“That’s Not Real Capitalism” – a Herculean Hurdle

A few months ago, I got chatting to some representatives of the Socialist Workers Party at their table on one of Cardiff’s high streets. Not knowing anything about them, I asked the usual cursory questions: “Are you Marxists? How do you feel about Stalin’s legacy? Are you Trotskyists? What’s your position on Lenin?” As I expected, the SWP represent that strain of communism that view Lenin and the October revolution as a heroic working-class uprising, that was sadly reversed by Stalin. If only Lenin were still alive, if only Trotsky assumed power, then the communist utopia would have arrived as Marx had prophesied. One thing they said that I hear quite often and find especially annoying is that the Soviet Union under Stalin was not communist but merely “state capitalism.”

Enter the ‘not real communism’ fallacy. Perhaps it would be a forgivable mistake, for a Western sympathiser of communism in the 1920s to see the misery and starvation caused by Lenin and assume that this was due to Lenin as an individual and a tyrant, and not anything to do with the Marxist precepts themselves. But once Stalin had arrived, and Mao kicked off the great leap forward and the cultural revolution, and Pol Pot established Democratic Kampuchea, to say nothing of Hoxha, Ceausescu, Castro and the rest, there comes a point where that excuse no longer works. Eventually, you have to consider that there might have been something wrong with the principles of communism to begin with.

Jordan B. Peterson, professor of psychology at the University of Toronto, made the strongest case against the “not real communism” fallacy that I’ve ever come across

This much is already clear to anybody that considers themselves to be a libertarian, a capitalist, an anti-communist, whatever the case may be. It’s absolutely clear that the “that wasn’t real communism” excuse is a fallacy. The problem we face, is when people then turn this sentiment over onto capitalism, and I will admit that while I think they’re wrong, it’s a difficult position to refute.

Take that one quote from Ron Paul, that “capitalism should not be condemned, as we haven’t had capitalism.” Of course, what he means by this is that most (all?) countries purporting to operate their economy by capitalism are really practicing a kind of ‘crony capitalism’. This is hardly the sort of capitalism that libertarians identify with, in fact, most would say that it “isn’t real capitalism.” Hans-Hermann Hoppe takes this line, defining crony capitalism as “conservative socialism.” Even when it isn’t stated explicitly, this tends to be the way that many libertarians, anarcho-capitalists etc. think. The problem arises, of course, when engaging with an anti-capitalist who points to all of the “failures” of free markets in Western countries, the banker’s bail-out being an obvious example of this. If I ever find myself having such a discussion with a socialist, I find myself falling back on the line “that isn’t real capitalism” or “that isn’t pure capitalism, not the kind of free markets I believe in.” Whilst this is absolutely true, and I stand by it, I can’t help but think it rings as hollow as “that’s not real communism” as far as a socialist is concerned. And why wouldn’t it?

We can point to examples of great free market systems that don’t necessarily lead to Walmart and Coca Cola, but what good is that? For somebody that already has a disposition against capitalism to begin with, why would this be any different from a communist pointing to the Kibbutz communities of Israel as a contrast against the Soviet Union and Democratic Kampuchea?

I don’t have a good answer for this, though it no doubt exists. What I do know is that arguments like “that’s not real capitalism, that’s crony capitalism, that’s actually a form of socialism” is about as useless an argument in this debate as a socialist saying “that’s not real communism, that’s actually a kind of capitalism, state capitalism.” This, I think, is a hurdle of Herculean proportions for libertarians that actually want to convince people that collectivism and central-planning don’t work and can never work. This is one of the reasons (amongst many others) why I try not to identify with either left nor right, and probably why certain left-libertarians like Kevin Carson make a distinction between free markets and capitalism, using the term capitalism to describe nominally “free” markets that suffer from heavy state intervention. This is a good enough approach, but wouldn’t really work unless this nomenclature was adopted by the entire libertarian movement (which it never will, and I wouldn’t like it to anyway).

I don’t know what the answer to this problem is, but it is a problem none the less. Socialists will always see truly laissez-faire markets as “theoretical capitalism” as opposed to the actual, tangible, visible state-controlled “capitalism” that already exists. And so long as this perspective persists, it’s going to be almost impossible to convince a committed socialist or even an anti-capitalist anarchist that markets are their friend.


3 thoughts on ““That’s Not Real Capitalism” – a Herculean Hurdle”

  1. Would it be OK if I cross-posted this article to WriterBeat.com? I’ll be sure to give you complete credit as the author. There is no fee; I’m simply trying to add more content diversity for our community and I enjoyed reading your wovrk. If “OK” please let me know via email.



  2. I’ve had the same problem, but believe I found a solution akin to the Zeno’s Paradox solution. Ayn Rand wrote the non-aggression pledge back when Yanks/Brits were still hanging Germany’s Christian National Socialists (religious conservatives, see nobeliefs.com). What I do is ask for the general definition of government. Once I realized it was a monopoly on the forcible restraint of men, and ought to protect rights against aggression, then the practical definition of “libertarian” became the limit as dt approaches infinity of today’s laws minus laws that endorse aggression as eliminated by the pressure of spoiler votes. This is a smooth function with no discontinuities. So as a derivatives problem, Achilles can now outrun the tortoise without necessarily reaching the far quadrant corner of the libertarian square on a Nolan Chart. Since Socialism is government control of trade plus ownership of means of production, the closer to that ideal coercion brings them, the realer their communism. Lay socialists (progressives) and religious conservatives (fascists) believe that freedom and rights are divisible, not absolute. So their quibbling will never go anywhere and they studiously avoid all clear declarative statements and definitions. Libertarians and totalitarian socialists/communists realize that rights aren’t divisible and can therefore at least communicate other than as hypocrites. Imagine a four-square matrix defined by two dimmer light switches. An individual’s place on the Nolan Chart then varies with both definition and definiteness of convictions, as More x Less economic versus personal coercion is explored. A straight line would work only if rights and freedom were indivisible, with liberal/libertarian freedom at one end and all forms of totalitariansim at the other. That would not fit the Hitler=Right Stalin=Left false dichotomy looters so admire.

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  3. Compare: in recent centuries, “anarchist” was the name applied to a “communist” once he had already shot or hurled a bomb at some big-shot. It is a definitional form of transubstantiation.


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