Category: Book Reviews


After a solid month of visiting various friends and family members, I am now ready to start blogging more regularly again.  With all vacations, I emerged appreciating life more. . . which means I am going to take a break from reading classics of libertarianism for at least this week.  Today, I am going to do a brief review of Hannah Arendt’s Antisemitism, and proceed to draw out some of its implications for a Marxist theory of racism.

Arendt’s book is not about Marxism in any way;  it is an account of antisemitism, the ideology, itself.  The history of the phenomena, as Arendt explains it, begins with the slow development of the nation states in the seventeenth and eighteenth centuries.  Individual Jews became strongly associated with the state in these periods, as Jewish bankers became often the sole source of financing for state activities.  This gave European Jews both inroads into the inner circles of the state (without themselves gaining actual political power) and a corresponding dependence on the state for their protection in a society which is otherwise hostile towards them.

After the French Revolution, nation states emerged large enough to require more capital than any individual Jewish banker could supply.  Consequentially, the combined wealth of the wealthier Jews provided financing for state activities, which accorded special privileges to the Jews.  At this stage, wealthy Jews were fully integrated into the state as a sort of ‘financial arm.’  This period ended with the nineteenth century rise in imperialism, where capitalist expansion involved the direct aid of the state.  Early in this period, bourgeois businessmen saw the profitability of financing state activity and displaced Jewish bankers as the dominant source of state revenue.  This removed their long-standing state function, leaving them relatively unprotected yet with large remaining sums of useless wealth.  Additionally, despite the fact that Jews gradually lost their state function, and with it what social power they had (which, in reality, was shared only by rich individual Jews, not distributed to Jews as a group), their prior position as the prime source of financial revenue, and integration into political circles in every European country, connected them directly in the mind of most classes in society to the state independent of their actual position or power.  Thus, as discontent grew against the state, discontent grew against Jews as a race as representatives of the state.  Thus, the rise of Antisemitism, in short, is really a reaction against ‘the state’ which became a reaction against European Jewry.

This process shows its implications for Marxist theories of race after a few facts are introduced.  Jews became enmeshed in banking as a result of Christian prohibition of usury in the middle ages.  Jews were religiously persecuted, and commonly forbidden from traditional occupations, while in those same Christian regions usury (the reception of interest after the loaning of money) was prohibited to, essentially, everyone except the Jews.  The obvious consequence is that, in order to make a living, Jews had to engage in loaning money and receiving interest, a practice that was actually looked down upon rather than empowered (as is the case with modern financial capitalists).

The religious persecution of Jews (rather than racial persecution) resulted, thus, in the system of Jewish banking, that itself led to the process Arendt describes.  This gradually codified into persecution of Jews by race, and throughout this process the finance capitalist Jewry were essentially forced into this degraded class status until its power and profit potential was realized by the bourgeois;  at that point, the Jews could no longer serve this function, and they lost the only protected class status that any Jews had attained.  In short, the fact that Jews were Jews, first religiously then racially, forced them into subjugated economic positions, then forced them out when those positions were no longer subjugated.   Racism, here in the form of antisemitism, seemed to be a tool to force a group of people into a subjugated (yet functionally necessary) economic class.  This insight, though undeveloped, might be the foundation for a strong Marxist analysis of racism.

This is a continuation of my August 12th book review of Milton Friedman’s Capitalism and Freedom, which can be found below.  We last discovered that the foundation of his argument for a connection between capitalism and freedom depends upon whether or not individuals have a right to private ownership of the means of production.

Morality exists in general because people’s actions have physical effects in the world, and as such we need to consider our actions in light of these effects. The relevant standard is the impact of our actions on the things we affect, and how important this impact is on those thing, i.e. according to its impact on their well being. Rights cover those elements of well being that are so important that they must be protected. Minimally, we can be said to have, then, a first right to life; life is the background condition for any other rights or moral categories, and in the absence of basing an argument on a strong metaphysics, life is the essential element to well being. Life is not, however, its own purpose; it is just the precondition for the realization of other purposes. Our ability to act with relative freedom, i.e. our actions do not intrude first upon the right to life of others, and secondly upon their own freedom, is a necessary component of our well being as well. Consequentially, we further have a right to freedom. It has been argued by many that rights to private property are justified as, for example, a necessary precondition for the rights to life and freedom. These conceptions, however, justify only property use, not ownership, because so long as one has the necessary goods when they are needed, one’s rights to freedom and life are perfectly met. There are other attempts to justify private property ownership rights, but I will not cover them at this time. At any rate, ownership of the means of production (raw materials and tools) are direct limitations on the freedom of action and welfare of others, as they take away the means to achieve ends. They take away property use rights from others, and as such they limit the ability of others to meet their own needs, while overextending one’s own rights (in that property use is the only prerequisite of rights being met). We thus do not have a right to private property ownership in the means of production, but do have a right to free use of the means of production. Capitalism, in its absolute private ownership of the means of production, in fact violates the legitimate right to property. Consequentially, capitalism in fact violates rights rather than than guarantees them, this violation of rights is protected by coercive force. In short, Friedman’s entire argument that capitalism protects political freedom is false.

What about economic freedom? Economic freedom, the freedom of exchange, is essentially meaningless with Friedman’s conception of rights. The freedom to exchange goods it not necessarily contested under socialism (for example, socialists would not likely object to, say, a barter fair, and they most certainly would not object to an exchange of services). It is the specific sub-component of ‘economic freedom’ that involves production for exchange that is contested, and primarily because it involves the exploitation of labor, tendency for the accumulation of capital to override social values, and inability to meet human needs except by accident. Were no exploitation present and production geared towards meeting human needs it would be less objectionable. In fact, these conditions are impossible under capitalism, as capitalism presupposes and is founded upon exploitation and producing for profit, not needs. This aside, socialists object not to exchange per se, but capitalist production for exchange; thus, capitalism only differs necessarily from socialism in terms of economic freedom in that socialism rejects the components of economic freedom that violates rights, whereas capitalist apologists such as Friedman defend it.

His argument that freedom of exchange protects political freedom in that it restricts the means at the disposal of the state, thus preventing centralization and consolidation of power, has at least once central problem; it artificially separates the government from its citizens, which cannot be done in a democracy. Now, American democracy is not truly democracy but representative democracy, which is not democracy at all. In theory and practice, representative democracy replaces popular rule with quasi-popular choice of rule by an elite. In a real democracy, however, the government is the people, and thus removing the means from the ends of the populace through capitalism is an imposition on democracy. Friedman’s argument, then, is no more than an explicit argument showing how capitalism thwarts democratic self-determination through empowering a property-owning elite.

To summarize the preceding points, (1) Friedman’s case for capitalism being a necessary condition for democracy as well as economic and political freedom rests upon a notion of private property ownership rights—specifically private property ownership rights over the means of production, tools and raw materials. (2) Property rights are legitimate insofar as they contribute towards freedom and well being, but this supports private property use rights, not ownership rights, and specifically discounts ownership of the means of production, as it impedes freedom and well being. Since private property use rights mean no more than an individual has a right to use the property he or she needs (and here I will accept that private goods which aren’t the means of production have value attached to them that may be more for one particular individual than others, a picture of one’s own children for example, and so I will prima facie hold no qualms over ownership of private property that is not the means of production, at least insofar as my case against Friedman doesn’t require it, so I don’t need to go that far), private ownership of the means of production violates the use rights of others, as well as their freedom and well being. Consequentially, (3) capitalism in fact violates the legitimate range of economic freedom, and as it involves the coercive and illegitimate state defense of private property in the means of production, capitalism rests on coercion, and thus violates political freedom as well. It further (4) undermines democracy through its separation of political means from political ends, in essence holding democracy hostage. If government is to satisfy the purposes that Friedman sees in it, namely “”the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework” (27), the government ought to be socialist, devoid of illegitimate coercion because of its recognition of the proper definition of property rights.

Now, Friedman’s support of the connections between capitalism/freedom and capitalism/democracy have been undermined. He makes arguments on more specific sociopolitical issues later, and while many if not all of his points are rendered illegitimate and the questions themselves meaningless after the collapse of his notion of rights, I will proceed to advance additional arguments against them, each on their own terms. I may refer to something pointed out before, such as problems with private ownership of the means of production, but not simply make statements such as “Friedman says x, but since his conception of property rights has been rejected, x is wrong/meaningless”. In other words, I won’t reject his additional arguments by fiat.

In his chapter on Monopoly and Social Responsibility, Friedman argues against what he calls a “monopoly in labor,” referring to workers increasing their class power through unionization. Friedman argues that “if unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be. . . [and] the effect is an increased number of persons seeking other jobs, which forces down wages in other occupations . . . [making] high-paid workers higher paid at the expense of lower-paid workers.” (124) He thus argues that “unions have therefore not only harmed the public at large and workers as a whole by distorting the use of labor; they have also made the incomes of the working class more unequal by reducing the opportunities available to the most disadvantaged workers” (ibid). While it’s nice hearing Milton Friedman be so concerned here with inequality and disadvantaged workers, his argument presupposes that it is legitimate for capitalists to fire workers in order to preserve profits. His argument is saying this: when unionized workers work to raise wages, their boss has to pay more to employ them, and consequentially the only way the boss can maintain his profit margin is to employ fewer of the workers. It is a sad but true fact that the average American union is relatively conservative, and limits its demands to higher wages, reaching out too little to non-union workers, and rarely if ever fights for the workers outside its own union. However, Friedman’s argument neglects that, while the negative effects of unionization he shows seem believable, they are so only because of the capitalist’s decision to fire workers to maintain the rate of profit. In short, it is the choices of capitalists that might produce greater inequality between workers and harm the public at large. True, without maintaining the profit margin capitalists will be pushed out of the market, but this only shows that capitalists, too, are alienated, and capitalism, not individual capitalists, is the problem. A bit more work remains to be done in the process of reviewing Capitalism and Freedom, and so I will return to this post in short order.

My last review:https://practicalutopian.wordpress.com/2009/08/12/book-review-milton-friedmans-capitalism-and-freedom-part-i/

After reading two quite good posts on the Left Solutions blog against Ayn Rand, I decided that my next book reviews will be about some classics of libertarianism.  I expect to review Friedman, Rand, some Hayek, Nozick, maybe even some Rothbard.

Today’s book review is a classic of Libertarian thought, and a very influential defense of capitalism, Milton Friedman’s Capitalism and Freedom.  It’s major theme is, in the words of Friedman, “the role of competitive capitalism . . . as a system of economic freedom and a necessary condition for political freedom” (4) and its minor theme “is the role that government should play in a society dedicated to freedom and relying primarily on the market to organize economic activity” (ibid).  As the first two chapters lay out his theoretical position most explicitly, and contain the bulk of his arguments, I will concern myself most explicitly with these chapters, and draw from the last four chapters, The Distribution of Income, Social Welfare Measures, and Alleviation of Poverty, as well as the Conclusion, where appropriate.

Friedman begins through asserting that “only certain combinations of political and economic arrangements are possible” (8), and that “a society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom” (ibid).  He specifies that capitalist economic systems are not necessarily democratic, but that capitalism is a necessary prerequisite for democracy.  Friedman continues by arguing that (1) “freedom in economic arrangements is itself a component of freedom broadly understood” (8) and thus an end in itself, and (2) “economic freedom is also an indispensable means toward the achievement of political freedom” (ibid).

Economic freedom, to Friedman, essentially means freedom of exchange, i.e. the ability to buy or sell without legal restriction.  He considers it a necessary component of freedom because a restriction of it is a restriction of a range of choices and actions.  Political freedom means “the absence of coercion of a man by his fellow men” (15).  Friedman considers economic freedom as a means to political freedom because “it separates economic power from political power and in this way enables the one to offset the other” (9).  Markets more specifically secure political freedom because they remove “the organization of economic activity from the control of political authority, [and thus] the market eliminates this source of coercive power. . . [enabling] economic strength to be a check to political power rather than a reinforcement” (ibid).  Concentration of power, he argues, is most dangerous to freedom, and there is no zero sum law of economic power or fixed quantity of total economic power, whereas he sees the quantity of political power being essentially finite and thus more prone to concentration. He notes a general correspondence with the emergence of democracy and the emergence of capitalism, and a short time later argues that “collectivist economic planning has indeed interfered with individual freedom” (11).

After that partial digression, Friedman elaborates on the connection between economic and political freedom.  He argues that “the basic problem of social organization is how to co-ordinate the economic activities of large numbers of people” (12) and that there are two ways of doing so, either (1) “central direction involving the use of coercion” or (2) “voluntary co-operation of individuals” (13).  The latter, he claims, is based on the premise that “both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed” (ibid).  Consequently, he deduces, competitive capitalism brings co-ordination without coercion.  It is worthy to note here that his elaboration that “co-operation is strictly individual and voluntary provided: (a) that enterprises are private, so that the ultimate contracting parties are individuals and (b) that individuals are effectively free to enter or not to enter into any particular exchange, so that every transaction is strictly voluntary” (14).  In his model, viewing all ‘economic freedom’ in terms of exchanges, the buying and selling of goods and labor power are always mutually beneficial, never the product of coercion, and necessary components of freedom.  In fact, he claims that “the central feature of the market organization of economic activity is that it prevents one person from interfering with another in respect of most of his activities” (ibid).  The selling of labor power is uncoerced in that “the employee is protected from coercion by the employer because of other employers for whom he can work” (14-15).

This voluntary model of organization by markets is contrasted against “action through political channels,” which “tends to require or enforce substantial conformity” (15). Here he claims that the market is “a system of proportional representation” where “each man can vote [for his consumption choices]” (ibid).

Finally, Friedman argues that competitive capitalist societies have an easier time accommodating the avocation of socialism than socialist societies have allowed the avocation of capitalism. First, he argues that “in order for men to advocate anything, they must be in the first place able to earn a living” (16), which is problematic under socialism, he claims, because of governmental control of the job market.  Whereas in socialist societies, the state would have to subsidize subversive literature, Friedman argues that in competitive capitalism all one has to do is find a rich benefactor, or prove that one’s literature will make the publisher (or other media source) money.  The ability in competitive capitalism to find rich benefactors, Friedman argues, shows “a role of inequality of wealth in preserving political freedom that is seldom noted–the role of the patron” (17).  He further defends the costs borne in capitalist society to advocate radical change, arguing that “no society could be stable if advocacy of radical change were costless . . . [and that] it is important to preserve freedom only for people who are willing to practice self-denial” (18).  His only caveat is that “what is essential is that the cost of advocating unpopular causes be tolerable and not prohibitive” (ibid).

The role of government, then, is to provide “for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework” (27).  These questions are large, and Friedman places a notable caveat on what he believes to be the extent of democratic determination.  He writes that “the use of political channels, while inevitable, tends to strain the social cohesion essential for a stable society.  The strain is least if agreement for joint action need be reached only on a limited range of issues on which people in any event have common views” (23).  In other words, the more important the issue, the more Friedman sees it being destructive of democratic unity, and thus “fundamental differences in basic values can seldom if ever be resolved at the ballot box” (24) and inevitably result in conflict.  Here, again, he embraces the market for not requiring conformity on these base issues.

Now that we have laid out Friedman’s basic stance on the relationship between economic and political freedom, let us back up and consider his arguments as a whole. To recap, Friedman considers (1) ‘economic freedom’ as the freedom to engages in exchange independent of political authority or coercion, and (2) ‘political freedom’ as, more generally, freedom from coercion. Viewing freedom, generally speaking, as the overriding moral and political value, Friedman argues that the freedom to exchange, i.e. buy and sell in a competitive market, is a necessary component of freedom in that it is a subset of choices and actions that one ought to be able to engage in without experiencing coercion. Economic freedom is thus and end in itself. He also argues that economic freedom is central to political freedom because of (a) its controlling the means to politically determined ends, limiting governmental power, and (b) the ability for unpopular and radical perspectives to find voice in the market.

 

Friedman’s case rests on a number of assumptions, any of which would undermine his argument, but taken as a whole entirely demolish his case. Friedman’s conception of freedom is the absence of physical coercion. Friedman is right in his overarching perspective that governmental action involves or implies the use of coercion by necessity; the background of governmental laws is their ability to enforce them, and the concept of legitimate government implies its legitimate monopoly on the use of force within its boundaries. He simply sees the range of legitimate coercion extending only to protect the rules and preconditions of free market capitalism—contract enforcement and the definition and enforcement of property rights. He claims that the scope and definition of property rights is a question taken for granted, and properly subject to democratic debate, while simultaneously arguing for the inability for democracy to work in substantial value discussion (like debate over property rights) and presupposes the legitimacy of private property rights throughout his argument. Without the presupposed legitimacy of private property (or at least private property in the means of production) no individual would have the right to produce independent of social agreement, or for that matter restrict distribution of goods; his conception of economic freedom, which he claims to be a necessary component of freedom, is contingent upon the legitimacy of private property in the means of production. He further continually emphasizes that the ability to exchange, economic freedom, is an individual freedom, and thus placing constraints on individual exchange opportunities seems as though it would inherently violate his account of freedom. Thus, while he overtly recognizes that definitions of appropriate property rights are subject to democratic determination, his argument for economic freedom, and thus his argument that competitive capitalism supports freedom and is thus desirable, depends upon private property in the means of production being legitimate. If private property is not legitimate, then the coercion with which the government protects it is illegitimate, and economic freedom in the sense that Friedman intents violates political freedom. So the question becomes “Do we, as individuals, have a right to private property in the means of production?”

 

 

This review is continued at: https://practicalutopian.wordpress.com/2009/08/19/book-review-milton-friedmans-capitalism-and-freedom-part-ii/

Left Solutions: Ayn Rand, sociopathic politics – http://leftsolutions.wordpress.com/ayn-rand-sociopathic-politics/

This post is just a plug for some excellent books and authors I want to share with everyone. –comment if you have one you want to add, or have a comment on one I’ve added.

Rodney Peffer- Marxism, Morality, and Social Justice

Charles Andrews – From Capitalism to Equality

http://www.laborrepublic.org/

Michael Albert – Parecon

Cockshott and Cottrell – Towards a New Socialism

http://www.ecn.wfu.edu/~cottrell/socialism_book/

 Erich Fromm – To Have or To Be, The Art of Loving, the Sane Society

Michael A. Lebowitz – Build it Now

Meszaros – Socialism or Barbarism