Free Market Communism reading notes

Some brief notes I took while re-reading Eugene Holland’s Free Market Communism chapter in Nomad Citizenship. I keep coming back to this book and recommend it wholeheartedly.

Eugene Holland
Nomad Citizenship
Free Market Communism notes.

Distinction between markets and capitalism.

99. “The suprahuman decision making abilities of the market as a paragon of collective or distributed intelligence have long been touted, from Adam Smith’s invisible hand to Friedrich von Hayek’s notion of catallaxy.1But insufficient attention is paid by most such champions of the market to the dynamics and effects of capital accumulation, for specifically capitalist markets are not often vehicles for distributed decision making or collective intelligence but rather exercises in collective stupidity, as the effects of advertising, overconsumption, and the looming environmental crisis make patently clear.”

Holland’s key questions (following D&G’s engagement w/ Marx):
“What are the benefits of truly free free markets, that is to say, nomad markets? What impact does capital have on markets, and what makes capitalist markets different from other markets? Finally, how might markets be protected or freed from the command and control of capital to become nomad markets?”

D&G draw heavily on two Marxian concepts: mode of production and universal history

In his essay “Karl Marx,” (“KM”) from Deleuze’s Philosophical Lineage, Holland describes how D&G have adopted and transformed these concepts (In ATP, pg 435: social formations are defined by machinic processes, not modes of production – the latter depend on machinic processes).

“KM,” 151: Whereas Marx takes production to be primary element of social formation, D&G – following Nietzsche – consider debt to be primary. Each mode of production (savage, barbarian, and capitalist) has its own solution to the problem of debt: coding, overcoding, and axiomatization (machinic processes). Also parallels w/ desire and cap’s separation/segregation of repro from prod and in family.

100. Two aspects of capitalism are central for D&G. First, instead of reproducing existing power relations over new ones, it is revolutionary and subordinates political repro to econ repro: “it fosters “constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation” (Communist Manifesto). Second, qualitative codes are subordinated to quantitative/cash nexus/pure difference. [Whereas this previously seemed like a problem for my vision of thinking about urbanization and qualitative values together, I have since been able to focus on the models of realization, the integrators of difference, that “engineer” the quantitative flows].

On universal history: “History becomes universal with capitalism both retrospectively and prospectively: retrospectively because of what capitalist oppression reveals about previous forms of oppression in the very process of dissolving them, and prospectively because of the constant revolutionizing of everything that capitalism promotes through its intrinsic production of difference.”

Nomad Markets

Benefits of markets:
Principle benefit of markets is decoding, freeing desire up from illegitimate fixed representations…undoes coding/overcoding, such as infinite debt to despot, religious affinity, racial bias, etc. Market transactions: quantitative comparison over qualitative evaluation [again, this speaks to political economy of my triad…].

101. Money – not only code solvent, but power solvent…shifts who has power.

102. “Although Marx is not unequivocal in his support for the power of money in market-mediated social relations, as we shall see, he here considers them clearly preferable to earlier relations of directly interpersonal and political forms of subordination.”

Another benefit: expand social division of labor…productive multiplicity. Two reasons:
1 – less interesting: Increases the development of society’s productive forces…easy to see w/ technical div of labor, which is in turn subordinate to social div of labor which enables prod of new machinery.

2 – more interesting: social division of labor in a nomad market would be a self-organizing system of distributed intelligence and collective decision making (~autogestion). “Though Marx often distinguishes clearly between markets in general and capitalist markets in particular, as we shall see, he doesn’t appear to have foreseen the potential of postcapitalist markets to organize social production immanently.”

Marx acknowledges possibility of social organization immanent to market, but critiques from perspective of communist social relations (Several endnotes to Grundrisse).

Marx: ““there can . . . be nothing more incorrect or more absurd than to assume, on the strength of exchange-value, of money, control by the associated individuals of their collective production.” Holland isn’t concerned w/ this critique or how major Marxisms have adopted it. He writes: “The beauty and greatness of immanent self-organization are precisely what affirmative nomadology will affirm in distinguishing nomad markets from capitalist ones, even against the grain of a certain (major) Marxism.”

Who says the most about market as mechanism for distributed decision making? Hayek.

Certainly problematic, but still: “his analysis of the market as a mechanism for distributed decision making is too valuable to dismiss as mere right-wing cant (regardless of how much of this it may have inspired).”

Hayek distinguishes btwn catallaxy and economy…

A catallaxy “comprises a bigger group [than an economy] in which allocation decisions are made by a relatively large number of entities operating independently of one another and pursuing vastly differing ends and where collective decision making is left to an aggregation mechanism such as the market” while an economy is, in the Greek use of the word, household management.

Catallaxy is central for von Hayek b/c it is spontaneous order that emerges from a market. Also the Greek verb from which it derives not only means to exchange, but to bring into a community, or change an enemy into a friend.

Holland challenges Hayek’s claims that people w/ different ends are necessarily enemies and that exchange converts them into friends and asserts that catallaxies “facilitate the emergence and de velopment of a community where agreement on ultimate ends is not re quired for members’ endeavors in pursuit of disparate ends to benefit one another through a network of market exchange.

limitation of Hayek instructive b/c they typify much current thinking on econ.
1. principle: even if one could centralize all planning, would this be desirable?
2. Although he notes importance of local knowledge, he reduces everything to price
3. Market agents act on more than price info alone…: “What if market agents were expected to act not just out of self-interest and cost consciousness (as per Smith and von Hayek, respectively) but also with regard to the well-being of all? What if, in other words, market agents routinely took into account not just personal desires and price information but infor mation regarding products’ circumstances of production, conditions of distribution, environmental impact, and so on?” An approximation of the common good.

110 (recap of 3 points, this one refers to third)
“That the market economy today does not in fact operate this way is testimony not just to the historical reach and cultural force of Smith’s in junction to act selfishly, nor merely to the distorting and inflationary influence of advertising on people’s desires, but to the impact of capital on the very premises of the market itself.” (What about Smith’s Moral Sentiments?)

“What [Hayek] refuses to acknowledge is that capital inevitably concentrates and centralizes.”
“So-called free markets, then, are truly free when and only when they are completely free from capitalist command and control. Truly free nomad markets must therefore be strictly differentiated—conceptually and then actually—from capitalist markets, and it is to that task that we now turn.”

Capitalist Markets

No surprise that there is confusion between free and capitalist markets
Must examine primitive accumulation, systematization, and axiomatization

Primitive accumulation –
historical emergence of capitalism and the first stockpiles.
Two accounts of capital in marx: a closed, dialectical account (majoritarian) and open, contingent historical account minoritarian). The latter “presents capital as the fortuitous result of a chance encounter between, among other things, a critical mass of liquid wealth and a critical mass of labor with no means of subsistence.”
Latter depends on stockpiling not wealth itself, but “free” (destitute) labor – taking away the means of production. “Primitive destitution” (115)…ongoing process (covered below in systematization).
Two modes of enforcing destitution, one economic and the other extraeconomic (see Holloway and Picciotto).

two movements per Marx
1. regulation of wages by the state (to keep them at levels suitable to accumulation)
2. naturalize this system
Holland: “ [it] starts with direct political action on the part of the State, but it reaches completion with enforcement by the “silent compulsion” of economic relations themselves, once they have become systematic in fully developed industrial capitalism.”

wage slavery; belies myth of labor contract (~social contract veiling oppression by and dependence on state).

Negri’s “groundbreaking” reading of Grundrisse (Marx beyond Marx): “Money must be understood not merely as a means of circulation or a measure of value, he insists, but as the embodiment of class antagonism and a vehicle for the command of capital over labor.”

Negri: no such thing as a fair price – prices embody and conceal struggle over distro of total value. So in communism, money must be eliminated. Holland says this is a plausible but wrong reading (Grundrisse often contradictory). Marx asserts that “simple forms of exchange value and money latently contain the opposition between labor and capital” but later states the opposite “it is equally clear that the simple movement of exchange values, as it is present in pure circulation, can never realize capital.” (119). The former is a dialectical argument, while M’s elaborations on the latter demonstrate that it is mature cap’s systematicity that makes money/exchange antagonistic.
Theoretical displacement Holland is making: “the minor accounts in Marx treat the contingent historical emergence and ongoing reproduction of capitalism as a function of the initially violent yet equally ongoing dispossession of the working poor.” The challenge to this then: “the problem will be to (re-) discover means of self-provisioning that lie outside the orbit of capital, to (re-) connect with social means of subsistence not already subsumed by the capitalist system.”


What capital does to markets (systematizes them) and what escapes this process.
Luxemburg, The Accumulation of Capital: accumulation is ongoing process that always requires an outside. She was thinking about how cap needed conquest/colonialism, but Holland adds an “internal” outside to this “external” outside for today, as we see in marketing and high-tech production/distro. So cap is a process of becoming systematic (coordination that I’m focusing on w/ urbanization).
Again, M’s Capital has two accounts of origin of capital – one dialectical and one historical.

A third is in the Grundrisse: “it is an abstract schema lacking any concrete historical detail, but it charts the transformation of non- or precapitalist monetary assets into capital properly so called.” Also shows labor power as sole source of surplus value (~labor theory of value).

Cap circulation differs from mercantilism and barter b/c it is a continuous, self-sustaining circuit: systematic.

Exchange value as presupposition for this circulation.
Capital as social relation and process: “it becomes a continually self-positing and self-expanding circle or spiral that includes production, consumption-reproduction, realization, investment, renewed production, and so on:” (cites M in Grundrisse).

Turns to Marx’s account of internal dynamics of money –> cap rather than concrete details of historical emergence…begins w/ a mass of money and destitute workers.
Surplus capital I (which did not originate from exchange) thrown into circulation; then living labor becomes source of Surplus Cap II. It is, again, this second cycle that defines a truly capitalist functioning.

reminder: primitive accumulation is forcible dispossession of potential workers and their consignment to wage slavery.

products of labor appear as capital and wage labor as variable capital/
M: “In precapitalist exchange, “circulation . . . does not carry in itself the principle of self-renewal. Its moments are presupposed in it, not posited by it itself.” This completes H’s critique of Negri’s comment on money only having one face (that of the boss). He’s essentially doing the same thing to N that D&G do to Freud in AO: pointing out that the critique applies to historical circumstances rather than the nature of the object of critique (Oedipus for Freud, money for Negri).

Cap’s systematicity makes it vulnerable to contingency: overprod/undercons (crises of realization): “capital always runs the risk of not being able to sell the goods that have been produced and thereby realize in liquid (monetary) form the value incarnated in them so that it can be reinvested.” Also crises of reinvestment and supply.
Not only tendency to expand (~Luxemburg) but also toward real subsumption w/in cap, which is always disrupted by new innovations (hence axiomatic).

cap’s systematization is thus a very particular kind: “capitalism must continually rearticulate conditions of existence that are never simply given or entailed: it is not automatically self-perpetuating.” Never forms a totality, though it tries. Open ended in two senses: always conquering external and internal limits and since surplus value is pure differential, it has no substantive limits.
“the pragmatic thrust of minor or nomad marxism will not be to eliminate markets or exchange-value or commodification altogether. Instead, the problem will be how to withdraw wage labor itself from the marketplace, how to eliminate the labor market alone, while leaving most other markets intact.”

(no notes on axiomatic here)

Free Market Communism

still needed, but no longer infinite (~primitive socius). Functions through constellation of decentralized institutions/practices: credit unions and microfinance. (136) ~ markets as Hayek envisions them but without criteria being reduced to ROI. Instead, decisions made on “panoply of emphatically extraeconomic criteria.” Examples: disinvestment/SRI (Parr too)

value – freed from standard labor value and determined collectively. 138: accumulation becomes only one criteria for determining value, and is, again, determined collectively.

notion of machinic enslavement – becoming part of the infrastructure – doesn’t diminish the value of information, bur its use. If the tech/speed of amazon, for example, were to be available for collective intelligence could assist in making decisions according to extraeconomic criteria.

no wage labor, no capital
“Freeing credit from the in finite debt, freeing commodity exchange from a standardized valuation, and freeing distributed and embedded intelligence from axiomatization are all invaluable contributions—but ultimately, work activity must be freed from capture as wage labor, which is simultaneously the source of surplus-value, the key effect of primitive accumulation-destitution and the fundamental axiom of capitalism, as we have seen.”

production co-ops (self-organized work groups); multiplicity of multiplicities mediated by exchange relations.

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