A Libertarian Socialist Conception of Private Property

[Economists] forget that… it is use which determines the value of a thing, and that use is determined by fashion.
– Karl Marx, Economic & Philosophic Manuscripts

The left has been suspicious of private property since Pierre-Joseph Proudhon brazenly declared it to be nothing more than theft in 1840. His friend, Karl Marx, saw it as the root of capitalism’s exploitation, a superfluous invention of the bourgeoisie that would be dispensed with in the future. Anarchists’ generally see it as an agent of control. Even the most sympathetic socialists treat private property as a necessary evil. Those on the left who refuse to denounce private property are all-too-quickly labeled as faux-socialists, unwitting capitalist apologists, or even disingenuous counter-revolutionary agents.

On the right, private property rights are often so strongly enforced that they trump even the right to life, liberty, and the pursuit of happiness. Such a strong defense of private property is ironic, precisely because the justification for private property is typically based on “life, liberty, and the pursuit of happiness”, especially the right to life. These “background rights” perform the justificatory work for private property rights.

I want to engage this conversation from a third direction. I want to begin from a neutral position, neither assured of private property’s virtue nor its defamation. To start, I think we need a tight definition of what private property is. Then, I think we need to explain the fact that so many independent societies throughout history have lighted on the idea of private property. What particular problem did property solve? Then can it be justified to the satisfaction of socialism? To avoid suspense, I’ll sum my conclusions now: 1) private property is no different from personal property, 2) private property is common to many cultures because it solves the problem of how to divvy up the common world, and 3) private property can be justified for socialists when it is based on the background right to life and the pursuit of happiness.


The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonisms, on the exploitation of the many by the few. In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.
– Karl Marx, The Communist Manifesto, Chapter 2

There is, in the leftist tradition, an important metaphysical division of the concept of property. The first, largely implicit in Marx’s work, is the split between productive property and consumables. Marx paid little attention to the latter if he mentioned them at all. He, like all the great economists of his day, focused almost exclusively on the “means of production”. The productive property were the things you needed to produce consumables, which included the tools, machinery, and raw and pre-fabricated materials of which the consumable consisted. When Marx speaks of abolishing private property in the above quote, he intends only this productive property. He is also quick to defend the productive property of the “petty artisan and of the small peasant”, saying, “There is no need to abolish that; the development of industry has to a great extent already destroyed it and is still destroying it daily.” Marx is saying there is no need to abolish the camera of the photographer or the laptop of the freelance writer. So he means only the large-scale productive property, i.e. the factories, great machinery, and other types of great capital that requires a social body to utilize it. The consumable property goes by the name of “personal property” while the large-scale productive property goes by the name “private property”.

This division saves the left from the accusation that communism or socialism removes your right to use your tooth-brush exclusively. In other words, you have to share your tooth-brush with other people. This argument is devised to reduce socialism to absurdity. If you wouldn’t want to share your toothbrush, you couldn’t even share food-stuffs or water or air, at least not as you eat, drink, and breathe it. So it does make a compelling argument against which socialism must resolve. The division of property into personal and private is the traditional solution. However, the division of property introduces its own problems. The most important of these and the only one I will treat here is the indistinguishability of personal from private property. 

We can see the crack in precisely where Marx claimed there is no need to take away the private property of the individual proprietor. Here Marx is admitting that the tools of the individual crafter should belong to the individual crafter; their productive powers are thus not sufficient reason to socialize them. The common understanding is that it is then only those tools that require social operation which must be socialized–I am ignoring here a similar argument that certain types of property of, e.g. land, must be socialized irrespective of how it is used for the simple reason that Marx did not make this argument. The problem with the argument that only social operations must be socialized is that even socially operated machinery is individually exclusive as it is used. To make this concrete imagine an assembly line of ten persons. Each person has a specific spot on the line and performs their unique task. Each spot on the assembly line then may legitimately be conceived of as the exclusive property of the individual proprietor.

While such a conception is dangerous because each individual proprietor, save the first and the last, would be faced with a monopoly on either side of themselves, that is a single provider of the materials they need to do their work and a single consumer of their finished product (viz. the unconsumable, partially-worked commodity). It is more harmonious to conceive of them as all part of a single entity, each cooperating rather than competing. Still, even under the auspice of cooperation, each has an exclusive need to be able to use their part of the whole. The right to exclude others from their part is no different for the workers on the assembly line than it is for the individual proprietor whom Marx exonerated from the abolition of private property. We have only two ways of resolving this inconsistency: either abolish all private property, including the photographer’s camera and the writer’s laptop or do away with the distinction between personal property and private property altogether. As we agreed above that the former is absurd, we are left only with the latter.

What does this mean? It means that we cannot, as Marx commands, abolish private property. This means that capital and capitalist can’t simply be dispensed with. This is not a vindication of capitalism, as those on the right would like to assert. While getting rid of capitalists is not an option, what is left open to us is the modification of what can and cannot be done with private property. That is precisely what the rights of property owners entails them to do. The rights of private property ownership have their limitations, even the most right-wing libertarian will agree. For example, your “right” to own a gun and your “right” to do with your private property as you please, cannot be combined to justify any homicide you may like to commit. 


What lies behind the left’s condemnation of private property is the capitalist’s claim of a right to the surplus-value of a worker’s labor. This claim is justified, according to the apologists of capitalism, by the “ownership” of the means of production. Ownership then it is implied, entails the right to allow others to use said means to produce products for less than the value those products fetch at market. The chief problem the left has with private property then is that it can be used as a means for the exploitation of other people’s labor. Marx details of the process in the first volume of CapitalBut even there, private property does not so much create the exploitation as it is simply the vehicle for it. Property relations are social relations, not between human beings and things, but between human beings and other human beings. This is what makes economics political in the first place. 

Given this, our question becomes: can the capitalist really justify the right from ownership? To answer this question we will need to examine what justifies private ownership in the first place. I’ll start with John Locke’s justification of private property. In brief, Locke argued that the private consumption of the material world was vital to every individual. We cannot consume in common, even if we produce that way. This makes private property necessary in order to be enjoyed. The question for Locke then became, how is it that I come to exclude the whole of humanity in order to enjoy this or that particular thing? Or more concretely, by what right do I pluck an apple from the common tree so that I may eat it and by eating it, exclude all others from its enjoyment? When did it become mine alone to enjoy? We all agree that after digestion, it is exclusively mine, but when did it first become so? He traces back the right to my act of plucking the apple. With this labor expenditure, I have the right to that apple. So, generalizing from this, it is my labor that makes things mine. Locke would go on to lay the foundations of the first labor theory of value, but it is his labor theory of property that concerns us. This theory is the basis of private property rights upon which capitalism is founded.


Unfortunately for the bourgeoisie and Marx alike, the private property right established by Locke is not one based solely upon labor. Labor identifies which particular things are justified, but it does so under the pretense that we are going to use them. Locke himself said that one cannot claim a thing, merely to deprive others of its enjoyment. Ultimately then, it is the need to eat, in conjunction with the labor of plucking that justifies my claim to the apple and so the right to exclude the rest of humanity from the apple’s enjoyment.

Marx misses this. Elaborating in Capital that the value of commodities comes entirely from the labor required to produce them. We may deduce from this that the justification for using commodities according to Marx would come entirely from having labored to acquire a thing, either by producing it or trading “dead labor” for it. Use, the consumption element of commodities, plays little to no role in Marx, who argued that either goods and services have a use-value or they do not, there are no quantifiable degrees of use-value. Equally, there would be no reasoning for use in owning, only labor. For Marx ownership is derived merely from labor and trade.

But no one asserts this claim more than the bourgeoisie. The capitalist claim of ownership is justified entirely by the idea of labor exchanged for a good. That Marx and capitalism agree so completely on this subject is the greatest tragedic irony of the post-enlightenment history. Locke, as I said, founded the labor theory of property and of value on the unquestionable human need to consume individually. Labor alone is therefore insufficient to justify ownership of anything, and correspondingly, it is insufficient to justify the total value of anything. We lack the consumptive side, the input of use-value. This is where Marx made his most fatal error. He said that “use” could not be counted in the final estimation of value. He assumed more than argued that “use” has no quantifiable value because it is a quality, i.e. things either have a use-value or they do not. This is wrong.

Use-value, it turns out, is quantifiable, and what is more, it is quantifiable in units of labor. I have made the argument for use-values quantifiability before, see The Genius and Folly of Karl Marx, Part Two. What is confusing for us is that the labor-units for use-value are inverted from units of labor in exchange. They act like negative numbers to positive ones, so that use-value functions more like “labor saved” while an exchange-value represents “labor expended”. For example, to make a hammer, it might take X amount of total (socially-necessary) labor to produce and bring the hammer to market, this–according to Marx–would be the hammer’s value, assuming there was someone out there with a use for a hammer. However, this is just the minimum that the hammer’s manufacturer would want to sell it for, it does not represent the value of the hammer to the user. The final value is how much labor it saves its consumer over the amount of labor that consumer would have to shell out for it. A hammer’s cost then is subjectively determined by the consumer, not by the producer, and it is never objectively derived as Marx hoped to prove.


But all is not lost for Marx, because both use-value and exchange-value are determined as units of labor. In other words, labor remains the sole source of value for everything in exchange, just as Marx said. Private property becomes justifiable in the twin aspects of labor: labor-spent and labor-saved. I ignore here a metaphysical discussion of labor-saved, except to say that Marx himself saw labor-saved as the “value of capital”. It was the private aspect of capital that Marx and the left railed against. The “means of production” of which most capital consists is problematic only when in private hands.

This, however, is where libertarian socialism breaks with Marxism. It is not the private nature of the ownership of the “means of production” that is the problem. The problem is the fact that capitalists are not and never were the rightful owners of them. Capitalism is contradictory because it violates the justification for private property ownership established by Locke. Capitalists maintain their claim to rightful ownership through the justification of expenditure of labor, but since they have neither the desire nor a possibility of using the “means of production” exclusively their claim of ownership over them is wholly unjustified. It is, in fact, the workers and ONLY the workers who can meet both necessary conditions for ownership. First, they do have an exclusive need of the materials in question, and second, they (through the extraction of surplus-labor) have paid for them. This argument holds true for other forms of “rent”, for example, the tenant who uses the house has the priority claim to ownership of the house if they pay rent.

What is exploitative about capitalism is that the rightful owners of the means of production are not the “legal owners” according to the political structures drafted by capitalists. The inherent villainy of private property is a Marxist red herring, no pun intended. The upshot of this concept of private property is that we have a clear path and reason for removing capitalism’s exploitative element. It will require workers to become the rightful owners of the enterprises in which they work, as is suggested by Dr. Richard Wolff. But it goes beyond just that, it will require the abolition of the form of rent everywhere in society, except where the rentee is the public. It will also require a guarantee of income, but for reasons that are not expressly clear here. But that is all. We needn’t abandon private property nor do we need outlandish distinctions, (e.g. private property vs. personal property or labor vs. “socially necessary” labor) that prove only necessary to bolster the failings in Marx’s theory. The solution is more simple and more elegant, ownership of property is the right of the people who need it, who use it, and who paid for it; and not the state, the community, the government, or investors.

 

Marx, Markets, & the Major League

For Bob Weick

Economics is hard. Political economy is even harder. In order to structure and justly award and distribute material goods in a society, we must have at least some idea of the nature and determination of value. No theory thus far has managed to get it all right. Arguably, no theory thus far has gotten enough of it right to understand political economy. Today the division between theories usually breaks into two camps: the classical economists and the Marxian. On the neoclassical side, we find brilliant economists like Alfred Marshall, who discover fantastic formulas like the law of supply and demand, but who are dismally ignorant of whatever it is exactly that supply and demand consist of. On the Marxian side, we have Karl Marx himself, who paints economic vistas into the broad landscape of human society, but who–along with his followers–fails to satisfactorily provide us with a pragmatic economic model for the conduct of individual life.

The division between theories leaves a crack in academic economics a mile wide. The big questions upon which all economic knowledge rests seems to have slipped through that crack: Should we have private property? Is money a boon to or a flaw in a just economy? What is the source of poverty? Trying to understand economics today is like trying the solve the word jumble in the daily newspaper, only it’s written in a lost language, with innumerable symbols that no one, not even the experts, really knows what they mean. At the bottom of this well of confusion is the simple fact that after more than three hundred years of economic theory, we still don’t know how material things come to be valued in human societies. The Marxians will say it’s labor, just the labor that goes into production, nothing more, nothing less; but when you try out that theory, it falls flat. The classical economists have a theory that doesn’t fall flat. It does have predictive power, but it consists of units of measure that are mysterious and ineffable.


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Our situation is a little like being lost in the wilderness: we keep trekking, despite not being sure where we are going and without bothering to really ask why. And our leaders in this trek, the economists, are the least sure of us all. This would be bad enough, but to make matters worse, value theory, that is economic value theory, the search for a what gives material things the prices they command, has all but been abandoned by both camps; Marxians because they think they have it and neoclassical economists because they think they don’t need it. Sometime in the 20th century, capitalist businesses realized they don’t really need to know where value comes from to turn a profit, and in fact, it might be dangerous for business to find out. Thus, they prefer their economic explanations to be functional but not terribly explanatory. It’s the economic equivalent of going to a doctor to treat the symptoms: “Doc, my whole left side hurts.  I don’t want to know why and I certainly don’t want to have to do anything differently, but can yeh gimme something for the pain?” Economics departments the world over dole out drugs like corner boys around a west Baltimore high-rise. To be fair, they can’t really do any more than that, it would be beyond the scope of their science. Economics, you see, is a political function and just as there is a world of difference between politics and political science, so is there between political economy and economics. Where the former questions the nature of human relations through material things and worries about things like justice and group cohesion; the latter is the comforting realm of science, merely observing how nomological systems operate and reporting the patterns that are useful.

The first thing we’ll need to understand is that politics is primary and economics is derivative. Marx, according to his partner Friedrich Engels, over-emphasized the economic component of his theory because economics were the intellectual fad of his day. Marx then presents the material necessities of human society shaped their ideologies, including their politics. It was the available means of production that determined if a society was to be primitively communist, feudal, capitalist, socialist, or communist; and those dominate economic relations would determine if that society would have a monarchical, oligarchic, aristocratic, or democratic government. Things only moved from the material to the ideal for Marx, who was reversing Hegel on this point. However, ideas shape what we desire, and its that which truly determines our needs, and our needs which determine our labors. Ideas shape materials, and materials, in turn, reshape our ideas. The pattern is cyclical. For example, we have yet to develop mass production techniques for the “artificial appendix” as we have for the horseless carriage.

“AH HAH!” the orthodox Marxists triumphantly shout, “You’ve misunderstood Marx! A thing without use-value has no value at all, accord to him. So, of course, the ‘artificial appendix’ being useless, would have been a waste of labor, because it wasn’t socially necessary! That is why we never build one.” But Marx’s belabored theory of socially-necessary labor is precisely the problem. It’s a long walk he had to create because he had to discount the role of use in determining price.

Marx’s error–to put it playfully–was the assumption that there is no use for use-value in determining price. A commodity either has a use or it does not, according to Marx. Use-value then functions as an economic data bit; it’s either 0 or 1 and nothing in-between. It has no quantifiable distinctions. On this bold assumption, Marx launched the armada of his economic theory, which held some striking conclusions: 1) consumers don’t matter one tiny bit in the creation of value (outside of determining whether labor is socially necessary labor or not), 2) production, specifically the labor units of production, is the only input of value, 3) labor, measured in units of time, can be counted objectively and so the value of everything should be able to be calculated objectively, 4) markets are unnecessary for determining value, 5) money, as a lubricant of exchange, is only necessary if markets are necessary, so given four it’s also unnecessary, and 6) without the need for markets, money, or consumers, we could eliminate private property as vestigial organ of economics, an invention of the bourgeoisie, which we are now free to evolve beyond. As anyone who has read Capital Volume I will attest, Marx does nothing small.

But if Marx was wrong and use-value is quantifiable then all six of his conclusion given above are suspect. And sadly, the quantifiability of use was staring Marx right in the face; he even said it himself: the value of capital to the capitalist is its ability to reduce the need for labor. He just didn’t take the next step and realize then the use of all commodities is their reduction of the labor of the consumer in the tasks they employ them for. Marx didn’t see this, because he couldn’t see it. It would make his theory subject, a subjectively determined value, which in his mind would threaten his theory of surplus-value and thus the idea that laborers were being exploited by capitalists. It’s a very forgivable mistake.

Nevertheless, if every commodity, even food, can be reduced to a sort of “labor-savings” or negative labor it can be quantified just like labor can, and what is more, the units will exchange with labor in exactly the way a negative integer, exchanges with a positive one. Thus we can weigh labor-savings against the labor required to produce a commodity and determine a subjective value, but the result of this equation is still necessarily a labor theory of value. Marx cleverly pointed out that in order for things exchange for one another some common substance must be present in both. For example, for seafood to exchange for say taxi services, something must be a common denominator of both. And Marx rightly deduced that this common substance was human labor. He just didn’t understand that the labor savings of the commodity play a role in quantifying its value. The implication of this undoes a good deal of Marx’s later economic theory, so that: 1) consumers are in fact necessary to determine value, 2) markets are thus required, 3) so then is money. But the one theory of Marx’s that is not undone; rather, is actually confirmed by this insight, is that labor and only labor is the source of value of things. And the implications for that… well, let’s just say that employers, landlords, investors, lenders, or in a word, the bourgeoisie, will not be happy.


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This is the beginning of a brave, new socialism, but before we get to that, we should make sure that Marx was actually wrong about the role of use-value. To do that, we’re going to reconsider use-value from a purely materialist standpoint. For his theory, Marx’s needed to solve the “use paradox”, that is the problem of understanding why water, which is so useful, is so cheap, whereas a diamond, which is so useless, is so expensive. Marx did so by eliminating it. But this masterstroke blinded him to what his own method of inquiry, regarding material necessities, should have laid plain. Use-value is a fancy name for simply being able to consume a commodity, that is, actually use it; and here’s the kicker, we can’t consume any material commodities communally.

Non-material commodities, like the music that streams over the radio, can be shared by consumers within earshot simultaneously; we can all sit around and listen and no one loses out on enjoying the music just because I am listening to it. The radio device itself, on the other hand, is a material thing, and can only be set to one station at a time. But who gets to decide where it’s set? The owner, of course. This is what we mean by “owner”, whoever gets to determine where the radio is set. Unlike music, it cannot be simultaneously enjoyed. Individual owners are necessary to determine the use of any material thing, from your toothbrush to the means of production. So, at the same time, individual owners determine use-values.

This suggests that ownership is a necessity of use and so, contra Marx, private property turns out to be necessary. Let’s call this the consumer theory of private property. When it comes to material goods, private property is an essential fact of human existence because those goods cannot be consumed without an exclusive right to them. While it’s true that Marx overlooked this, he was right that use plays no role in determining the productive labor that goes into a commodity. The error was to think that consumers play little to no part in determining a commodity’s full value. Productive labor confronts consumers as a burden, a cost which decrease the labor-saving value of the commodity to them. That’s why we would all rather pay less for the same good if we can. If producer A can get a commodity for you for $10 and producer B for $12, then we will buy it from A. Let’s say that we think this commodity will provide us $X labor-savings. Then the actual value of the commodity to us is either X – 10 or X – 12; X being constant, and -10 being higher than -12, producer A’s commodity is more valuable. Producer A’s commodity is literally worth more to us. 

Compare this to Marx’s theory that suggests that the amount of labor time that went into each producers commodity would determine its actual value. In this case, producer A and B should be charging the same amount. The fact that they are not is evidence that something shady is going on. But that is not necessarily the case. Perhaps the metal used in the manufacture is hard to extract for producer B than for producer A. Thus it took more labor for producer B to bring his product to market than producer A. The question then becomes, can Marx’s concept of socially necessary labor time save it. Yes, it can. But it is a costly intervention. By determining that producer B has wasted some labor time by extracting less attainable ore, Marx has spun his entire system around. He has reversed the order of price determination and now is using the relative market prices as fixed, in order to prove that some labor was socially unnecessary. This is a serious problem because using Marx’s system we never would have been able to get those market prices in the first place, so how could we rely on them to tell us when labor was socially necessary or just a waste of time? 

So, we cannot share the things we consume, at least not as we consume them, and we need private property. If we need private property we need all the trappings that come with them: markets, money, trade laws, etc.. This has resounding implications for the remainder of Marx’s theory, but at the same time it certainly doesn’t justify capitalism. Marx’s intuition that capitalism is highly exploitative, unfair, and unjust is still intact. What has changed are the reasons why those things are true. The trouble with capitalism is that it also fails to recognize the role of use in property, but from another side, another angle. If you are reading this as a classical economist, I imagine that last line strikes you as something very odd. Isn’t use inessential to determining price? Well, no, and that’s why your profession has struggled to understand anything for the last two hundred years. Price, for the consumer, is how much labor you would have to expend to acquire a property right in a commodity, its value is the amount of labor that commodity saves over and above that cost. No one buys anything that costs them more than it’s worth or is worth to them individually at least.


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So you might be thinking, “okay, but really who cares!?! How is the role of use, not some economic pinhead on which a thousand angels dance?” Well, including use shows that while the Austrian school might have the math right, it’s the socialists and the Marxists who have the moral right. They’re both right, just about different aspects of economics. And that means we can finally understand where injustice enters in our system of economics. We can synthesize the labor theory of value with the subjective theory of value and arrive at a subjective labor theory of value. Doing so is certainly anathema to Marx’s theory, but it is not a vindication of capitalism because it firmly establishes the role of use in justifying ownership over a particular piece of property. This is to say, that in order to claim we “own” something, we must demonstrate our exclusive need to use it, not merely the labor we expended or traded to acquire it. This delegitimizes many of the so-called “uses” of private property that socialists condemn as a matter of course: namely rent, interest, and profit, all three of which can be shown to be anything but exclusive. Without these three, capitalism loses its exploitative element. This is certainly a step in the right direction and what I have elsewhere argued is the essential step in transforming capitalism into socialism. However, it not the last step. This libertarian socialism will still face other problems inherent in any private property and trade based system. 

To see this problem we need to go back to the idea that political economy is a subsection of politics. You might say that if politics is the study of human relations in groups, then economics is the study of human relations through material things. Politics surrounds economics on all sides and channels it. Even the quasi-sacred law of supply and demand is really only relevant inside a community, it does nothing to describe the economic decisions of Robinson Crusoe, alone on his little island. This is best understood through an extended analogy, so let’s introduce one.

Major League Baseball can be imagined as a microcosm of our political economy. There is a league that oversees the rules, just like a government that oversees the laws. There are teams and players, just like there are businesses and laborers. There are club owners just like there are investors. There are competition and cooperation. There are incentives and disincentives. The whole thing seems sometimes chaotic and sometimes orderly and well understood. MLB differs from the political economy mostly in impact and relevance. Far fewer people suffer extreme poverty at the hands of a misguided club owner than at the hands of a misguided Federal Reserve Board. But the most important difference is that every now and again, MLB resets everyone back to zero. That’s important! That’s really, really important! In baseball, unlike the real economy, you can’t just keep riding on your laurels indefinitely, games and seasons eventually end, and you have to start all over from the beginning again.

But why? Why does professional baseball reset at the end of a “season”? They could just take a break and then pick back up right where they left off. Why don’t they just keep chalking up victories and defeats? Well, mostly because that’s boring to watch. But it’s boring because the cooperative elements of the sport are essentially ruining the competitive elements. It doesn’t matter if the league decides to just declare the Yankees the winners of every game they show up at (like a totalitarian regime) or if they just allow them to start every game with a merit run for every world series they’ve previously won (like a capitalist regime); the end result is boring. And it’s boring because it’s unfair. We want victory or defeat to be the exclusive outcome of the efforts (dare I say labor) of the players on the field, not some privilege for previous labor. Each game and each season requires the teams to start as equals in order to ensure that it is this effort that leads to achievement, this is what it means to be fair.

It’s the same with economics. Competition between businesses is supposed to lead us to the best products, the best production methods, and the best law and regulation. This is what we mean by a just economy. But competition has to be fair in order to provide these results. So, we want a political economy were the profits and losses are a result of the efforts of the laborers, not the merits held-over from some bygone era. Imagine two restaurant owners in the same area. Producer A starts their business with a loan and producer B with a grant from family. Even if producer A offers better fare and earns more patronage, they may still lose to producer B who has lower-overhead. This is not a natural law of economics but is a choice at the political or “league” level. The choice is between two goods: one is protecting competition which tests out differing methods allowing us to determine the superiority of one or the other, while the other is allowing people to benefit directly from their efforts. The two goods at some point come into conflict. This is the problem of capitalism: it ceases to progress and be a good for society the more it allows individuals to benefit from their efforts and it ceases to be a benefit to individuals the more it insists on competition. We can see it’s different from the problem with state socialism which solves the problem with an ax, eliminating both the individual benefit and competition. Such a solution is accompanied by different, and arguably worse problems, which is beyond our scope here.

Capitalism, then, is like the league that allows teams to horde up runs for use in other games. We allow businesses to save profits by reducing wages to less than the full market value of their products, either voluntarily or exploitatively. But this “forced savings” is not necessarily a problem; what is a problem is that the beneficiaries of those savings are not the people doing the saving. The horde of runs is not for the players benefit, but for the club owners. Eliminating profit, making all business would merge the class of club owners with that of player, thus making those who save, those who benefit from the savings. However, what that solution does not do is protect society from the ill-effects of private monopoly. For that, we need something else, specifically something that will counter-balance the self-interested tendency to dominate a market by growth. One solution accompanies the loss of rent, interest, and profit, which is the great reduction to the interest to make income beyond a certain finite amount. This is the real result of putting use-value back in economics. But what we really require is something like the league equalizing the teams after every season.

We need a “league” that will maintain a healthy competition between “teams” and fair play amongst the “players” without micro-managing the games either, the way Keynesian economics do. The league cannot maintain competition through laissez-faire practices, so the league must set rules that foster competition, then and only then can we step back and let the umpires enforce the rules. The goal of any political economy then, is to set the right rules to maintain a healthy competition between businesses and fair and equitable treatment of all participants while allowing as much individual benefits from effort as possible.

The occasional forced economic redistribution that brings everyone back to some kind of equality before setting them loose again to follow their self-interest would do this, but I have nothing so ham-fisted as a yearly revolution in mind. Instead, I suggest we think about the other type of cooperation in baseball, that between teammates. Teammates work together in competition with other teams who are all cooperating together in the league for the good of the sport. Understood this way, competition is really just a different kind of cooperation or cooperation at a higher level as Hegel might say. In this case, even competition with winners and losers still benefits everyone in the long run. This Rawlsian, pro-capitalist line, has long been used to justify capitalism, I’m well aware. But without the exploitative element, we discussed above removed, we can actually be sincere about it. Competition can be benevolent, it just has to be fair in order to be so. Players in baseball, show up and do their best only because they believe the game isn’t rigged. If they knew they were being cheated, they would just stay home and there would be no game for anyone. The whole system then relies on everyone involved in it believing that it is fair and if I may be so bold as to say if everyone believes something is fair it is fair.

The solution then is a guaranteed income, preferably one that is pegged to some general economic indicator, e.g. providing a quarter of the per capita distribution of the GDP to everyone who doesn’t make more through labor. This simple solution allows for the social benefits of competitive experimentation in production while still allowing the benefits of large-scale productive activities that result from self-interested reinvestment in the enterprise. Not to mention countless other social benefits elaborated by better authors than myself, see a list of them here. I have argued other reasons why such a system of compelled taxation to finance a guaranteed income is necessary, but this one alone would be sufficient.

In sum then, I tried to lay out the basic economic theory that undergirds a theory of libertarian socialism. This theory calls for the abolition of rent, interest, and profit and the provision of a guaranteed income to every citizen. These two changes convert capitalism into stable libertarian socialism by maintaining the trade-based private property system of capitalism but removing its ability to be exploitative individually or socially. There is no doubt in my mind that other problems with libertarian socialism will appear if it is established and the hegemonic economic order. However, I cannot anticipate these and thus I have no solutions to offer. I leave that to other thinkers.