Some good quotes on economics and trade from Piotr Kropotkin and Mikhail Bakunin. In case anyone feels the need to remind me, Kropotkin is indeed a communist (of a sort). Nonetheless, he is often superior to our modern day economists.
Kropotkin
On Over-Production, long before it was used to 'explain' the Great Depression
“Take, for instance, over-production, a word which every day re-echoes in our ears. Is there a single economist, academician, or candidate for academical honours, who has not supported arguments proving that economic crises are due to over-production – that at a given moment more cotton, more cloth, more watches are produced that are needed!”
“However, on careful examination all these reasonings prove unsound. In fact, is there one single commodity amongst those in universal use which is produced in greater quantity than need be? Examine one by one all commodities sent out by countries exporting on a large scale, and you will see that nearly all are produced in insufficient quantities for the inhabitants of the countries exporting them.”
“Not only does the ever-growing need of comfort remain unsatisfied, but the strict necessities of life are often wanting. Therefore, ‘surplus production’ does not exist, at least not in the sense given to it by the theorists of Political Economy.”
On the Efficacy of Voluntary Cooperation
"Railways were constructed piece by piece, the pieces were joined together, and the hundred different companies, to whom these pieces belonged, gradually came to an understanding concerning the arrival and departure of their trains, and the running of carriages on their rails, from all countries, without unloading merchandise as it passes from one network to another. All this was done by free agreement, by exchange of letters and proposals, and by congresses at which delegates met to discuss well specified special points, and to come to an agreement about them, but not to make laws. After the congress was over, the delegates returned to their respective companies, not with a law, but with the draft of a contract to be accepted or rejected."
"And the most interesting thing in this organization is, that there is no European Central Government of Railways! Nothing! No minister of railways, no dictator, not even a continental parliament, not even a directing committee! Everything is done by free agreement."
On Patents
“Like all State controls, patents hamper the progress of industry. Thought being incapable of being patented, patents are a crying injustice in theory, and in practice they result in one of the great obstacles to the rapid development of invention.”
Reputation and Confidence
“Should you speak to a man who understands commerce, he will tell you that everyday business transacted by merchants would be absolutely impossible were it not based on mutual confidence.”
Customs Duties
“Capital taking no cognizance of fatherlands, German and English capitalists, accompanied by engineers and foremen of their own nationalities, have introduced in Russia and in Poland manufactories whose goods compete in excellence with the best from England. If customs were abolished tomorrow, manufacture would only gain by it.”
Automation (Applies to Capital in General)
“Whenever a saving of human labour can be obtained by means of a machine, the machine is welcome and will be resorted to; and there is hardly one single branch of industry into which machinery work could not be introduced with great advantage, at least at some of the stages of the manufacture. In the present chaotic state of industry, nails and cheap pen-knives can be made by hand, and plain-cottons by woven in the hand-loom; but such an anomaly will not last. The machine will supersede hand-work in the manufacture of plain goods. But at the same time, hand-work very probably will extend its domain in the artistic finishing of many things which are now made entirely in the factory; and it will always remain an important factor in the growth of thousands of young and new trades.”
Bakunin
Bakunin on Government by Experts
Suppose a learned academy, composed of the most illustrious representatives of science; suppose this academy charged with legislation for and the organisation of society, and that, inspired only by the purest love of truth, it frames none but the laws in absolute harmony with the latest discoveries of science. Well, I maintain, for my part, that such legislation and such organisation would be a monstrosity, and that for two reasons: first, that human science is always and necessarily imperfect, and that, comparing what it has discovered with what remains to be discovered, we may say that it is still in its cradle. So that were we to try to force the practical life of men, collective as well as individual, into strict and exclusive conformity with the latest data of science, we should condemn society as well as individuals to suffer martyrdom on a bed of Procrustes, which would soon end by dislocating and stifling them, life ever remaining an infinitely greater thing than science.
The second reason is this: a society which should obey legislation emanating from a scientific academy, not because it understood itself the rational character of this legislation (in which case the existence of the academy would become useless), but because this legislation, emanating from the academy, was imposed in the name of a science which it venerated without comprehending - such a society would be a society, not of men, but of brutes. It would be a second edition of those missions in Paraguay which submitted so long to the government of the Jesuits. It would surely and rapidly descend to the lowest stage of idiocy.
But there is still a third reason which would render such a government impossible - namely that a scientific academy invested with a sovereignty, so to speak, absolute, even if it were composed of the most illustrious men, would infallibly and soon end in its own moral and intellectual corruption. Even today, with the few privileges allowed them, such is the history of all academies. The greatest scientific genius, from the moment that he becomes an academician, an officially licenced savant, inevitably lapses into sluggishness. He loses his spontaneity, his revolutionary hardihood, and that troublesome and savage energy characteristic of the grandest geniuses, ever called to destroy old tottering worlds and lay the foundations of new. He undoubtedly gains in politeness, in utilitarian and practical wisdom, what he loses in power of thought. In a word, he becomes corrupted.
Bakunin on Authority
Does it follow that I reject all authority? Far from me such a thought. In the matter of boots, I refer to the authority of the bootmaker; concerning houses, canals, or railroads, I consult that of the architect or the engineer. For such or such special knowledge I apply to such or such a savant. But I allow neither the bootmaker nor the architect nor the savant to impose his authority upon me. I listen to them freely and with all the respect merited by their intelligence, their character, their knowledge, reserving always my incontestable right of criticism and censure. I do not content myself with consulting a single authority in any special branch; I consult several; I compare their opinions, and choose that which seems to me the soundest. But I recognise no infallible authority, even in special questions; consequently, whatever respect I may have for the honesty and the sincerity of such or such an individual, I have no absolute faith in any person. Such a faith would be fatal to my reason, to my liberty, and even to the success of my undertakings; it would immediately transform me into a stupid slave, an instrument of the will and interests of others.
If I bow before the authority of the specialists and avow my readiness to follow, to a certain extent and as long as may seem to me necessary, their indications and even their directions, it is because their authority is imposed on me by no one, neither by men nor by God. Otherwise I would repel them with horror, and bid the devil take their counsels, their directions, and their services, certain that they would make me pay, by the loss of my liberty and self-respect, for such scraps of truth, wrapped in a multitude of lies, as they might give me.
I bow before the authority of special men because it is imposed on me by my own reason. I am conscious of my own inability to grasp, in all its detail, and positive development, any very large portion of human knowledge. The greatest intelligence would not be equal to a comprehension of the whole. Thence results, for science as well as for industry, the necessity of the division and association of labour. I receive and I give - such is human life. Each directs and is directed in his turn. Therefore there is no fixed and constant authority, but a continual exchange of mutual, temporary, and, above all, voluntary authority and subordination.
This same reason forbids me, then, to recognise a fixed, constant and universal authority, because there is no universal man, no man capable of grasping in all that wealth of detail, without which the application of science to life is impossible, all the sciences, all the branches of social life. And if such universality could ever be realised in a single man, and if he wished to take advantage thereof to impose his authority upon us, it would be necessary to drive this man out of society, because his authority would inevitably reduce all the others to slavery and imbecility. I do not think that society ought to maltreat men of genius as it has done hitherto: but neither do I think it should indulge them too far, still less accord them any privileges or exclusive rights whatsoever; and that for three reasons: first, because it would often mistake a charlatan for a man of genius; second, because, through such a system of privileges, it might transform into a charlatan even a real man of genius, demoralise him, and degrade him; and, finally, because it would establish a master over itself.
Indeed, it's quite pathetic that the cranks of yesterday were far more advanced than the cranks we see today, many of which are Nobel laureates (Paul Krugman) and major media figures. In fact, the former agreed with much of the refutations against the mystical doctrines espoused by the latter (the denial of scarcity, the magical powers of inflation, the so-called inefficiency of markets, etc, etc). It just goes to show that progression is not automatic and inevitable, and that we find ourselves in a period of a mass confusion and outright stupidity.
Here are some other quotes:
"The more rapid the process of accumulation, i.e., the excess of production over consumption, the better, taught the classical economists, who, though they were not clear about the process of the social production of capital, and though they were unable to free themselves from Adam Smith’s mistaken view that the social product consists of two parts, nevertheless advanced the perfectly correct idea that production creates a market for itself and itself determines consumption. And we know also that Marx’s theory, which recognised that the more rapid the growth of wealth, the fuller the development of the productive forces of labour and its socialisation, and the better the position of the worker, or as much better as it can be under the present system of social economy, took over this view of accumulation from the classical economists. The romanticists assert the very opposite, and base all their hopes on the feeble development of capitalism; they call for its retardation." (V.I. Lenin, A Characterization of Economic Romanticism, part 3).
"The market is, in fact, the very Eden of the innate rights of man. There alone rule Freedom, Equality, Property, and Bentham. Freedom, because both buyer and seller of a commodity, say labor-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself, and no one troubles himself about the rest, and just because they do so, do they all, in accordance with the preestablished harmony of things, work together to their mutual advantage, for the common weal and in the interest of all." (Karl Marx, Das Kapital)
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Heh, well, Marx never himself denied the efficacy of capitalism. He just confused it with interventionism (how can the capitalist state he so abhors coincide with what he describes capitalism as?) and had some kooky idea about how to free everybody by abolishing individual ownership of capital.
As regards Lenin, his analysis of the State wasn't entirely wrong.
Well, Marx was a crank as well. He believed that he had the powers to see in the future. He saw himself as some sort of prophet who attempted to "scientifically" describe the "inexorable laws of nature" that will inevitably replace capitalism with socialism. Of course, his entire economic framework, which is really just a philosophical critique of capitalism, is based on an entirely untenable premise/theory of value. But the point is that Marx, unlike the cranks we see today (Noam Chomsky, for example), would never claim that "capitalism and markets are inefficient."
Well my point is that Lenin, in that quote, defends Say's law (law of markets), contra overproduction/underconsumptionist explanations of the trade cycle. Most of the economists today believe that Keynes refuted Say's law, which is, of course, impossible.