Konkinian Illogic: The Agorist Trap
If you want to see the relevant back story, this article is referring to Konkin’s reply [1] and Rothbard’s critique of NLM.[2] If you want a review of NLM and a defense of Rothbard, check out my previous article.[3] This article is a follow-on to my previous one and assumes the knowledge from that one in the reader.
The following paragraph is how Konkin begins his defense of NLM:
Before I dismiss it as criticism of agorism, let me point out that a real debate is justified here between Rothbard (and many, many others, to be sure) and myself (and quite a few) on the validity of hiring oneself out. The necessity of it is in question (cybernetics and robotics increasingly replace drudgery—up to and including management activity); the psychology of it is in question (selling one’s personal activity under another’s direction and supervision encourages dependency and authoritarian relationships); and the profit in it is open to question (only the rarest skills—acting, art, superscience—command anywhere near the market reward of even low-level entrepreneurship).
As pointed out in my previous article, Konkin continues in his view that employer-employee relationships are unjustified. Here he questions if they are needed. Konkin points out automation, but his knowledge of automation is severely lacking. Rather than leading to more and more unemployment in traditional heavy industry, automation has allowed companies to make each individual worker be more productive than they were previously. In fact, it was the advancement of technology that allowed the industrial revolution to take place.
He attacks this framework also from the psychology of following someone else’s production plans for payment. It is the sad reality of egalitarian thinking that the only way to be a full person is to obey no one but yourself. No role for social authority, nor obedience to God and His words. You are the worst master of yourself, as you cannot possibly reward yourself no matter how well you do and your body will enslave you. In fact, true liberty is controlling the passions of your flesh and allowing your intellect and soul to guide your life.
Other right-libertarians, such as Jeff Deist and Murray Rothbard, have gotten this correct:
“The strategic cost has been incalculable. Liberty has been sold as an ideology for atomized individuals, for soulless economic actors concerned only with getting rich in the gig economy, for drug and sex-obsessed libertines, for people without any allegiance to anything other than their own immediate self-interests.
"What a mistake! If we know anything about human nature, it is that we all desire to be part of something bigger than ourselves. Just because we as libertarians don’t want that something to be the state doesn’t change this!" - Jeff Deist [4]
“No individualist or libertarian denies that people influence each other all the time, and surely there is nothing wrong with this inevitable process. What libertarians are opposed to is not voluntary persuasion, but the coercive imposition of values by the use of force and police power. Libertarians are in no way opposed to the voluntary cooperation and collaboration between individuals: only to the compulsory pseudo-"cooperation" imposed by the state.” - Murray Rothbard [5]
There is no contradiction in the psychology of libertarians nor individualists in accepting someone’s authority, so long as it is voluntary. If you want a clearer definition of individualism, see my previous article on individualism.[6]
Finally, Konkin questions the profit of wage labor. Konkin notes that entrepreneurs get paid more than wage laborers. Bohm-Bawerk pointed out that this is because of interest. Entrepreneurs get paid later than wage laborers. Because of the time preference in all of us, the only way that someone would accept a later payment is if the later payment is greater than the present payment. This has been traditionally used in Austrian circles to show Marxists why employers are not exploiting their workers. This can be used here again to address yet another leftist idea. The other point of fact relevant to this discussion is a risk. Entrepreneurs are not guaranteed a paycheck like wage laborers are. In fact, a majority of new businesses fail and businesses that were once successful often become no longer profitable. A person’s time preference and risk tolerance will lead one to either become a wage laborer or an entrepreneur. As it can clearly be seen in the marketplace, most people subjectively value the guaranteed payment now over the risky, larger payment later.
Konkin follows his talk of entrepreneurialism with:
Again, in passing only, my own observations are that independent contracting lowers transactions costs—in fact, nearly eliminates them relative to boss/worker relationships running the gamut from casual labor with annoying paperwork and records to full-scale Krupp worker welfarism. But this is an empirical question, one, as Mises would say, not even for economists but economic historians. Why my Austrian credentials should be called into question over such an observation is inexplicable—save as an act of verbal intimidation. En garde, then.
This is an interesting conclusion on independent contracting as business models that focus exclusively on independent contracting are rather recent phenomena. If independent contracting lowered transaction cost ceteris parabis to hiring employees, you would have expected businesses of old to not hire workers, but contractors. Then as state regulations increased the cost of contractors, only then would businesses consider hiring employees. Instead, the opposite of Konkin’s economic conclusion has occurred. Businesses have only started hiring independent contractors instead of hiring employees because state-backed labor unions and state regulations have made employees expensive. For instance, many engineers are being fired as employees but re-hired as independent contractors to get around healthcare benefits and other regulations the state has mandated. Companies like IBM wouldn’t do this unless it was only with the introduction of regulations that makes it more profitable to have contractors as opposed to employees. This can be seen throughout the economy in what is called the gig or DIY economy, but let us limit ourselves to one example. Let us take Uber as an example. For decades, labor unions have been able to raise the price of employee wages. Recent mandates for additional benefits have finally made it profitable for independent contractors to be hired by a firm like Uber. The state had to make it more expensive for the employer-employee business model for the independent contractor business model to finally take root in the market. Rather than contracting lowering transaction costs, it is the employer-employee business model that is generally more efficient as measured by revenue minus costs.
With the side-excursion over, we turn to Counter-Economics, admittedly the basis of agorism and the New Libertarian Strategy. Rothbard finds NLM neglecting the “white market”—yet there is one crucial point on which it is most definitely not neglected, here or in my other Counter-Economic writing. The agorist imperative is to transform the White into Black. Nothing could be clearer. To do so is to create a libertarian society. What else can a libertarian society mean in economic terms but removing market activity from the control of the State? Market activity not under control of the State is black market. Market activity under the control of the State is white market and we are against it.
This is a mere confusion in terms. The black market is that market that has been outlawed by the state. Without a state, there would be no entity to outlaw a part of the market. A libertarian society would mean the destruction of the black market as much as the grey market because there would be no entity to ban or regulate the market. Every business that didn’t infringe on others’ property rights would be legal and thus white market.
Konkin’s stated desire here to transform the white into black means that when he describes how the black market operates, this is what he wants to occur, and everything that typically comes along with it. What a tragic idea that anyone would want to lose the peace of a white market. And while the state remains the "gang of gangs" why would you encourage the inherent violence of a counter system? Surely Konkin is not so deluded as to believe that this system would not, as shown with Mexican cartels, provide a peaceful alternative. Perhaps then we can conclude that as an alternative he is choosing a lesser evil.
The next paragraph deals with runaway slaves. What slaves might do as work while on the run from slave owners trying to catch them is not really applicable to non-slaves. It also doesn’t do anything to convince me of the economic efficiency of the black market that it is only those forced into hiding that truly benefit from non-coercive black markets.
Rothbard asks Konkin how an agorist society would create a complex machine like an airplane without traditional business practices that Konkin refers to as statist?
The following is Konkin’s rather long response:
“Rothbard’s listing of counter-economic services and goods are interesting in one respect: of “jewels, gold, drugs, candy bars, stockings, etc,” only one—drugs—is mentioned in the Manifesto. True, Counter-Economic is only now being published chapter by chapter, but even so, the few examples I gave were anything but a few service industries or easily concealed goods. Here is a list, sifted from pages 16 and 17, which were mentioned: “food to television repair;” an entire country “Burma is almost a total black market”—this does include heavy industry, although Burma has less than the heavy industry of India which is mostly black; the large “black labor” force of Western Europe; housing in the Netherlands; tax evasion in Denmark; currency control evasion in France; “underground economy” tax-free exchanges in the U.S.; “drugs including laetrile and forbidden medical material;” “prostitution, pornography, bootlegging, false identification papers, gambling, and proscribed sexual conduct between consenting adults;” trucking (the majority, by the way); smuggling at all levels; and misdirection of government regulators. All of these are not petty but, consciously or otherwise, aggregate big businesses!
Automobiles are made counter-economically. Let me count the ways: shipping them across borders and evading taxes or controls—whether physically or on paper; illegal alien labor for assembly-line production; skimming of parts by management, labor, or even with knowledge of the owners, which then go to produce custom cars; auto plant executives hired as “independent consultants”; design, research, engineering, executive and computer “consultants” all paid in partial or full counter-economic terms; union “corruption” to make sweetheart deals to avoid labor (State) regulations; OSHA and other inspectors bought off or misdirected; “unsold” product written off inventory and taxes and then sold; . . . forget it, I cannot possibly count all the ways. And next to autos, steel and cement have positively unsavory reputations—when it comes to “white collar” crime.
But there is a problem of scale here. Large, cartelized industries can buy politicians and gain their advantages from the State directly. True, anyone about to be apprehended by the State, can, should, and does payoff, bribe, and apply “grease” to the State’s enforcers. But what highly competitive industry with a large number of producers can effectively buy votes and politicians—and hence be tempted into using their political clout offensively? Big industry in the cartelized sense is no breeding ground for libertarian support but rather for the State’s vested interests. However, there is no need to confuse large scale of production with oligopolist characteristics, as Rothbard seems to be doing here.”
We already discussed that this description of the black market is an endorsement of it by Konkin advocating the black market. I was told by an agorist on Twitter[7] that it was a mere explanation, but that doesn’t hold water when you are also advocating the black market.
The question was what would Konkin’s ideal society look like and how it would produce specific goods. Konkin explained what he was advocating for, which had been teased out in my previous article, and then went on to explain it.
It is important to note that Konkin does not even state that black markets create machined parts, only that they can assemble complex machines whose parts were created by white or grey market businesses. Even if we were to be very generous to this response, this isn’t proof that non-traditional businesses can manufacture complex machines as a part of heavy industry. It is simply proof that businesses can maintain their business while skimping on regulations, which I don’t think anyone was arguing against. The claim by Rothbard was that without the traditional employer-employee relationship, which Konkin hates as made manifest in the previous article, it is non-obvious how complex machines would be efficiently produced. As such, Rothbard’s question of how an agorist society, which by definition is where the black market is the entirety of the market, would manufacture complex machines is left unanswered. Konkin is the one promoting a radical change to how we produce every capital good and many complex consumer goods, so he should be required to explain how this change will see them produced, how it is more efficient, and why it isn’t currently being done by entrepreneurs if some armchair philosopher can see this more effective and efficient means to produce goods.
Konkin backs down from Rothbard’s challenge of describing how an agorist society would produce complex machinery in absentia of factories, which Konkin claims is statist and inefficient, and instead focus on how black markets ship them and steal parts from manufacturers. As Konkin points out, black marketeers are an unscrupulous bunch and often steal things from business owners and make corrupt deals with various people. Hold on to this thought, it will be useful in a moment.
Konkin’s dodging of Rothbard’s question reveals something fundamental about Konkin’s agorism. Konkin was not in a live debate or time-constrained in his response. He could have taken time to respond to Rothbard’s inquiry. Instead, Konkin used this time to set up a dodge to Rothbard’s challenge. This response tells us that Konkin doesn’t have an answer to how an agorist society would create complex machinery like airplanes, automobiles, tractors, drill presses, and lathes without the state to bribe and white market businesses to steal parts from.
This article is what I found when I was trying to find a resource on the black market actually creating machined parts in Burma.[8] Without the ability to create complex capital goods like this, an anarchic, agorist society would return to a pre-industrial age. While it is arguable whether or not the better material wealth that the industrial revolution brought about is better for society or not, that would be the introduction of values to the analysis. I will simply note that people do seem to value higher material wealth from their actions in our society. There is nothing in the value-free economics of the Austrians school that would lead one to be a primitivist without other values added on to that. Since Konkin has not made an argument for why economically it is more efficient and leads to more material wealth to not have industry than to have it, I will conclude either that Konkin was a type of primitivist or that an agorist society would still need the state to operate to skim parts off of like in his example. Since the primitivist argument is uninteresting to analyze, I will only respond to the latter. This description of the black market, instead of answering Rothbard’s question, tells us that the agorist market Konkin is advocating for isn’t a radically new society, but one we see today.
Rather than an agorist society being an anarchic one, Konkin reveals that an agorist society is simply a parallel society to one that is dominated by a state. It is within the statist framework that Konkin’s agorism must work to survive. This is again a parallel to socialist thinking that capitalism can only be supported by the state. Konkin is correct when he called himself a part of the left.
It is, in fact, the black marketeers that have no moral scruples that Konkin raises up as the pinnacle of human liberty. Rather than being a just society based on natural law theory and property rights, it will always be a society on the fringes of the normal, albeit statist, society that agorists will operate in. Remember back to the NLM where Konkin advocates changing the entirety of the economy with the black market? It is these ruthless black marketers that would necessarily lead this agorist revolution. As can be seen in the cartel system of Mexico and the mafia systems of Italy and Russia, such black markets are not private law societies with their own judges, but vicious markets dominated by warlords. It is not property rights that are respected, but the force of arms. The lack of a judicial system in the black market requires this violence to resolve disputes through violence and not natural law. This is the natural consequence of the substantial costs and life-threatening risks in the black market. No court will see the two criminals in a case for a redress of grievances and both need to protect themselves from not only state police but their fellow black marketeers because no court system with enforceable edicts exists. This violent nature of the black market necessarily leads to cartelization and centralization of power from a large group of small black marketers to a few gangs. Rather than a bunch of businesses of one, when the black market proliferates, huge gangs proliferate. The worst-case would be an agorist revolution where a cartel or mafia replaces the state with their own version of the state. The states in existence throughout much of the west at least have some semblance of natural law in practice. The Mexican cartels or mafia have no such resemblance.
In comparison to the Mexican cartels, the state regulators in America seem preferable. Even Konkin agrees with this at the end of the quote, but he does not see that the violent nature of the black market naturally leads to cartels and mafias. Without an explanation of what Rothbard actually asked of Konkin, we have to conclude that these cartels and mafias are what Konkin’s agorism results in. Given that this is supposedly an acknowledgment of what happens in the black market and that Konkin advocates for the black market, can we really say Konkin does not advocate for these things? I would say that promotion of the action is the promotion of its consequences, especially when you proclaim said consequences. With this realization, it is a wonder why Konkin thought this was an equitable system that should be advanced.
Finally, as we close out this area, Rothbard accuses me of ignoring the working class. Considering how often he’s had the charge leveled at him, one might expect a bit more perceptivity if not sensitivity. What are plumbers, mechanics, carpenters, welders, drivers, farmworkers, pilots, actors, accountants, engineers, technicians, lab assistants, computer programmers, and just keypunch operators, nurses, midwives, paramedics and orthopedics (doctors), salesmen, public relations people, bartenders, waitresses, waiters, factory workers, lawyers, executives, and all types of repairmen if not workers, covering the entire spectrum of proletarianism?
All of that list are at least 20% counter-economic and many are over 50%. If they do not take the first step by becoming independent contractors toward economic liberty, then their employer does (tax-free tips for waitresses, off-the-book illegal alien factory workers, agents handling it for actors, writers, and so on). I challenge Dr. Rothbard to find any legitimate economic field (not serving the State) that cannot be counter-economized, ten that cannot be counter-economized without organizational or technological innovation, or a hundred that cannot be counter-economized without significant gain in organizational efficiency and profit. “Konkinism” has plenty to say to everyone who is not a statist.
It is not a question of what can be done that economics answers, but how to use scarce resources best that economics answers. One can cultivate and reap corn with your bare hands, but it doesn’t mean that is better than using a tractor and other capital equipment. As had been noted earlier, it is state intervention that makes independent contracting more preferable to employer-employee relationships. The answer as to when employer-employee relationships should be discarded for contracting is when independent contracting is more economically efficient, which means the state will likely need to get involved to achieve this agorist end.
Konkin moves on from his economic theories to his thoughts on revolution.
Either he is saying that no revolution has been libertarian enough to triumph without its contradictions bringing it down (true, but then irrelevant to bring it up as precedent) or he is saying that no group overthrew a ruling class using democratic means of oppression. The latter is not only false but a direct reversal of history. Nearly all somewhat successful revolutions in recent history have overthrown precisely democratic trappings: American Revolutionaries vs. the democratic British Imperialists; Jacobin Revolutionaries vs. the bourgeous assemblee; Liberal Revolutionaries against the Czar’s Duma (March 1917) and the Bolshevik revolution against the Liberals and Social Democrats (November 1917); the falange against the Spanish Republic (1936); Peron’s shirtless ones against the Argentine parliament; the National Liberation Front of Vietnam vs. the South Vietnamese parliament (at least until near the end); the popular overthrow of Allende’s democratically-elected regime (with Pinochet co-opting the revolution for the military); and the recent overthrow of the democratically elected but right-wing president of El Salvador by a centrist “popular” junta. This list is not exhaustive. A claim that “violent revolution” has only succeeded in “democratic countries with free elections” would be nearer the mark, and is often used by Latin American as justification for preventive coups.
Konkin, in order to disprove Rothbard’s claim, first uses mainly non-democratic monarchies of his examples of democracies with free elections being taken over by violent revolution. It is also interesting to note that the dual power of the February Russian revolution in Konkin’s recollection didn’t have the communists as one of the two powers. The only example Konkin gives that is of a democratic republic is of Spain, which had just two years of existence before violent revolution. Maybe if this was 1793, Konkin’s idea to use cartels, mafias, and gangs to overthrow the USA’s federal government would have worked. It is not like we can expect these cartels, mafias, and gangs to erect their own versions of states once they have won. The coups and front groups for foreign powers are the rest of the examples and don’t really have relevance to a bottom-up approach to violent revolution.
Rothbard has chutzpah to demand I separate libertarianism from counter-economists because the latter don’t need it—and then turn around and ask why the Russian counter-economists have not condensed into agoras. Human action is willed action; without entrepreneurs of libertarianism, it will not be sold.
While human action is rational, it wouldn’t take propaganda to make people adopt effective business models. The economic facts would bear this out and spread through the economy as a result. As has been covered before, many simply do not want to become entrepreneurs, especially when this will mean being the target of the police.
New Libertarianism does have an organizational preference. Other forms of organization might then be considered non-New Libertarian but not necessarily “unlibertarian” or non-agorist. What the New Libertarian Strategy seeks is to optimalize action to lead to a New Libertarian society as quickly and cleanly as possible. Activities that lead to authoritarian dependency and passive acceptance of the State are sub-optimal and frowned on; action that is individualistic, entrepreneurial and market-organized are seen as optimal.
As I showed the reader in the previous essay, Konkin does have an organizational structure that is preferred. It is the egalitarian structure of no hierarchy. This preference can also be seen in his astonishment that anyone would have authority over others, even if this authority is based on voluntary grounds.
This will end my response as the response to subversion in the liberty movement would make up its own article.
If agorism just meant fishing without a license or a business skimping on some regulation, then no libertarian would oppose it. It would also mean agorism isn’t an ideology on its own, just some business policy. This is why analyzing Konkin’s writing is so important, because Konkin is controversial despite agorist claiming agorism is just something completely uncontroversial. This is similar to feminists telling you feminism is just about equal rights for women. The majority in society agree with that, yet less than 20% of women are feminists. This tells us that everyone acknowledges feminism as more than just equal rights for women. The same is true for agorism.
Citations
http://www.anthonyflood.com/konkinreplytorothbard.htm
https://mises.org/library/konkin-libertarian-strategy
https://hoppean.org/article/defending-rothbards-response-and-an-analysis-of-agorist-class-theory
https://www.lewrockwell.com/2016/11/jeff-deist/time-rebrand-libertarianism/
https://mises.org/library/myth-and-truth-about-libertarianism
https://hoppean.org/article/on-individualism-and-collectivism
http://archive.is/NRa7H
https://www.frontiermyanmar.net/en/myanmars-thriving-black-market-then-and-now/
