Big Head Press

L. Neil Smith's
Number 524, June 21, 2009


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Organization Theory, by Kevin A. Carson
A Book Review by Sean Gabb

Special to The Libertarian Enterprise

I will begin my review by stating its main conclusions. These are that Kevin Carson has written one of the most significant books the libertarian movement has seen in many years. I do not agree with everything he says here. I do not suppose any libertarian will unreservedly accept what is said. Even so, I doubt if there is a libertarian who can read this book and not, in some degree, have his vision of a free society enriched and even transformed by it.

Summarising an argument that is worked out over more than six hundred pages is not easy. However, Mr Carson begins by observing that, while economic theory seeks to analyse the behaviour of individuals and small groups within a market system, the economic reality is a world dominated by large corporations within which prices are largely administered and there is an absence of competition.

He asks why this should be so. Why is there so much substitution of hierarchy for individual contracts? The standard answer, provided by Ronald Coase, among others, is that large firms are more efficient than small firms. The further the division of labour is carried, the larger the potential economies of scale. In an open market, however, the division of labour involves transaction costs—these being the costs of negotiating exchanges between many different suppliers of goods and services. Within a firm, these costs are not abolished, but are much reduced. Therefore, a firm will expand to the point where the cost of organising one more transaction within itself is equal to the cost of letting that transaction be made on the open market.

According to this analysis, firms grow large so far as their lower internal transaction costs make them more efficient than their smaller competitors. And there is an obvious temptation to regard size in a market economy as evidence of greater efficiency.

Against this analysis and its conclusions, Mr Carson argues that the point at which internal transaction costs become equal to the costs of transactions via the market has been artificially raised by state intervention. There are few objective benefits in size. Lowest long run average cost is often achieved by rather small scale production methods. There is little evidence that large factories are more efficient than small factories. There is little evidence that large firms are more innovative than small firms. Anyone who looks inside a large firm will see information and management and resource allocation problems similar to those described by Hayek and von Mises in their work on socialist calculation.

For two hundred years, economists have been content to repeat and elaborate on the example of the pin factory described by Adam Smith—in which the operations of making a pin are divided among many workers, thereby raising average output. In fact, these efficiencies can be realised just as easily by dividing the operations so that individual workers perform them one after the other.

If large firms predominate, it is not because they are the outcome of free market forces. Rather, they are called into being by systematic distortions of the market that amount to a subsidy on size. These distortions include the following:

First, there is subsidised transport and communication infrastructure. According to Mr Carson,

[i]t's... important to remember that whatever reductions in unit production cost results from internal economies of large-scale production is to some extent offset by the dis-economies of large-scale distribution.[p.34]

The British and American railway networks, for example, were built in the nineteenth century by private companies. However, investment was only made profitable by compulsory purchase laws, or actual grants of land. Without this help, the returns on investment—never very exciting in any event —would in at least most cases have been negative. Once built, though, the railways in both countries enabled the growth of national wholesale and retail markets that could now be served by large firms. The modern road networks were mostly paid for out of taxes, or with loans services by the taxpayers. They did for the concentration of enterprise in the twentieth century what the railways had done in the nineteenth. Distribution costs have thereby been externalised on other users or on the taxpayers.

Again, there is the building of ports and blue water naval defences and the forced opening of foreign markets. Without the very costly work of the British and American navies over the past few hundred years, it would not have become so cheap and convenient to carry goods about the world—a carrying trade that also widens markets and thereby subsidises the emergence of the large firms best able to benefit. There are foreign policies that make other countries more stable markets for large firms. How the Americans organised their southern neighbours for the convenience of the United Fruit Company needs no more than a mention. There is also the hugely expensive oil-based Middle Eastern policies of the British and American Governments during the past hundred years. Even with all the taxes heaped on it, petrol may have been made far cheaper than it would have been in the absence of government intervention. Perhaps, indeed, it is the artificial cheapness of oil that has shaped the whole structure of our civilisation by crowding out smaller scale alternatives.

It may be argued that subsidising transport tends to create large positive externalities. Perhaps it does. Nevertheless, the most visible benefits—being those enjoyed by large firms—have always been smaller than the full costs. As Mr Carson says,

If production on the scale promoted by infrastructure subsidies were actually efficient enough to compensate for real distribution costs, the manufacturers would have presented enough effective demand for such long-distance shipping at actual costs to pay for it without government intervention. ...[a]n apparent 'efficiency' that presents a positive ledger balance only by shifting and concealing real costs, is really no 'efficiency' at all. Costs can be shifted, but they cannot be destroyed.[p.69]

The same can be said of every communications network from national post offices to the Internet. They widen markets at far less than full cost to those who benefit from it. In particular, the satellite-based telephone and Internet revolution of the past few decades has allowed production and distribution right across the world to be organised from a single location.

Second, there are patents and copyrights. In a natural order—that is, in a society without a state—property rights in intangible items would be at least difficult to have recognised. The reason is that, while only one person can possess my notebook computer—and to take it away from me would be an obvious injustice, easily prevented or rectified—this review can be reproduced without limit. Similarly, the computer itself can be copied. In neither case is anyone deprived of his own possession. Intellectual property rights are essentially artificial property rights. They do not derive from scarcity, but from the creation of scarcity. They are essentially grants of monopoly privilege. They can only be created by the State. They can only be enforced by limiting what people can do with physical objects they have bought.

The claim that rights to intellectual property encourage the creation of intellectual property is unfounded. There is much evidence that firms would continue to develop new products in the absence of patent protection. There are many other ways of rewarding artistic creation than copyright. What does seem to be the case, however, is that patents are routinely used to hinder innovation; and the sharing of patents between large firms has the effect of shutting smaller competitors out of the market. And payments for the use of intellectual property enter very heavily into the supply cost of nearly all goods and services. This is particularly the case with pharmaceuticals, where patents serve less to encourage innovation than to increase prices to dozens of times their natural level.

Third, there is the cartelisation of costs brought about by laws prescribing minimum standards of product quality or of fair trading or of payment and treatment of workers. When, for example, cigarette manufacturers are stopped from advertising, there is the same effect on cost and profit as if the companies had agreed among themselves to stop advertising. Mr Carson says:

A regulation, in essence, is a state-enforced cartel in which the members agree to cease competition in a particular area of quality or safety, and instead agree on a uniform standard which they establish through the state. And unlike private cartels, which are unstable, no member can seek an advantage by defecting.[p.80]

Taxes have a similar effect. Value added tax, for example, is applied whenever money changes hands between businesses—above a low turnover threshold, that is. The effect of this is to raise the costs of transactions via the market, without touching those taking place within a firm.

Fourth, there are the incorporation laws. These allow a firm to be defined as an artificial person, with most of the civil rights and obligations of a natural person. One of these obligations is the same unlimited liability for debt as a sole trader has. However, while the firm has unlimited liability, the liability of its owners is limited to the extent of their investment. This privilege alone allows incorporated firms to raise large amounts of capital on the financial markets. Yet, while the shareholders theoretically own them, such firms in practice are the property of their managers, who feel none of the moral responsibility that comes with ownership.

Unless unlucky or badly run, incorporated firms can last forever, and can grow bigger and bigger and more bureaucratic in their organisation. It is no argument that incorporation might still be possible in a stateless society. It probably would not. Whatever the case, incorporation laws enable far more incorporation than would take place where every attempt required costly and time-consuming negotiation and advertising.

By these and other means, Mr Carson says, size of business organisation has been systematically encouraged by the State. Now, those who gain from such enlargement have not been passive or accidental beneficiaries. This is not a matter of "socialist" laws made by economic illiterates that have then worked to the advantage of big business. The world in which we live has been deliberately shaped over the past few hundred years or more by plutocratic elites that have wanted stable markets and docile workers and suppliers. These elites comprise the managerial and rentier classes, politicians and bureaucrats, and the various intellectuals who propagate the ideologies that justify the ruling class as a whole. The justifying ideologies shift over time. But the overall project has been one of centralising economic and political power so that wealth can be shifted upward from those who produce to those who consume.

In this state of affairs, the construction of welfare systems should not be seen as radical attacks from outside, but as an essential support of the established order. The growth of large firms as the dominant business unit has required the virtual conscription of millions of people into hierarchical structures, with the suppression—or at least the discouragement— of their individuality. Apart from regular cash payments, the reward for an almost military deference to authority has been promises of job security and paid holidays and pensions and healthcare. In America, this was made into a cartelised cost on big business. In England and most other countries, it was directly assumed by the State.

We do not live in anything approaching a market order. The state of affairs in which we live is best described as a kinder, gentler feudalism. Those at the top possess fabulous, almost risk free wealth. Nearly everyone else is attached, in extended patterns of fealty, to large organisations—big business firms, state bureaucracies, welfare services, and the like.

This being said, if our modern feudalism is nicer than the old, it is growing nastier over time. plutocratic social democracy worked so long as its inefficiencies could be covered with subsidies from the taxpayers and the exploitation of consumers, and so long as the workers were broadly content with the bribes given to keep them quiet. More recently, Mr Carson says, the crises of the system—overproduction of certain commodities, waste of natural resources, inability to maintain control outside the West, rising discontent within the West, and so forth—have begun to dwarf any means of overcoming them. The response has been a rearrangement of the sticks and carrots. Mr Carson says:

The elites who run our state capitalist economy made a strategic decision in the 1970s, to cap real wages and transfer all productivity increases into reinvestment, dividends, or CEO salaries. So while real wages have remained for thirty years, the wealth of the top few percent of the population has exploded astronomically.... To impose this policy on society, obviously required increasing authoritarianism in all aspects of social life.[p.257]

Because the system is unstable, it may collapse by itself. Or it may require an external push. Whatever the case, Mr Carson hopes for a future world in which statist privilege of all kinds will have been abolished, and in which all costs of economic activity will have been internalised. Such a world, he thinks, will be mostly of small communities, in which food and energy and manufactured goods will be produced and consumed close to market, and in which small-scale—often rather simple—technology will be the rule. Ordinary people, whether by themselves or in free combinations, will look after their own healthcare and welfare and will arrange for the education of their children.

As said, this is a long book, and a full summary of its argument would fill a much longer review article than mine. But this is, I think, the essence of what Mr Carson is arguing. And rather than elaborate on this essence, I think it would be more useful to explain what I find so remarkable about it. What is there to justify the praise that I gave in my first paragraph?

One answer—urged on me by a friend who calls himself an anarcho-communist—might be that Mr Carson has written the definitive refutation of free market libertarianism. To anyone who has read not more than a few pages of his work, this is a superficially persuasive opinion. Mr Carson does not regard himself as a free market libertarian as this term is generally understood. He says instead:

I belong to the general current of the Left so beautifully described by the editors of Radical Technology ('the "recessive left" of anarchists, utopians and visionaries, which tends only to manifest itself when dominant genes like Lenin or Harold Wilson are off doing something else'). "[p.1]

He does also, I admit, sneer many times at what he calls "vulgar libertarians"—these being people who defend plutocratic privilege as if it were a close approximation to a free market order. I also admit there are such people. The Internet is crawling with people who call themselves libertarians, and who defend the right of a drug company to sell its products in different markets at different prices, and to use the power of the State to suppress private arbitrage between these markets. Ayn Rand and—without her own reservations—her followers worship big business as the highest possible stage of human development. So far as they accept that there is a parasite class, this is the poor and unsuccessful who act via the politicians they have been unwisely allowed to elect to office. The Chicago libertarians for the most part seem to define a free market as little more than "Tesco/Walmart minus the State". They readily accept that there are groups benefiting from state action, but do not accept the existence of a "ruling class". And they deny that big business forms part of a system that is inherently exploitative. It might be argued that Mr Carson is attacking free market libertarians for hypocrisy.

But this is not his intention, and I think it would be regrettable if his book were to be regarded as an attack. He also says:

I embrace both the free market and the socialist libertarian camps.... I write from the perspective of individualist anarchism, as set forth by William B. Greene and Benjamin Tucker among others, and as I attempted to update it for the twenty-first century.[p.1]

For all his sneering at the "vulgar libertarians", Mr Carson's analysis proceeds much of the time—and with full awareness and acknowledgement—along the same lines as that of Murray Rothbard and of other free market libertarian critics of plutocracy. Almost every page of this book and of all else he has written shows and admits the influence of the Austrian school of free market economics. The Index of this book contains thirty eight references to Rothbard—quotations from his works or generally favourable comments on them. I do not think this famous passage is among those quoted:

Every element in the New Deal program: central planning, creation of a network of compulsory cartels for industry and agriculture, inflation and credit expansion, artificial raising of wage rates and promotion of unions within the overall monopoly structure, government regulation and ownership, all this had been anticipated and adumbrated during the previous two decades. And this program, with its privileging of various big business interests at the top of the collectivist heap, was in no sense reminiscent of socialism or leftism; there was nothing smacking of the egalitarian or the proletarian here. No, the kinship of this burgeoning collectivism was not at all with socialism-communism but with fascism, or socialism-of-the-right, a kinship which many big businessmen of the twenties expressed openly in their yearning for abandonment of a quasi-laissez-faire system for a collectivism which they could control.[Murray Rothbard, Left and Right: The Prospects for Liberty (1965), available at]

Even if not quoted, though, the passage shows an obvious similarity of approach. Or we can take a passage from Sheldon Richman that is quoted:

Many self-styled defenders of the free market misunderstand the American system. They believe that under a thin layer of government intervention lies the system they cherish. All we need to do is scrape away that layer, and glorious capitalism will be restored.

They couldn't be more wrong. There is no thin layer of intervention. Government has intruded deeply into economic activity from the beginning, most particularly in banking and finance, which is by nature at the center of any economy. The web of privilege and control is pervasive, touching all parts of the economy. Moreover, this intervention was never imposed on bankers, financiers, and the rest of the business elite. It was welcomed—to be more precise, it was invited and sponsored by them. Free enterprise, risk, and loss were for the little guy. Partnership with the state was for the elite. That partnership meant favoritism and protection from competition. It meant exemption from market discipline and exploitation of taxpayers, consumers, and workers.[Sheldon Richman, The Corporate State Wins (2008), available at]

Of course, written in 2008, this may show the influence of Mr Carson rather than any influence on him. But there can be no doubt that Organization Theory is a book written by a free market libertarian of sorts—and is a book that contains much of value to the free market libertarian analysis of actually existing capitalism. Its value lies in three areas. First, it carries the analysis of how plutocracy operates to a deeper radicalism than can be found in much of Rothbard and his circle. Second, he provides an overpowering weight of evidence for this analysis—evidence, I grant, of not always the highest value. Third, he writes from a perspective not often understood by free market libertarians.

I will avoid discussing his views of incorporation, as this is already an emerging consensus within free market libertarianism. I have written something on this myself, and my opinion—that the joint stock limited liability corporation is an unnatural and an undesirable development—is one that I formed before reading Mr Carson, even if this opinion has been strengthened by reading him. What did come new to me was his analysis of how distortions in the transport market tend to subsidise the growth of big business. It is some while since I read Rothbard with close attention, but I do not think he regarded these subsidies as of central importance. Hans-Hermann Hoppe does mention them somewhere in passing as more instances of coerced association. But I think Mr Carson is the first to treat them as of central importance. And once properly understood, they can be used to remove one of the main disputes between libertarians and traditionalist conservatives, among others.

For the better part of two centuries, conservatives have been sceptical of free trade because of its alleged tendency to destroy local patterns of enterprise and the relationships deriving from these. Their complaint has been that the removal of tariffs has tended to deprive large numbers of people—especially the native working classes—of any reasonable market for their services. Against this, libertarians have used the formally irrefutable logic of comparative advantage. If it is cheaper to import wheat or steel from abroad, they have argued, it is economically inefficient and a violation of rights to force people to buy these things from native suppliers.

While irrefutable, however, the theory of comparative cost is usually argued on the assumption of zero transport costs. Once these are taken into account, extended foreign trade may become far less profitable. Richard Cobden once observed that British agriculture was already protected by the high cost of shipping corn from Russia. What has happened since then is the growth of a vast international transport system built or subsidised by the taxpayers. This has brought down transport costs paid at the point of use and enabled the growth of unnaturally large patterns of international trade.

I live in one of the main apple growing regions of England. Even in the autumn, I can go into my local supermarket and find apples on sale from South Africa, from Chile, and even from China. When I drive home every summer from Slovakia, I find myself stuck on the smaller German motorways behind lorries carrying food from Turkey. How much of this trade would make economic sense if price in the shops reflected the full cost of transport? How much would there be if the motorways had not been built by the State, with powers of compulsory purchase and with grants of immunity against tort for pollution? How much would there be if transport companies had to pay the full cost of the wear their lorries made on the roads? How much would there be if the costs of stabilising the Middle East were reflected in the price of commercial diesel?

Adam Smith pointed out that grapes could be grown in Scotland, but that the opportunity costs made this a foolish use of resources. Perhaps it is. But perhaps if the full costs of production and transport entered into price, might it not make better sense to grow our own exotic fruits— especially given our more advanced agricultural techniques? Does it make real economic sense to import every consumer good imaginable from China and the Far East? Would it not be cheaper, in the absence of distortions, to buy television sets from a factory in our home town? Would it not be cheaper to spend more on maintaining most consumer durables than on replacing them every few years?

We are accustomed to laugh at ill-informed attacks on Ricardo and the other economists of foreign trade. But perhaps these attacks do contain factual truths that our own assumptions about trade theory prevent us from understanding. Perhaps if we were to take account of real transport costs, this whole dispute might be seen as another dialogue of the deaf.

The longest section of Organization Theory is contained under the heading "Systemic Effects of Centralization and Excessive Organizational Size". This is made up of observations that strike me for the most part as common sense—and even common knowledge—but that I have not before seen brought together into a structure of analysis. Indeed, though I did teach management theory for several years, its overall theme was a revelation to me. As said, many libertarians recognise that big business is inherently exploitative. But we have also assumed that it is reasonably productive within its own terms. It is not. As already mentioned, Mr Carson believes that large firms show many of the weaknesses long since indentified in centrally-planned economies. He says:

Individual human beings make optimal decisions only when they internalize the costs and benefits of their own decisions. The larger the organization, the more the authority to make decisions is separated both from the negative consequences and from the direct knowledge of the results. And in a hierarchy, the consequences of the irrational and misinformed decisions of those at the top are borne by the people who are actually doing the work. The direct producers, who know what's going on and experience directly the consequences of decisions, have no direct control of those decisions.[p.193]

The results of this are an obsession at the top with targets that can be measured and an indifference to local understandings of how work may best be done. Profitability crises are managed by thinly-veiled attempts to make people work harder for less, by "downsizings" that cut measurable costs while destroying intangible patterns of human capital, greater incentives to management to restore profitability, and an interest in fad management theories that talk of "empowerment" and decentralised control, but are just shifts in legitimising ideology to jolly the workers along.

Strikes and other forms of industrial action should not be seen as mindless wrecking, or attacks on property or violations of contract. Rather, they are often attempts by the workers to claw back some of the humanity stolen by them. Nor can what is often the standard libertarian analysis of free contracting be used to justify the increasing authoritarianism of big business. Mr Carson looks at the increasing attempts to control what workers do in their own time:

Vulgar libertarians like to stress that, 'in a free market,' workers are free to take their labor elsewhere if they don't like their working conditions. And many free market libertarians respond with just that advice—frequently in quite indignant terms—in response to workers' complaints about their employers. Every complaint about employers' restrictions on their employees' freedom of speech and association outside of work is met with the response: 'Well, nobody's forcing you to work there.'

Well, yes and no. We market anarchists do not propose the imposition of any external constraint on what terms an employer can set as a condition of employment. The question is not whether the state should permit employers to set such conditions, but what kind of a market allows it

Just how godawful do the other 'options' have to be before somebody's desperate enough to take a job, and hold onto it like grim death, under conditions of stagnant pay, where (thanks to downsizing and speedups) they're doing their own work plus that of a former coworker?

But never mind those things. How do things get to the point where people are lined up to compete for jobs where they can be forbidden to associate with coworkers away from work, where even squalid, low-paying retail jobs can involve being on-call 24/7, where employees can't attend political meetings without keeping an eye out for an informer, or can't blog under their own names without living in fear that they're a websearch away from termination?[pp.402-03]

This analysis shades into a perspective on libertarianism that I, for one, had never really considered before. I came to libertarianism by reading Whigs like Macaulay and classical liberals like John Stuart Mill and Herbert Spencer. The common tendency of these writers is to view society from fairly close to the top. Liberty is good, they argue at least impliedly, because it means that well-educated middle class people get left alone to live as they please. My libertarian friends were mostly brought over by reading American writers of the twentieth century. Our common opponents have been socialist intellectuals who cry up the plight of the working man as an excuse for expanding state power. Those of us who are English and have reached middle age remember the crises of the 1970s, in which trade union activists seemed to be trying for a pro-Soviet revolution. There is for us a natural identity between property and liberty. And we have been inclined by reading and experience to identify the defence of property with defence of the propertied classes. If we have adopted the more radical approach of Murray Rothbard, it has been to complain at how the plutocratic elites have plundered middle class people like ourselves. Something most of us have never considered other than in passing is the position of those at the bottom—the semi-skilled and unskilled working classes.

Several years ago, I sat down to dinner with David Carr, who is the Legal Affairs Spokesman for the Libertarian Alliance. We discussed at some length what sort of outreach we could develop for those at the bottom. Libertarianism, I said, offered lower taxes to all. So what? David asked. A checkout assistant in Tesco pays little tax, and probably gains on balance from the welfare state. So what about freedom of thought and speech? he went on. These people are not very intellectual. And what of the right to live as they choose? They can already do that. Whatever taxes and restrictions there might be on cigarettes and drink and other recreational drugs, these do not really apply to anyone who is not worried about the occasional brush with the law. Granted— non-libertarian political systems, if they turn totalitarian, murder large numbers of people, and do not usually discriminate by class. But the chance that England will fall under a Stalin or a Pol Pot are not worth mentioning.  Granted —the abolition or hampering of markets means that goods are allocated more on the basis of connections than of price. But the poor lack both connections and money. They are made worse off—but not often in ways they can be brought to consider. Libertarianism is a fine ideology for the productive middle classes and those with the energy and ambition to rise into them. But what about the workers? Our conclusion was to find some way of preaching the benefits of "trickle down"—that the lower classes benefit from how their betters use their freedom—and to hope that some non-libertarian party might wrap up a certain amount of libertarian policy in complaints about the European Union and mass-immigration.

Our discussion was, I must say, a little more sophisticated than that. But the question of how to preach libertarianism outside the middle classes did not get much further than that. Shortly after this, I discovered the work of Kevin Carson, and my view of the question was transformed. His present book draws his earlier work together into one place and reinforces that transformation. The problem with all those patronising Labour apparatchiks and the scum in donkey jackets selling their newspapers outside Underground stations is their prescription. Their diagnosis that ordinary working people are exploited in a system that transfers wealth upwards is broadly correct.

People at the bottom suffer from plutocratic state capitalism because it robs them of the dignity that comes of being respectably poor—that is, being securely in control of their own lives. It raises the price of all goods and services to them. It places direction of their lives into the hands of credentialed elites. It herds them into large state or formally private organisations and subjects them to irrational and authoritarian control of their working lives. It forces them to live in disgusting conditions by preventing them from taking over unused land and building their own homes according to their abilities.

But "[c]onsider" says Mr Carson,

the process of running a small, informal brew pub or restaurant out of your home, under a genuine free market regime. Buying a brewing kettle and a few small fermenting tanks for your basement, using a few tables in an extra room as a public restaurant area, etc., would require at most a bank loan for a few thousand dollars. And with that capital outlay, you could probably service the debt with the margin from a few customers a week. A modest level of business on evenings and weekends, probably drawn from among your existing circle of acquaintances, would enable you to initially shift some of your working hours from wage labor to work in the restaurant, with the possibility of gradually phasing out wage labor altogether or scaling back to part time, as you built up a customer base. In this and many other lines of business, the minimal entry costs and capital outlay mean that the minimum turnover required to pay the overhead and stay in business would be quite modest. In that case, a lot more people would be able to start small businesses for supplementary income and gradually shift some of their wage work to self employment, with minimal risk or sunk costs.[p.549]

This does not talk—as many libertarians do when considering small businesses—about something that might turn its owner into a millionaire. It talks instead about micro-businesses that will never make anyone rich, but will simply make their owners independent of a system that turns them into serfs and bribes them with welfare handouts into becoming electoral fodder for the farce that is plutocratic social democracy. However, all this is presently illegal. There are taxes and regulations that exclude this sort of micro-business. The benefit that libertarianism holds out to the Tesco checkout assistant is not lower taxes on her pitiful and already mostly untaxed salary, but the chance not to work for Tesco.

Let me now turn from those areas where I completely agree with Mr Carson to those where I may disagree in principle, but am inclined to agree in practice. I am not sure if I agree with his opinions on land ownership. Certainly, I have no objection to expropriating South American latifundia and dividing these among the peasants who work them. But these are the product of obvious and usually recent theft overseen by the State. I am less sure about the illegitimacy of the rental income I derive from a second property. I am less sure about the income I hope one day to derive from owning a number of commercial properties. On the other hand, big landowners in England at least are part of the plutocratic ruling class. Most agricultural land here still seems to be owned by the old aristocracy—even if ownership is concealed by trusts and other corporate forms. This ownership prevents the emergence of a self-sufficient farming class. Perhaps there is a case for some confinement of property rights in land to what an owner can reasonably use for himself.

I am also divided on some intellectual property rights. I accept that patents are illegitimate. But copyrights are another matter. I own several property rights from which I do hope to grow rather rich, and—even discounting my personal interests—I think it would be unjust to deprive writers and composers of their royalties. I know that there are other systems of reward that do not rely on grants of monopoly privilege, and these may become more important as the enforcement of copyright grows technically more difficult. For the moment, though, I do look forward to my royalty cheques and do not regard them as ill-gotten.

On the other hand, I accept that copyright laws serve mostly to enrich media companies that are part of the ruling class. The main function of these companies is to brainwash us into accepting the system in which we live, or to moronise us into not being able to notice how we are tyrannised over and exploited. I am not sure.

I am more decided about Mr Carson's acceptance of the environmentalist claims. I do not believe that we are running out of natural resources. I certainly do not think, as Mr Carson insists, that we are living in the age of "peak oil"—that "the greatest sources of concentrated energy [i.e., fossil fuels] are almost certainly reaching their peak[p.432], and that we shall soon see a decline in their extraction. I will not bother in what is already a long review with digressing on a reply to this claim. I simply do not believe it. That being said, I do like his vision of a decentralised world where energy needs are met locally or in the home. We have lived for around two centuries now in a civilisation powered by oil and coal and gas. WE have got most of our oil from a Middle East that we have had to colonise and generally turn upside down. One cost of our dependence on oil has been the grown of giant oil companies that are leading members of the plutocratic ruling class. Another cost has been radical Islam. However generated, our energy needs have been met by vast, centralised distribution networks over which we as individual have no control, and which encourage us into attitudes of passive reliance on the ruling class.

Yet there are alternative ways of generating and distributing energy. At the moment, these are more expensive than those already established. This is partly because most of the alternatives are not very good in themselves—but also because we have had generations of effort put into making the best of moving large amount of oil around the planet, or distributing electricity and gas via national networks. There is no reason to suppose that these alternatives should always be a joke. That is why I am often unsure about the green movement. So far as it wants to shout down industrial civilisation and return us to the long preceding age when energy consumption was minimal, I stand happily beside the most fanatical and vexatious Randroid. So far as it might be useful to bringing about a world in which energy consumption can rise without limit—but without state-built or state-controlled energy networks—I am inclined to put on a straight face and nod hopefully over talk of wind turbines and solar cells.

Let me now conclude with one purely negative criticism of Mr Carson. I come back to his denigration of the "vulgar libertarians". Since I probably do not qualify as one of these according to his definitions—and probably never have done—I hope my defence will not be seen as self-serving apologetic. But what have these people said that is so absolutely reprehensible? They have defended the most fantastically productive economic system that has ever been extensively tried. If, judged by the strict standards applied by Mr Carson—standards that I largely accept—this system is lacking. Compared with any other, it is barely the wrong side of heaven itself. It is exploitative at home. Say what other system has not been. It is nakedly exploitative in outlying regions. Again, say what other system has not been. It is riddled with irrationalities and waste of human and material resources. I repeat the challenge. We have lived under something like our present system for at least one century—perhaps two or more. Mr Carson is still free to write up and publish his devastating attack on it; and I am free to give it a more or less enthusiastic review. If the "vulgar libertarians" have given any intellectual support that has enabled the system to survive, they still rank among the benefactors of mankind.

But this leads into issues far removed from this review. Mr Carson has written a very long book. Even so, it is filled with arguments and insights that, I repeat, will enrich and transform the vision of a free society held by anyone who reads it. Despite what I see as its occasional faults, I heartily recommend it.

Organization Theory, by Kevin A. Carson Buy me at

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 184
18th June 2009

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Available for debate on LA Blog at

NB—Sean Gabb's book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded for free from


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