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Economic Withdrawal

By David Kendall

06 January, 2009

"Good God, what suffering, what martyrdom all this involves! To be occupied night and day in planning to please one person, and yet to fear him more than anyone else in the world; to be always on the watch, ears open, wondering whence the blow will come; to search out conspiracy, to be on guard against snares, to scan the faces of companions for signs of treachery, to smile at everybody and be mortally afraid of all, to be sure of nobody, either as an open enemy or as a reliable friend; showing always a gay countenance despite an apprehensive heart, unable to be joyous yet not daring to be sad!"

No, this is not a description of the average American workplace, though a disturbing resemblance is profoundly unmistakable. Rather, the above text is a description of life under tyranny from the "Discourse of Voluntary Servitude" written by Etienne de La Boetie in approximately 1552. [1]

Has "life" really changed that little in the course of 500-years? "Good God", indeed.

Does it really have to be this way? Not at all, according to David Schweickart, professor of philosophy at Loyola University in Chicago and author of the book "After Capitalism". [2] Though Schweickart's book was published in 2002, I didn't discover it until about a year ago in my continuing search for a viable "alternative" to Capitalism. But while I enthusiastically applauded Schweickart's outline of "Economic Democracy", [3] [4] I was still left wondering about an effective strategy for getting "from here to there".

"How in the world can we get from here to there, from a world of tyranny to a world of freedom?" This is just one of the many questions discussed by Murray N. Rothbard in his 1975 critique of La Boetie entitled "The Politics of Obedience". For a number of reasons, I found myself cheering once again as I read Rothbard's analysis: 1) Tyranny cannot exist without public consent, and is therefore entirely retractable; 2) Rejection of tyranny does not necessitate "anarchy" or a rejection of all forms of government; and 3) "If a free society were ever to be established, then, the chances for its maintaining itself would be excellent." [5]

But perhaps the most exciting conclusion to be drawn from Rothbard's essay is:

"If tyranny really rests on mass consent, then the obvious means for its overthrow is simply by mass withdrawal of that consent. The weight of tyranny would quickly and suddenly collapse under such a non-violent revolution."

This analysis aligns nicely with Martin Luther King's suggested "economic withdrawal". While Dr. King's original intent might have been temporary leverage for negotiation based on consumption (i.e.; boycott), [6] his wife Coretta later expanded the idea more universally to suggest withdrawal from the system itself in the democratic interest of one person, one vote. [7] Based on some fundamental assumptions regarding Capitalism, I have long believed such withdrawal from the existing system should be permanent and rooted in production. As Rothbard suggests, "Tyrants need not be expropriated by force; they need only be deprived of the public’s continuing supply of funds and resources".

The greatest "resource" in any society is the capacity of human beings to produce more than they are able to consume. Throughout human history this capacity has been routinely expropriated by tyrants through the systems of Slavery, Feudalism or Capitalism -- all of which amount to some form of mass enslavement. The main differences are that with each systemic evolution, 1) the "leash" gets a little longer and 2) exploitation becomes a little more obscured -- immeasurably expanding production and the disparities of wealth and income. To minimize those disparities and to bring production into more sustainable balance with nature, the next step is for society to snap the leash (umbilical cord) altogether by withdrawing consent for enslavement.

But Rothbard and La Boetie further observe a strategy is needed that must be initiated by a "cadre" to educate the masses about an alternative society. Withdrawal from the existing system (Capitalism) is impractical if not impossible without developing a alternative system. I would carry this one step further to suggest a strategy usually involves a target. Capitalism conveniently provides one called -- "the workplace".

Specifically, the root of Capitalism is unequal exchange -- an inherently adversarial relationship -- between workers and employers called "wage-labor". Workers receive relatively fixed "wages" for their productive activities while passive owners called "employers" take the rest. Though wages are supposedly intended to be sufficient to keep workers alive so they can return to work the next day, this is not always the case. In fact, modern workers typically find themselves working more than one job and incurring bank debt (plus interest) just to pay the rent or mortgage and to keep their families fed. As La Boetie suggests,

"The fools did not realize that they were merely recovering a portion of their own property, and that their ruler could not have given them what they were receiving without having first taken it from them".

The most obvious withdrawal strategy in all these regards is to simply remove both wages and employers from the workplace altogether, transforming the existing system of wage-labor to a far more democratic system of "Worker Cooperatives". This strategy doesn't solve all the world's problems overnight, particularly the ecological ones for which there may be no human solution. But it does directly target the heart of Capitalism, which is the root of virtually every modern problem known to mankind including ecological imbalance. This is a tangible way for the "cadre" -- the "vanguard" of the movement as Rothbard calls them (us) -- to effectively and nonviolently withdraw our support from the existing system in favor of a new one.

Until I saw Rothbard's use of the term "cadre" I had often considered this group a "catalyst" that both initiates and accelerates a chemical (or socioeconomic) reaction. The term "economic catalyst" is is widely used in in the field of economy to describe entrepreneurs or companies who precipate a fundamental change in business or technology. [8] But both terms seem extremely applicable, as "cadre" is a nucleus of military personnel capable of expansion; a small unit serving as part of or as the nucleus of a larger political movement. Rothbard also uses the term "vanguard": the position of greatest advancement; the leading position in any movement or field; the leading units moving at the head of an army; any creative group active in the innovation and application of new concepts and techniques in a given field.

All these terms suggest a need for some group of people who "understand the reality of the situation" -- "who feel the weight of the yoke and cannot restrain themselves from attempting to shake it off" -- to collaboratively lead the way in educating others. The general challenges for this group are not merely to deride the government or the existing system, but to effect nonviolent revolution by 1) generating "refusal of consent among the mass", and 2) splitting off "a portion of the disaffected privileged bureaucracy".

But education cannot begin until someone actually wants to learn. So the "cadre" must be prepared not only to teach, but also to present a real-world antithesis -- a sparkling new example -- which is significantly more attractive than the existing status quo. Thus, any sort of nonviolent "revolution" must be a program of attraction rather than promotion. Unfortunately, this presents a number of real-world problems. Let's first discuss those suggested by Rothbard and La Boetie, and save the biggest one for last.

Rothbard suggests the cadre, "however numerous they may be, they are not known to one another; under the tyrant they have lost freedom of action, of speech, and almost of thought; they are alone in their aspiration". But Rothbard's essay is dated 1975, La Boetie wrote his in the 16th Century, and neither had access to a modern wonder called the "Worldwide Web". Whether or not the Internet will eventually prove to be a means of organization amongst the cadre remains to be seen. Meanwhile the Internet seems bloated with an endless critique of "errors committed by the government", summarily dismissed by Rothbard because:

"... much of what the State does is not an error at all from its own point of view, but a means of maximizing its power, influence, and income. We have to realize that we are facing a mighty engine of power and economic exploitation, and therefore that, at the very least, libertarian education of the public must include an exposé of this exploitation, and of the economic interests and intellectual apologists who benefit from State rule. By confining themselves to analysis of alleged intellectual “errors,” opponents of government intervention have rendered themselves ineffective".

I would take Rothbard's observation a step further to argue such confinement also maintains divisions amongst very intelligent people whose energies might be extremely effective in developing an alternative system if they weren't routinely squandered in the incessant critique of externalities that are entirely intractable under Capitalism. In my view, this arrogant and pitiful waste of human resources gives "the left" (whatever that is) a hard-earned and well-deserved bad name -- "ineffective" at best.

So let's turn now to the biggest challenge confronting the cadre in developing a program of attraction rather than promotion. First, let's clarify that any mention of the "cadre" in this discussion refers specifically to 1) people who are already members of worker cooperatives or who are otherwise involved in the cooperative movement, and 2) those who would like to become involved.

While existing worker cooperatives are surprisingly numerous, and they consistently perform at least as well as their capitalist counterparts (often better), worker cooperatives do not tend to expand. [9] This dynamic might seem extremely favorable from an ecological perspective, but it's not at all useful in developing a cooperative movement. The problem is not that worker cooperatives don't exist or that they aren't viable. The problem is that outsiders who enthusiastically want to get involved, don't have ready access to the cooperative movement.

But if democratic firms don't expand, then the alternative is to form more democratic firms. While the nonexpansionary character of worker cooperatives seems desirable for many important reasons, the overall movement must deliberately expand to eventually dominate Capitalism. Otherwise, the "movement" is pointless.

So moving from the abstract toward the concrete, lets assume that conversion of established workplaces from wage-labor to Worker Cooperatives will not be cost-free. Let's further assume the establishment of new worker cooperatives is even more difficult and costly.

Where will the funding come from?

Can we expect the existing financial system (privately-owned banks) to support such a radical idea? Perhaps some will, and some cooperative organizations might have already secured such traditional funding. But lets reasonably assume a complete lack of cooperation from traditional finance. Where can funding be derived for the conversion of existing enterprise to Worker Cooperatives or for the founding of new Worker Cooperatives?

David Schweickart's outline for "Economic Democracy" suggests democratizing investment. In other words, "generate investment funds by taxing enterprises (a flat-rate capital-assets tax is optimal), then return the proceeds to regions on a per-capita basis to be reinvested in the local economy". [9] One attraction to this scenario is it eliminates the whims ("animal spirits"?) of wealthy tyrants ("private investors"?) from the economic system altogether, resulting in far greater economic stability, overall. Another attraction to this approach is that we stop taxing people and start taxing capital, thus bringing capital subordinate to people in a more natural hierarchy of sovereignty, where Nature begets People begets Capital. The latter is my interpretation, not necessarily Schweickart's intent.

But despite the exciting potential in David Schweickart's proposal, this sort of financial system is not yet in place. While his vision for a far more balanced economic system seems infinitely intriguing, what is the best course of transition between "here" and "there"? What is the most viable transition between Capitalism and Economic Democracy?

New organizations like the Grameen Bank and the Common Good Bank promise noble aims in terms of public ownership, democratic approach, community cooperation and regional focus. But the business models of these "banks" are still rooted in fractional reserve and interest with the ultimate aim of making a profit. Considered usury by some critics, this raises at least one objection: Why does any bank need to make a profit? Since banks traditionally don't produce anything but debt, this seems a valid question.

The most important distinction between traditional banks and the Common Good Bank model is shareholder value versus the common good. The ultimate goal of traditional banks is to generate income for a passive group of owners called shareholders. But since Common Good Banks are owned by local depositors, not a small group of corporate shareholders, all proceeds go to the community, hence "the common good". While the Common Good Bank must avoid losing money, the bank itself does not need to make a profit. So, much like worker cooperatives, growth is not an imperative as it is with traditional banks.

Still in the planning stages, however, the Common Good Bank is not yet open for business. All this in mind, a friend of mine offered another suggestion recently, and it's worth serious consideration:

"I think worker cooperatives are a really excellent idea. Of course the currency and exchange problem would still be there; i.e., there would have to be a monetary system, which should properly be controlled by the cooperatives themselves rather than some outside authority. And the availability of money should be backed by production, not financial, values." [10]

From this perspective, we can envisage a truly parallel system of business -- one that deliberately competes with the existing system, growing daily from the inside out, even as the "shell" of the old system crumbles all around us. As Mahatma Ghandi and others have suggested, let's "build a new society in the shell of the old".

To conclude, all these questions strongly indicate that the education suggested by both Rothbard and La Boetie must begin within the "cadre" itself. G. Edward Griffin effectively summarizes with the following observations:

"There is no point in worrying about the erosion of personal freedom that is the reality of our present era if we can do nothing about it. They say that knowledge is power, but that is one of the greatest myths of all history. Knowledge without action is useless and leads only to apathy and despair. So the question is: what type of action can reverse this trend? Writing letters and signing petitions to the same people who have created the problem is not going to do it. Voting for candidates selected by power brokers with hidden agendas will not do it either. There have been many proposals to reverse the tide of totalitarianism but, after decades of effort, none of them have worked." [11]

At the most basic level, the cadre must understand that tyranny rests on mass consent and its overthrow will be accomplished only by mass withdrawal of that consent. Further, as long as labor is a cost of production employers will be highly motivated to drive wages as close to zero as possible. So the best way to end this struggle is for workers to simply " fire their bosses" [12] and to democratize both the workplace and finance. The people who are already members of existing Worker Cooperatives are indeed the "cadre", and these people must somehow become aware of their potential impact on society and begin to collaborate with other Worker Cooperatives to expand the cooperative movement and provide ready access for new participants.

David Kendall lives in the state of Washington and is concerned about the furture of our world.


[1] De La Boétie, Étienne (1552). "The Politics of Obedience: The Discourse of Voluntary Servitude".

[2] Schweickart, David (11/26/2008). "Bailout!". OpEd News.

[3] Schweickart, David (June 2002). "After Capitalism". Rowman & Littlefield Publishers, Inc. ISBN 0742513009

[4] Wikipedia, (01/02/2009). "Economic Democracy". Wikipedia.

[5] Rothbard, Murray N. (1975). "The Politics of Obedience".

[6] King, Dr. Martin Luther (1968). "I've Been To The Mountain Top". Stanford University.

[7] King, Coretta Scott (03/21/1988). "Statement by Mrs Coretta Scott King at the meeting of the Special Committee against Apartheid on the International Day for the Elimination of Racial Discrimination (Sharpeville Day)". United Nations document A/AC.115/PV.614.

[8] Wikipedia (). "Economic catalyst". Wikipedia.

[9] Schweickart, David (Fall 2008). "Is Sustainable Capitalism an Oxymoron?". Synthesis/Regeneration.

[10] Anonymous

[11] Griffin, G. Edward (2008). "An Idea Whose Idea Has Come". The Silver Bear Cafe.

[12] Freilla, Omar (2008). "Want Environmental Justice? Fire Your Boss". Race, Poverty & the Environment: A Journal for Social and Environmental Justice.

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