The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or by any other controlling private power…. Among us today a concentration of private power without equal in history is growing.
– Franklin D. Roosevelt
Personally I’m in favour of democracy, which means that the central institutions in the society have to be under popular control. Now, under capitalism we can’t have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control. Thus, a corporation or an industry is, if we were to think of it in political terms, fascist; that is, it has tight control at the top and strict obedience has to be established at every level – there’s a little bargaining, a little give and take, but the line of authority is perfectly straightforward. Just as I’m opposed to political fascism, I’m opposed to economic fascism. I think that until major institutions of society are under the popular control of participants and communities, it’s pointless to talk about democracy.
– Noam Chomsky
It’s all about money, not freedom, ya’ll, okay?
Nothing to do with fuckin’ freedom.
If you think you’re free, try going somewhere without fucking money, okay?
– Bill Hicks
I want to describe two conflicting views of the world. The first is the predominate mainstream view; that is, that there is a mutual exclusivity between government and freedom, whereby the larger a nation’s government, the less freedom it has, and vice verse. Under this world view, government is inherently oppression and if government is removed, in its place is left freedom. Whatever lies in the private sphere, aside from government, is freedom. The state is oppressive; the free market is freedom.
The second — and in my opinion correct — view is that, for any given size and level of development, there will be a fixed level of facilities required by a society. A society like our own will always require a police service, fire service, hospitals, schools, prisons, street cleaning, border controls, courts, lawmaking, news and broadcasting; the list goes on ad infinitum. Whether or not these services are provided directly by the state, contracted out to private providers, or provided directly for sale by private providers, they will exist in some form and therefore the size of the collective ‘government functions’ will remain the same. This forms the basis of the theory of ‘conservation of government‘, or as a friend recently pointed out it might be better called, ‘conservation of governance’. The level of freedom in any society is determined therefore not only by the freedom afforded them by the state, but also as afforded by any other corporations, charities, or any other organisation, which fulfils those roles of governance. For any given service that the state can be broken down into, that service can be run either democratically, oligocratically, or autocratically. The collective effect of this, with some services obviously having more weight than others, determines whether one lives in a democratic, oligocratic or autocratic society.
The single biggest failing of the capitalist definition of freedom is therefore the idea that prohibitions on freedom can only emerge from government. To give an example, a nation where the government imposes zero control over the press would be regarded as having one-hundred percent press freedom, yet the same nation’s press could be, in terms of reach and distribution, ninety percent owned by a tiny handful of private companies, with other interests, exercising their own restrictions on the stories that are printed. When a media outlet is owned by the state and pushes a state agenda, that, we are told, is oppression. When a media outlet is owned by a conglomerate and pushes the agenda of that conglomerate, that, we are told, is freedom. It seems to go unnoticed that whether a controlling power base is officially called a ‘government’ or in fact a ‘company’ makes little difference.
It is quite telling that the Freedom House report on the United States, despite some criticism, still gives a relatively glowing report and high scores to a country that currently holds people prisoner, without trial, indefinitely and in poor conditions, simply because they were on the other side of a war, where the USA itself was the (potentially illegal) aggressor. It is a country where gay rights are still suppressed in many states; where there is still endemic sexism and racism; and where the only freedom enjoyed by the poor is the freedom to die quietly. The balance is heavily in favour of negative rights, such as freedom of speech, and with relatively little regard to positive rights, such as the right to access healthcare. It is tipped in favour of de juro rights rather than de facto rights; every group of people have an equal right to start a political party, but it is quite possible for their efforts to be easily ‘snuffed’ by those with the monetary means. It is also somewhat more concerned with the rights of traditional rights-holders (straight, white men) and the majority: a country that did not allow straight couples to marry at all would doubtless be heavily penalised, but not permitting gay couples to marry in most states still allows the USA to hold on to first place. We therefore see the difference between capitalist, particularly libertarian ideas of rights, consisting entirely of negative rights (the government can’t do anything to me and I don’t have to do anything!); and a more socialist view of rights that incorporates positive, de facto rights along with accompanying responsibilities.
Right-Libertarians often accuse those of us on the left of ‘hating freedom’, but that is a straw man. The reality is that we are concerned more with de facto freedoms — what people are actually able to do — not just de juro freedoms — what they are theoretically free to do under law — so as to understand that sometimes enabling more of the former requires some small restrictions on the latter. Particularly, it is often required to curb the freedom of corporations to preserve the freedom of workers. At the very basic level, banning slavery (including ‘indentured servitude’ and any other euphemisms) is a restriction on the part of the slave-owner, but it preserves far greater freedom for those who would be slaves. In the same way, as we acknowledge that the corporation is an autocratic (or at the best, oligocratic) institution which seeks to extract the maximum labour from its ‘employees’ for as close to the subsistence wage as possible, taking advantage of the workers having little choice but to accept such jobs, it starts to sound like the only real difference is that the modern wage slave is allowed to choose which of several masters they will be exploited by. It is therefore consistent for the law to protect workers, even at the expense of corporate ‘freedom’.
The evolution from slavery to wage labour is quite clear. The master who owns slaves, land and the means of production is able to set the slaves to work and retain the entire produce of their labour. The master is then compelled to feed the slaves and provide some basic shelter and care; not out of any compassion, but through the desire not to waste property, in the same way that one might tend to a machine. The feudal landlord is little different, owning the land and the major means of production, and having the self bound to provide labour. The difference here comes only in that the serf retains a little of the produce of their own work and the landlord assumes the majority by virtue of ownership.
The free tenant farmer, by contrast, is not bound to any particular landlord, but has a choice from perhaps a small number of masters. The tenant works and is free to retain the entire produce of their labour, but then is charged rent by the landlord. The landlord charges as much rent as possible, bearing in mind that the tenant does need to eat. In the same way, the majority of the produce is again extracted by the landlord and the tenant is left with a subsistence provision. The semantics have changed, the the physical relation is little different to that of the serf or slave. The difference here however is that unlike the slave, the free tenant is not the landlord’s property and therefore the landlord is under no obligation to care for them. If the rent charged should send a few bankrupt and starving, so long as there are others looking for land and work, the landlord has suffered no property loss by their demise.
In the same strand, the employee differs only slightly in relations to the tenant worker, although they share some relations more with the serf. The employee is not bound to any one employer, but is free to move between any that will have them. At the same time, the employee does not acquire let of the land or of the means of production, both of which remain in the hands of the employer. Unlike the tenant, the total produce of their labour is not retained by the worker, but by the employer. Like the slave, the employer gives the employee, in wages or in goods, enough to subsist, but unlike the slave and like the tenant, the employer is under no obligation to ensure this wage allows for long-term survival, since there is generally a pool of available workers seeking to be employees.
The common factor is still that the workers either retain, or have returned to them, only a portion of what they have produced. The master, landlord and employer all take any excess above that, not through contribution of work, but through rent-seeking. The slave is bound to do whatever the master asks because of their status as property and the threat of punishment or even death if they do not comply; the employee is bound to do whatever their employer asks because of the potential for their wages to be withdrawn. Let us be clear about this: in a society based completely on free market rules, with no welfare state, having your wages withdrawn can quite easily mean starvation. The greater the consequences of having to go without wages, the greater demands employers can make of employees. As we already know from discussing inequality, the unequal economic power leads to unequal bargaining power favouring the employer, especially when there is at least some unemployment.
We proudly say that, since our central government is democratic, that we give in a democratic society. Yet the vast majority of us go to work in organisations that are run in a completely non-democratic manner. The vast majority of society operates in a non-democratic manner. The only proposed mitigation to this is the idea that ‘you can always work for someone else’ or ‘you can always buy from someone else’ but this is massively inhibited by the tendency of markets towards oliopolies and oligopsonies. There is the well-intended idea that democracy can be achieved by ‘voting with your wallet’, but if this is the case then it is a completely different form of democracy to any regular modern definition, with some people having billions of times the number of votes as others. Regardless, the fact that we have a choice between which of a small number of mini-dictatorships does not mean that our society is not, in its bulk, ruled by dictatorship.
We can therefore find several problems with the continuing trend of privatisation which has become fashionable among the governments of the world. First and most obvious is the transfer of a government function from under democratic control, however imperfect that democracy might be, to under completely and total autocratic or oligocratic control. In fact, the worst case here is where corruption on both public and private sides allows private contracting to be used as a means to channel public funds towards associates of those controlling tendering. The other problem is that, for the working class people of a country, privatisation is often a false economy. Contrary to common assumption, there is absolutely no reason why a private firm should be ‘more efficient’ than a public sector body. If Jack and Jill both carry water up a hill in the exact same way, there is no reason to believe that Jill will do so faster because she is a private corporation and Jack is a public body. If private firms are finding efficiency gains through better technology or processes, there is no reason why public sector bodies cannot make use of the same. More often, private firms are able to save money by paying their workers less, or giving them less favourable conditions than public bodies. What this might save those workers in taxes is lost in wages. For the working class as a whole, their average wage has fallen. Even for those working elsewhere, the fall in average wage may hurt them, since ‘inflated’ public wages can act as an anchor to increase private wages.
When a private firm starts taking control of multiple ‘public’ services, especially in multiple countries, there is a profound conflict of interests. Not only is the public good sacrificed for profit, but the interests of one client nation could be sacrificed for another. The total amount of control commanded by a company in that situation is approaching that of a small country.
To see the potential consequences of this unlimited ‘freedom’ to own, rent-seek and dominate, we only need imagine the worst case. There is nothing in capitalism that prevents one person, or a small number of people with limited competition between them, from purchasing and hoarding every square mile of this country’s finite land area. Such a landowner is under no obligation to rent out that land; they are well within their capitalist rights to squeeze every other person in this country into a small scrap of barren land and to let the rest sit empty. If this seems like fantasy then consider that it is only the ultimate case of what we have at the moment, with many empty second and third homes while people are also homeless. With no state to intervene, an oligopoly on land could quite easily lead to a situation where the landowners were ‘well within their rights’ to massacre the rest of the population by way of famine. With no land, means of production or money, the population would have no way of saving themselves.
It is the ability to rent-seek, deriving wealth from ownership, that undermines capitalism’s ability to meet two of our previously mentioned tenets for a successful economy; fairness is compromised and inequality is set to increase in an accelerated manner.
The current system of private ownership is therefore completely incompatible with a democratic and meritocratic system of production and distribution. Any true measure of freedom can only be achieved when society as a whole is run in a democratic manner and where the natural resources of the earth, including land, are common property that cannot be owned. It is completely irrational to assign ownership over those things which were not created by anyone, so that an individual might be born into a world where those things are already deprived of them, by virtue of someone else simply being around at an earlier point in time to take possession of them. Of course, in doing so, we must remove the need for private capital ownership and the need for the capitalist class, which means moving the sphere of investment from private to democratic hands.
There is an old adage that ‘money is power’. It is quite true for now, but it does not have to remain that way.