill:

If we're going to say that capitalist entrepreneurs are necessary to take on risk, then why not say the state is necessary to take on risk? If workers prefer the security of wage labor, then why wouldn't businesses prefer the security of living under a state that can bail them out, protect their property, etc.?

 

 

Two words: Capital Theory

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Neodoxy replied on Sat, Jul 23 2011 5:03 PM

The simple answer is that if one combined mutualism and anarcho-capitalism one would have an optimal system, however, with this being said mutualism puts far more restraints upon action and most importantly the profit and loss calculation mechanism of the market system. It is more chaotic and less tuned into actual demand.

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The only thing that I know about mutualism is the occupancy ownership deal.  Obviously it would change incentives.  But, it seems to at least qualify as a solution to conflict.  I haven't seen a specific argument to that.

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The state only "takes on risk" as much as it spreads it around.

I'd prefer the extortion of my fellow citizens to get some start-up capital for my business. Where does that leave me?

The state funds a lot of R&D. Isn't this the role of an entrepreneur? And when a business fails, it's usually the employees that suffer the most. So capitalist entrepreneurs spread around risk just as well.

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And when a business fails, it's usually the employees that suffer the most.

They suffer mainly from the stupid expectation that a hire position is forever and that all choices of career are equal.  That is part of the pathological mentality of the rat racer.

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The state funds a lot of R&D. Isn't this the role of an entrepreneur?

The entrepreneur can calculate. The state "funds" R&D only to the extent that it extorts these funds from its citizens. 

 

And when a business fails, it's usually the employees that suffer the most. So capitalist entrepreneurs spread around risk just as well.

What? The risk is taken on (voluntarily) by the employees. But when a business is guaranteed a bailout by the state, the specific risk of starting the business is being spread from those who voluntarily took on the risk to those who didn't.

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They suffer mainly from the stupid expectation that a hire position is forever and that all choices of career are equal.  That is part of the pathological mentality of the rat racer.

Huh? I don't think my job is forever, but that doesn't mean I won't suffer if my company goes under.

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The entrepreneur can calculate. The state "funds" R&D only to the extent that it extorts these funds from its citizens.

A business "funds" R&D only to the extent that it extorts work from its employees.

What? The risk is taken on (voluntarily) by the employees. But when a business is guaranteed a bailout by the state, the specific risk of starting the business is being spread from those who voluntarily took on the risk to those who didn't.

I don't voluntarily consent to the decisions my company makes anymore than I do the decisions my government makes.

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You're a fool idiot , but if I must:

A business doesn't "extort" its workers; the business and worker (presumably) have a mutual employment agreement. It's a voluntary relationship.

Whether you aknowledge it or not, you're taking on the risk of the business failing (and therefore, of losing your job) when you agree to be employed by it. This is very different than being liable for the failure of a company which you have no contractual relation to.

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I agreed to move to the city I currently live in. Does that mean the city taxes I pay aren't extortion?

Oh, and I prefer fool.

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The "city", certain individuals wearing funny uniforms, are not the rightful owners of the city are they now? So yes, those taxes are extortion.

 

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Then the people wearing funny suits aren't the rightful owners of my company either.

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@Fool on the Hill:

You're welcome.

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"The risk is taken on (voluntarily) by the employees."

Wait a minute, wait a fuckin minute. So now capitalists aren't even the risk takers? So people work for wages and take on all the risks? Capitalists are looking more useless every day.

"But when a business is guaranteed a bailout by the state, the specific risk of starting the business is being spread from those who voluntarily took on the risk to those who didn't."

And the capitalists aren't included in those who took on the risk? They are the ones getting bailed out. They are the ones who get their investment returned either way. And they really don't seem to mind. Nor do the seem to share that guarantee with their employees.

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Wait a minute, wait a fuckin minute. So now capitalists aren't even the risk takers? So people work for wages and take on all the risks? Capitalists are looking more useless every day.

Take on "all the risk"? I don't think I said that, and I surely didn't mean to if I did. Employees take on risk, but they are risks different from that of the capitalist, and I think most would say they take on an inferor risk (but this might be subjective).

I think the Misesian distinction is that the wage-earner doesn't risk capital, and gets paid in relatively more predictable terms ("x" amount a week, for instance), but I'm not sure. I remember something about capitalists foregoing immediate income as well, but once again, I could be mistaken.

And the capitalists aren't included in those who took on the risk? They are the ones getting bailed out. They are the ones who get their investment returned either way. And they really don't seem to mind. Nor do the seem to share that guarantee with their employees.

Huh? The risk taken on by the capitalist is spread among the taxpayer in the situation described (guaranteed government bailout).

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