Free & Fair, Part IV – Counter Economics

This is Part IV of a four part series. Read Part I, Part II and Part III.

"Which government is the best? That which teaches us to govern ourselves." – Goethe

"The most common way people give up their power is by thinking they don’t have any." – Alice Walker

"The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatsoever." – Adam Smith, in The Wealth of Nations

Ages ago, when I was in college, it dawned on me that having a counter-culture was not enough. There was a thriving counter-culture in the Sixties, but over time, it became commodified and largely trivialized. The underlying structures of the economy can not only resist the strongest attacks, it can turn them to its advantage. The way to change the world is not to drop out, but to actively build a working alternative. To really make a difference, we need a counter-economy.

It was with a mix of chagrin and vindication that I discovered years later that Samuel Edward Konkin III had coined the term well before I did. He used the term somewhat differently than I did, however — he meant things that were expressly illegal, or at least under the table in the "cash economy." This might mean prostitution, guns, and drugs, but it also might mean lawn-mowers, baby-sitters, a whole spectrum of day laborers, and pretty much any economic exchange that doesn’t leave a paper trail: bartering, gifts/donations, freecycling, volunteerism, and on and on. It might sound a little questionable, but stop and think about the things that make the formal economy run: strip-mining, clear-cutting, union-busting, petroleum, genetic engineering, fast food, hostile corporate takeovers, strip malls — and above all, war. The longer you look at the orthodox economy, the better the grey and black markets look.

I produced a magazine on fair trade for exactly one year whose tag line was "The Fair Trade Journal of Applied Counter-Economics." I defined counter-economics simply as "money at the service of people, instead of the other way around." Even after learning of Konkin, I used this definition interchangeably with my criteria for fair trade: empowering workers, empowering consumers, safeguarding the environment, and buying and selling locally to the extent possible. Brad Spangler, one of a handful to pick up the torch of the libertarian left after SEK III passed on in 2004, was kind enough to describe my definition as "a separate but arguably compatible sense" of the term.

The philosophy that is most closely associated with Konkin’s use of "counter-economics" is called agorism, also known as market anarchism, or as Kevin Carson puts it, free-market anti-capitalism. I can’t call myself a full-fledged anarchist, because I haven’t completely renounced electoral politics (only the corporate-sponsored parties — you know who you are!), but in the long run, what I call myself is not as important as what I do, and what I do is promote fair trade. Fair trade is neither the black nor grey market, because it is legal. However, by definition, it challenges the dominant assumptions and structures of neoliberal economics. Even now, I’m seeing an upswing in articles all over the web challenging the validity and effectiveness of fair trade. If it continues to grow, corporations will continue trying to buy it out, and if they cannot, they will petition the government to outlaw it. Not directly, of course — it wouldn’t be seemly to pass a law against paying workers well. Rather, you’ll see laws that chip away at any market advantages that fair trade brings. For example, corporations might ask the state to limit the ways fair trade can be labeled, which would keep buyers ignorant and undermine price signals. Or, they might ask for "standards" on all businesses in a given sector — standards that only multinationals have the resources to meet. This isn’t idle speculation… it’s already happened to organics.

The agorists are right to lump the state in with the executives of trickle-up economics. Far from the enemy of big business, government is all but indistiguishable from it. As Marx rightly said, "the state is the executive committee of the ruling class." Likewise, when Adam Smith called for laissez faire — keeping the government out of the market — he wasn’t trying to defend business. He was trying to protect the consumer against collusion between the state and the wealthy. If one free person can negotiate in good faith with another free person, and not close the deal until both are happy with the terms, then the classical idea of a self-regulating market will come true. But the very purpose of the modern corporation, and the state that serves its interests, is to unbalance the equation, and strip away power from both the worker and the consumer. This is the corporate conception of a "free market," which is neither free nor fair.

I have become convinced that power, freedom, and dignity are all names for the same thing, and the surest sign you have it is that you respect it, reinforce it, and reward it in others. This is what fair trade is all about. When we buy corporate products, it accepts the power imbalance, and treats it as fair, because of our very willingness to participate on the corporation’s terms. When we buy fair trade, we reinforce our neighbors and peers, and circulate power within the community.

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7 thoughts on “Free & Fair, Part IV – Counter Economics

  1. For the ultimate in counter-economics I highly recommend this inspirational video:

    http://www.youtube.com/watch?v=nNtIsSWVJBI

    The Muslims and early Christians had it correct – usury (charging interest) is the root of all evil in economics.

    An economic system not based no-growth and no-usury is a must for permaculture communities in the future.

  2. In a way, I appreciate this series of articles, but I’m also somewhat lost.

    First of all, I DO support Fair Trade and I even encourage others to buy Fair Trade products by offering to order for others with no markup when we place wholesale orders from Frontiercoop.com (lots of organics and fair trade spices, teas, coffee).

    But let’s get real, that’s maybe .01% of what I spend in a year and it is COMPLETELY irrelevant. BTW, we’re near Kingman, AZ, USA, and there are NOT a whole lot of Fair Trade products in the supermarkets nor is there a lot of interest in Fair Trade, organics, permaculture, etc.

    So why are we talking about Fair Trade instead of alternative money, alternative communities and people and projects that actually try to make a difference?

    I know, there’s not a whole lot to write about. There are NGOs here and there and the UN has a few things going in developing countries and we even have micro bank organizations for developing countries. But while these activities may be beneficial to some villages or farmers, it doesn’t make any difference to BP or Chase or Blackwater.

    Where is my Fair Trade phone company, bank, gas station, auto mechanic, etc?

    You may not have heard of http://commongoodbank.com/ — a community bank in the planning stage for many years. They could not get the lousy $1.5 million startup capital together. In today’s economy in America, that’s spare change for many thousands of people. Not to mention the many billions of “stimulus” dollars that were wasted.

    American banking rules REQUIRE that bank investors be millionaires and OBVIOUSLY the CGB goal to distribute profits back to the community is NOT beneficial to the wealthy.

    I feel that the CGB should have been started as a credit union because NO startup capital is required for credit unions. I’m glad to see that they just recently finally came up with a way for INDIVIDUALS to invest and maybe one day they’ll have the capital to get the bank opened.

    They plan to allow account holders to form virtual branches (worldwide) and to democratically decide how to invest and/or donate profits towards projects of their choice.

    Is there ANYBODY else actually working on projects that do something for average people AND allow average people to make a difference?

    Geoff et al are going to put a dent in Monsanto profits and this site has the potential to really make a difference in agriculture and MUCH more.

    We need a similar movement for banking and an economy OUTSIDE the established systems.

    We need people like Geoff to make videos like Greening the Desert about alternative communities and economies that WORK.

  3. The Slow Money Principles:

    I. We must bring money back down to earth.

    II. There is such a thing as money that is too fast, companies that are too big, finance that is too complex. Therefore, we must slow our money down — not all of it, of course, but enough to matter.

    III. The 20th Century was the era of Buy Low/Sell High and Wealth Now/Philanthropy Later—what one venture capitalist called “the largest legal accumulation of wealth in history.” The 21st Century will be the era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place and non-violence.

    IV. We must learn to invest as if food, farms and fertility mattered. We must connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises.

    V. Let us celebrate the new generation of entrepreneurs, consumers and investors who are showing the way from Making A Killing to Making a Living.

    VI. Paul Newman said, “I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out.” Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:

    * What would the world be like if we invested 50% of our assets within 50 miles of where we live?
    * What if there were a new generation of companies that gave away 50% of their profits?
    * What if there were 50% more organic matter in our soil 50 years from now?

    See: http://org2.democracyinaction.org/o/6351/p/dia/action/public/?action_KEY=1637

    Download a PDF of the Principles HERE: http://www.slowmoney.org/uploads/1/3/6/7/1367341/principles.pdf

  4. “Human beings have broken out of the circle of life, driven not by biological need, but by the social organization which they have devised to ‘conquer’ nature.” – Barry Commoner, Ecologist

  5. “Traditional businesses follow a simple formula: create a product or service, sell it, collect money. But in the last few years a fundamentally different model has taken root-one in which consumers have more choices, more tools, more information, and more peer-to-peer power. Pioneering entrepreneur Lisa Gansky calls it the Mesh and reveals why it will soon dominate the future of business.

    Mesh companies use social media, wireless networks, and data crunched from every available source to provide people with goods and services at the exact moment they need them, without the burden and expense of owning them outright. Gansky reveals how there is real money to be made and trusted brands and strong communities to be built in helping your customers buy less but use more.”

    – The Mesh: Why the Future of Business Is Sharing: http://www.amazon.com/Mesh-Why-Future-Business-Sharing/dp/1591843715

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