I recently finished Part 1 of Kevin Carson's Studies in Mutualist Political Economy. I use the verb "finished" in a very loose sense, as I will be very well served by two or three re-reads of that part of the book. The Wikipedia links I'm peppering throughout this post will serve as ample warning that I am a neophyte on these matters. However, I think I understand the basic arguments for locating the source of economic value in labor.
The Labor Theory of Value - frequently associated with Marxism - is almost universally rejected by modern liberal economists, to say nothing of mainstream libertarians. However, I found it interesting that Carson prefaces his entire thesis on a statement from Boehm-Bawerk, a 19th century economist who is credited with burying the LTV once and for all.
I have criticized the law of Labour Value with all the severity that a doctrine so utterly false seemed to me to deserve. It may be that my criticism also is open to many objections. But one thing at any rate seems to me certain: earnest writers concerned to find out the truth will not in future venture to content themselves with asserting the law of value as has been hitherto done.
In future any one who thinks that he can maintain this law will first of all be obliged to supply what his predecessors have omitted--a proof that can be taken seriously. Not quotations from authorities; not protesting and dogmatising phrases; but a proof that earnestly and conscientiously goes into the essence of the matter. On such a basis no one will be more ready and willing to continue the discussion than myself.
(My emphasis)
Boehm-Bawerk's ambivalence in declaring the outright victory of the Subjective Theory of Value is curiously even-handed (and almost modest in spite of itself). For Carson to invoke the statement demonstrates the deep intellectual tradition being revived - an opportunity, I should think, which any honest, thoughtful libertarian must gladly and excitedly embrace. For a philosophy so dependent upon the market as a model of human relationships and motivations, it is incumbent on libertarians to revisit the mysterious core of market mechanics: value and its true source.
Now, if I understand it correctly, Carson's thesis is that in a truly free market, "profit" and labor would theoretically dovetail, so that there would be no gain without corresponding time and toil. It is only coercive market intervention, sponsored by the state for the benefit of an elite, that creates the possibility that labor would be robbed of its full return. I'm still trying to get clear on how exactly the subjective forces factor in: my current best understanding is that in a free market, demand for the products of labor - while subjectively determined - would tend to balance out with the supply. Therefore, any subjective distortions from the ideal price of labor are temporary and do not change the source from which value originates. And I reserve the right to be wrong about that.
Studies has served as a feast of thought for me. If economics is really psychology practiced on the collective scale, finding trends among the accumulated actions of individuals that give insight into fundamental human nature, then I'm curious about how (if at all) prescriptive either the LTV or the STV are. What I mean is this: would both theories accept the actual practices and instituions of an authentically free market, were it to arise, regardless of where the true source of value actually originates? In other words, how important is precision in articulating the source of value in human transactions, so long as those transactions are all purely voluntary? We may have academic disagreements about the abstract mechanisms at work in generating the value thusly traded, but surely no mutualist, agorist, or other school of (non-vulgar) libertarian thought would reject an actually existing free market - were it to arise - because it conformed less with his preferred theoretical framework, right?
I don't mean to discount the value of scientifically studying economics; I'm simply trying to understand whether mutualism prescribes certain outcomes or whether mutualism - or any school - simply predicts a certain system arising in a free market. Given that, would not any system arising from the free market be the correct or just system, ipso facto? Or are there aspects of a genuinely free market which Carson, Konkin, Rothbard, and other market anarchists would reject as unacceptable - though uncoerced?
Again, I'm probably demonstrating my ignorance, but I just want to be sure I understand these positions. It gets back to an extremely interesting debate on LewRockwell.com (for which Roderick Long provides an excellent digest) about the expectations of libertarians in reforming social institutions vs. simply restraining the state (among other equally interesting veins of thought). If mutualism is a true scientific investigation of economic systems, then it should be open to whatever that true system happens to be - as should we all. I'm curious: are we?
Incidentally, as I put the finishing touches on this article, I just read a post over at lettuce have peas that makes a very similar point to mine (though it finds fault with Carson instead of asking for clarification, as I did):
The problem I find with Mr. Carson is his unwillingness to concede that there is some vague middle ground, a no-mans land so to speak, of which it's utterly impossible to divine what arrangements might actually prevail under the misty veil of the unknown free market ideal. I am even tempted to borrow the phraseology of the late Friedrich August Hayek, using what he termed "fatal conceit" to describe this willful egalitarianistic dream.
It is always good to nail theorists down with what their actual predictions are for their system, even if it's only to clarify a "I just don't know" position. Indeed, I think we need to release the need to know, and to work towards an optimal market society for its own sake. By all means check out Iceberg's post - it's food for thought for all of us who suspect throwing off government will change more than just our tax burden.
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