B.4 How does capitalism affect liberty?

For anarchists, freedom means both "freedom from" and "freedom to." "Freedom from" signifies not being subject to domination, exploitation, coercive authority, repression, or other forms of degradation and humiliation. "Freedom to" means being able to develop and express one's abilities, talents, and potentials to the fullest possible extent compatible with the maximum freedom of others. Both kinds of freedom imply the need for self-management, responsibility, and independence, which basically means that people have a say in the decisions that affect their lives. And since individuals do not exist in a social vacuum, it also means that freedom must take on a collective aspect, with the associations that individuals form with each other (e.g. communities, work groups, social groups) being run in a manner which allows the individual to participate in the decisions that the group makes. Thus freedom for anarchists requires participatory democracy, which means face-to-face discussion and voting on issues by the people affected by them.

Are these conditions of freedom met in the capitalist system? Obviously not. Despite all their rhetoric about "democracy," most of the "advanced" capitalist states remain only superficially democratic -- and this because the majority of their citizens are employees who spend about half their waking hours under the thumb of capitalist dictators (bosses) who allow them no voice in the crucial economic decisions that affect their lives most profoundly and require them to work under conditions inimical to independent thinking. If the most basic freedom, namely freedom to think for oneself, is denied, then freedom itself is denied.

The capitalist workplace is profoundly undemocratic. Indeed, as Noam Chomsky points out, the oppressive authority relations in the typical corporate hierarchy would be called fascist or totalitarian if we were referring to a political system. In his words :

"There's nothing individualistic about corporations. These are big conglomerate institutions, essentially totalitarian in character, but hardly individualistic. There are few institutions in human society that have such strict hierarchy and top-down control as a business organisation. Nothing there about 'don't tread on me`. You're being tread on all the time." [Keeping the Rabble in Line, p. 280]

Far from being "based on freedom," then, capitalism actually destroys freedom. In this regard, Robert E. Wood, the chief executive officer of Sears, spoke plainly when he said "[w]e stress the advantages of the free enterprise system, we complain about the totalitarian state, but... we have created more or less of a totalitarian system in industry, particularly in large industry." [quoted by Allan Engler, Apostles of Greed, p. 68]

Or, as Chomsky puts it, supporters of capitalism do not understand "the fundamental doctrine, that you should be free from domination and control, including the control of the manager and the owner" [Feb. 14th, 1992 appearance on Pozner/Donahue].

Under corporate authoritarianism, the psychological traits deemed most desirable for average citizens to possess are efficiency, conformity, emotional detachment, insensitivity, and unquestioning obedience to authority -- traits that allow people to survive and even prosper as employees in the company hierarchy. And of course, for "non-average" citizens, i.e., bosses, managers, administrators, etc., authoritarian traits are needed, the most important being the ability and willingness to dominate others.

But all such master/slave traits are inimical to the functioning of real (i.e. participatory/libertarian) democracy, which requires that citizens have qualities like flexibility, creativity, sensitivity, understanding, emotional honesty, directness, warmth, realism, and the ability to mediate, communicate, negotiate, integrate and co-operate. Therefore, capitalism is not only undemocratic, it is anti-democratic, because it promotes the development of traits that make real democracy (and so a libertarian society) impossible.

Many capitalist apologists have attempted to show that capitalist authority structures are "voluntary" and are, therefore, somehow not a denial of individual and social freedom. Milton Friedman (a leading free market capitalist economist) has attempted to do just this. Like most apologists for capitalism he ignores the authoritarian relations explicit within wage labour (within the workplace, "co-ordination" is based upon top-down command, not horizontal co-operation). Instead he concentrates on the decision of a worker to sell their labour to a specific boss and so ignores the lack of freedom within such contracts. He argues that "individuals are effectively free to enter or not enter into any particular exchange, so every transaction is strictly voluntary. . . The employee is protected from coercion by the employer because of other employers for whom he can work." [Capitalism and Freedom, pp. 14-15]

Friedman, to prove the free nature of capitalism, compares capitalism with a simple exchange economy based upon independent producers. He states that in such a simple economy each household "has the alternative of producing directly for itself, [and so] it need not enter into any exchange unless it benefits from it. Hence no exchange will take place unless both parties do benefit from it. Co-operation is thereby achieved without coercion." [Op. Cit., p. 13] Under capitalism (or the "complex" economy) Friedman states that "individuals are effectively free to enter or not to enter into any particular exchange, so that every transaction is strictly voluntary." [Op. Cit., p. 14]

A moments thought, however, shows that capitalism is not based on "strictly voluntary" transactions as Friedman claims. This is because the proviso that is required to make every transaction "strictly voluntary" is not freedom not to enter any particular exchange, but freedom not to enter into any exchange at all.

This, and only this, was the proviso that proved the simple model Friedman presents (the one based upon artisan production) to be voluntary and non-coercive; and nothing less than this would prove the complex model (i.e. capitalism) is voluntary and non-coercive. But Friedman is clearly claiming above that freedom not to enter into any particular exchange is enough and so, only by changing his own requirements, can he claim that capitalism is based upon freedom.

It is easy to see what Friedman has done, but it is less easy to excuse it (particularly as it is so commonplace in capitalist apologetics). He moved from the simple economy of exchange between independent producers to the capitalist economy without mentioning the most important thing the distinguishes them - namely the separation of labour from the means of production. In the society of independent producers, the worker had the choice of working for themselves - under capitalism this is not the case. Capitalism is based upon the existence of a labour force without its own sufficient capital, and therefore without a choice as to whether to put its labour in the market or not. Milton Friedman would agree that where there is no choice there is coercion. His attempted demonstration that capitalism co-ordinates without coercion therefore fails.

Capitalist apologists are able to convince some people that capitalism is "based on freedom" only because the system has certain superficial appearances of freedom.

On closer analysis these appearances turn out to be deceptions. For example, it is claimed that the employees of capitalist firms have freedom because they can always quit. But, as noted earlier, "Some people giving orders and others obeying them: this is the essence of servitude. Of course, as [right-Libertarians] smugly [observe], 'one can at least change jobs,' but you can't avoid having a job -- just as under statism one can at least change nationalities but you can't avoid subjection to one nation-state or another. But freedom means more than the right to change masters" [Bob Black, The Libertarian as Conservative]. Under capitalism, workers have only the Hobson's choice of being governed/exploited or living on the street.

Anarchists point out that for choice to be real, free agreements and associations must be based on the social equality of those who enter into them, and both sides must receive roughly equivalent benefit. But social relations between capitalists and employees can never be equal, because private ownership of the means of production gives rise to social hierarchy and relations of coercive authority and subordination, as was recognised even by Adam Smith (see below).

The picture painted by Walter Reuther of working life in America before the Wagner act is a commentary on class inequality : "Injustice was as common as streetcars. When men walked into their jobs, they left their dignity, their citizenship and their humanity outside. They were required to report for duty whether there was work or not. While they waited on the convenience of supervisors and foremen they were unpaid. They could be fired without a pretext. They were subjected to arbitrary, senseless rules. . . .Men were tortured by regulations that made difficult even going to the toilet. Despite grandiloquent statements from the presidents of huge corporations that their door was open to any worker with a complaint, there was no one and no agency to which a worker could appeal if he were wronged. The very idea that a worker could be wronged seemed absurd to the employer." Much of this indignity remains, and with the globalisation of capital, the bargaining position of workers is further deteriorating, so that the gains of a century of class struggle are in danger of being lost.

A quick look at the enormous disparity of power and wealth between the capitalist class and the working class shows that the benefits of the "agreements" entered into between the two sides are far from equal. Walter Block, a leading Fraser Institute ideologue, makes clear the differences in power and benefits when discussing sexual harassment in the workplace:

"Consider the sexual harassment which continually occurs between a secretary and a boss. . .while objectionable to many women, [it] is not a coercive action. It is rather part of a package deal in which the secretary agrees to all aspects of the job when she agrees to accept the job, and especially when she agrees to keep the job. The office is, after all, private property. The secretary does not have to remain if the 'coercion' is objectionable." [quoted by Engler, Op. Cit., p. 101]

The primary goal of the Fraser Institute is to convince people that all other rights must be subordinated to the right to enjoy wealth. In this case, Block makes clear that under private property, only bosses have "freedom to," and most also desire to ensure they have "freedom from" interference with this right.

So, when capitalists gush about the "liberty" available under capitalism, what they are really thinking of is their state-protected freedom to exploit and oppress workers through the ownership of property, a freedom that allows them to continue amassing huge disparities of wealth, which in turn insures their continued power and privileges. That the capitalist class in liberal-democratic states gives workers the right to change masters (though this is not true under state capitalism) is far from showing that capitalism is based on freedom, For as Peter Kropotkin rightly points out, "freedoms are not given, they are taken" [Peter Kropotkin, Words of a Rebel, p. 43]. In capitalism, you are "free" to do anything you are permitted to do by your masters, which amounts to "freedom" with a collar and leash.

Murray Rothbard, a leading "libertarian" capitalist, claims that capitalism is based on the "basic axiom" of "the right to self-ownership." This "axiom" is defined as "the absolute right of each man [sic]. . .to control [his or her] body free of coercive interference. Since each individual must think, learn, value, and choose his or her ends and means in order to survive and flourish, the right to self-ownership gives man [sic] the right to perform these vital activities without being hampered by coercive molestation." [For a New Liberty, pp. 26-27]

So far, so good. However, we reach a problem once we consider private property. As Ayn Rand, another ideologue for "free market" capitalism argued, "there can be no such thing as the right to unrestricted freedom of speech (or of action) on someone else's property" [Capitalism: The Unknown Ideal, p. 258]. Or, as is commonly said by capitalist owners, "I don't pay you to think."

Similarly, capitalists don't pay their employees to perform the other "vital activities" listed by Rothbard (learning, valuing, choosing ends and means) -- unless, of course, the firm requires that workers undertake such activities in the interests of company profits. Otherwise, workers can rest assured that any efforts to engage in such "vital activities" on company time will be "hampered" by "coercive molestation." Therefore wage labour (the basis of capitalism) in practice denies the rights associated with "self-ownership," thus alienating the individual from his or her basic rights. Or as Michael Bakunin expresses it, "the worker sells his person and his liberty for a given time" under capitalism.

In a society of relative equals, "private property" would not be a source of power. For example, you would still be able to fling a drunk out of your home. But in a system based on wage labour (i.e. capitalism), private property is a different thing altogether, becoming a source of institutionalised power and coercive authority through hierarchy. As Noam Chomsky writes, capitalism is based on "a particular form of authoritarian control. Namely, the kind that comes through private ownership and control, which is an extremely rigid system of domination." When "property" is purely what you, as an individual, use (i.e. possession) it is not a source of power. In capitalism, however, "property" rights no longer coincide with use rights, and so they become a denial of freedom and a source of authority and power over the individual. Little wonder that Proudhon labelled property as "theft" and "despotism".

Of course it is claimed that entering wage labour is a "voluntary" undertaking, from which both sides allegedly benefit. However, due to past initiations of force (e.g. the seizure of land by conquest) plus the tendency for capital to concentrate, a relative handful of people now control vast wealth, depriving all others access to the means of life. As Immanuel Wallerstein points out in The Capitalist World System (vol. 1), capitalism evolved from feudalism, with the first capitalists using inherited family wealth derived from large land holdings to start factories. That "inherited family wealth" can be traced back originally to conquest and forcible seizure. Thus denial of free access to the means of life is based ultimately on the principle of "might makes right." And as Murray Bookchin so rightly points out, "the means of life must be taken for what they literally are: the means without which life is impossible. To deny them to people is more than 'theft'... it is outright homicide." [Murray Bookchin, Remaking Society, p. 187]

David Ellerman has also noted that the past use of force has resulted in the majority being limited to those options allowed to them by the powers that be: "It is a veritable mainstay of capitalist thought... that the moral flaws of chattel slavery have not survived in capitalism since the workers, unlike the slaves, are free people making voluntary wage contracts. But it is only that, in the case of capitalism, the denial of natural rights is less complete so that the worker has a residual legal personality as a free 'commodity owner.' He is thus allowed to voluntarily put his own working life to traffic. When a robber denies another person's right to make an infinite number of other choices besides losing his money or his life and the denial is backed up by a gun, then this is clearly robbery even though it might be said that the victim making a 'voluntary choice' between his remaining options. When the legal system itself denies the natural rights of working people in the name of the prerogatives of capital, and this denial is sanctioned by the legal violence of the state, then the theorists of 'libertarian' capitalism do not proclaim institutional robbery, but rather they celebrate the 'natural liberty' of working people to choose between the remaining options of selling their labour as a commodity and being unemployed." [quoted by Noam Chomsky, Chomsky Reader, p. 186]

Therefore the existence of the labour market depends on the worker being separated from the means of production. The natural basis of capitalism is wage labour, wherein the majority have little option but to sell their skills, labour and time to those who do own the means of production. In advanced capitalist countries, less than 10% of the working population are self-employed (in 1990, 7.6% in the UK, 8% in the USA and Canada - however, this figure includes employers as well, meaning that the number of self-employed workers is even smaller!). Hence for the vast majority, the labour market is their only option.

Michael Bakunin notes that these facts put the worker in the position of a serf with regard to the capitalist, even though the worker is formally "free" and "equal" under the law: "Juridically they are both equal; but economically the worker is the serf of the capitalist . . . thereby the worker sells his person and his liberty for a given time. The worker is in the position of a serf because this terrible threat of starvation which daily hangs over his head and over his family, will force him to accept any conditions imposed by the gainful calculations of the capitalist, the industrialist, the employer. . . .The worker always has the right to leave his employer, but has he the means to do so? No, he does it in order to sell himself to another employer. He is driven to it by the same hunger which forces him to sell himself to the first employer. Thus the worker's liberty . . . is only a theoretical freedom, lacking any means for its possible realisation, and consequently it is only a fictitious liberty, an utter falsehood. The truth is that the whole life of the worker is simply a continuous and dismaying succession of terms of serfdom -- voluntary from the juridical point of view but compulsory from an economic sense -- broken up by momentarily brief interludes of freedom accompanied by starvation; in other words, it is real slavery." [The Political Philosophy of Bakunin, pp. 187-8]

Obviously, a company cannot force you to work for them but, in general, you have to work for someone. This is because of past "initiation of force" by the capitalist class and the state which have created the objective conditions within which we make our employment decisions. Before any specific labour market contract occurs, the separation of workers from the means of production is an established fact (and the resulting "labour" market usually gives the advantage to the capitalists as a class). So while we can usually pick which capitalist to work for, we, in general, cannot choose to work for ourselves (the self-employed sector of the economy is tiny, which indicates well how spurious capitalist liberty actually is). Of course, the ability to leave employment and seek it elsewhere is an important freedom. However, this freedom, like most freedoms under capitalism, is of limited use and hides a deeper anti-individual reality.

As Karl Polanyi, in The Great Transformation, puts it: "In human terms such a postulate [of a labour market] implied for the worker extreme instability of earnings, utter absence of professional standards, abject readiness to be shoved and pushed about indiscriminately, complete dependence on the whims of the market. [Ludwig Von] Mises justly argued that if workers 'did not act as trade unionists, but reduced their demands and changed their locations and occupations according to the labour market, they would eventually find work.' This sums up the position under a system based on the postulate of the commodity character of labour. It is not for the commodity to decide where it should be offered for sale, to what purpose it should be used, at what price it should be allowed to change hands, and in what manner it should be consumed or destroyed." [p. 176]

It is sometimes argued that capital needs labour, so both have an equal say in the terms offered, and hence the labour market is based on "human action." But for capitalism to be based on such "human action" or on free agreement, both sides of the capital/labour divide must be equal in bargaining power. However, due to the existence of private property and the states needed to protect it, this is de facto impossible, regardless of the theory. As Bakunin argued, "the property owners... are likewise forced to seek out and purchase labour... but not in the same measure . . . [there is no] equality between those who offer their labour and those who purchase it." [Op. Cit., p. 183]

This was recognised by Adam Smith : "It is not difficult to foresee which of the two parties [workers and capitalists] must, upon all ordinary occasions... force the other into a compliance with their terms... In all such disputes the masters can hold out much longer... though they did not employ a single workman [the masters] could generally live a year or two upon the stocks which they already acquired. Many workmen could not subsist a week, few could subsist a month, and scare any a year without employment." [Adam Smith, Wealth of Nations, pp. 66-7]

How little things have changed.

Its ironic that supporters of laissez-faire capitalism, such as "Libertarians" and "anarcho"-capitalists, should claim that they want to be "left alone," since capitalism never allows this. As Max Stirner expressed it: "Restless acquisition does not let us take breath, take a calm enjoyment. We do not get the comfort of our possessions. . . ." [Max Stirner The Ego and Its Own, p. 268].