Re: [OPE] free competition

Date: Thu Apr 14 2011 - 09:05:14 EDT

> In 'Imperialism, the Highest Stage of Capitalism' (section VII, entitled
> 'Imperialism, as a Special Stage of Capitalism'), Lenin writes: "At the same
> time the monopolies, which have grown out of free competition, do not
> eliminate the latter, but exist above it and alongside it, and thereby give
> rise to a number of very acute, intense antagonisms, frictions and
> conflicts."
> So free competition exists even in the epoch of imperialism - at least
> according to Lenin.

I think this highlights the danger of trying to comprehend economic and
social history (or, for that matter, the history of economic thought)
by looking first at what the 'masters' (Marx, Engels, Lenin, and whoever
else you want to add) wrote rather than first referring to *actual* history.
This is a method adopted by *followers* rather than a method adopted by
reputable historians.
The expression 'free competition' is inherently ideological because it
embodies within it the conception that no government regulation/interference
equates to freedom. It is a corollary to the classical conception of
laissez-faire. It has its origins *in thought* and was advocated by
classical political economics (including Bentham and James Mill) who
often rationalized it in terms of 'natural law'. It was a fantasy (and
an ideal) of one segment of the bourgeoisie, primarily in Europe in the
early 19th Century - although, it certainly continues to have its
advocates (most notably, ultra-conservative libertarians who were
influenced by the writings of Austrian economists including Bohm-Bawerk,
Menger, and von Mises).
The issue, from a historical perspective, is whether free competition
actually ever existed. No amount of quotes from Marx or Lenin will
answer this question. CERTAINLY, there was a period of time in capitalist
history than there was _less_ state regulation (or 'interference' as
the advocates of free competition like to say). CLEARLY, the amount of
government regulation on capitalist firms has increased over time -
although this was an uneven process with some countries being more
out in front on this question and others lagging behind. In the US,
for example, anti-trust policy only began in 1890 with the passage of
the Sherman Anti-Trust Act - largely brought about as a consequence
of a social movement of 'muckrakers' and 'trustbusters'. The history of
competition law, however, predates capitalism and goes as far back as the
Roman Empire.
Let's consider the history of the country that this ideal of free
competition is most closely associated with - Britain. Going as far
back as the mercantilist period, the government took an active role in
the process of competition and lack there-of. For instance, the government
created corporations by act of Parliament or through a Royal Charter
granting these entities a monopoly. The most notable example of
this was the British East India Company established in 1600. Later,
the South Sea Company was created ( 1711), the Royal Exchange
and London Assurance Act (1719) was passed which prohibited the formation of
companies without a Royal Charter, followed by the passage of Bubble Act (1720).
Later still there was the Limited Liability Act (1855) and the Joint Stock
Companies Act (1856).
States have *always* limited the ability of firms to decide what to produce,
who they can sell their commodities to, etc. For instance, arms manufacturers
were not 'free' to sell arms to anyone who could pay for them. Even
putting aside 'modern' concerns (like child safety) the states had to
control the trade in arms for national security reasons - since without any
restrictions then companies would be 'free' to sell guns to other nations
and parties who were considered to be 'enemies' of the state. Of course,
the Church also exerted influence over the state at times to make the sale of
certain goods illegal. Indeed, the special rights given to the Crown
and the Church - and recognized by Parliament - were a violation of the ideal of
'free competition'. The English bourgeoisie pushed for (but never attained)
free competition partly because it was seen as a means towards breaking
up the monopolies of the land-owning class (which, of course, includes the
Royal family and the Church). Another target were guilds - which continued to
have privileges and were exempt from laws against (non-state-authorized) monopolies
until the Municipal Corporations Act was passed (1835).
THus, while markets tended to be less regulated in earlier periods of capitalist
history, the claim that free competition existed is a *MYTH* generally
spread by the same people who would like to see this ideal attained. When it
comes from Marxists, it is part of a larger historical fiction regarding the
history of capitalism which de-emphasizes the role of states. The history of
capital and states can not be separarated - as left-wing anarchists and autonomists
are quite correct to emphasize.
In solidarity, Jerry
ope mailing list
Received on Thu Apr 14 09:06:03 2011

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