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A. C C
ARSON S
R
EJOINDERS
K
EVIN
A. C
ARSON
1. R
EJOINDER

TO
M
URRAY
R
OTHBARD
T
HIS IS NOT
,
PROPERLY
speaking, a rejoinderobviously, since
Rothbards article predates my book. But since it was chosen to set
the tone for this symposium issue, and includes some comments on
individualist anarchism in general, Ill make a few remarks anyway.
On the land issue, I reserve comment, since that is also the focus
of Roderick Longs review. I merely observe that characterizing the
Ingalls-Tucker doctrine as a limit on the landlords right to dispose
of his justly-acquired private property begs the question of just
how property is justly acquired.
On money and banking issues, Rothbard made the mistake of
interpreting the Greene-Tucker system of mutual banking as an
attempt at inflationary expansion of the money supply. Although the
Greene-Tucker doctrine is often casually lumped together (in a
broader category of money cranks) with social crediters, bimet-
allists, etc., it is actually quite different. Greene and Tucker did not
propose inflating the money supply, but rather eliminating the
monopoly price of credit made possible by the states entry barriers:
licensing of banks, and large capitalization requirements for institu-
tions engaged in providing only secured loans. Most libertarians are
familiar with such criticisms of professional licensing as a way of
ensuring monopoly income for the providers of medical, legal and
other services. Licensing and capitalization requirements, likewise,
Kevin A. Carson lives in northwest Arkansas. He is affiliated with the
Voluntary Cooperation Movement, the Industrial Workers of the World, and
the Blogosphere of the Libertarian Left. He owns the websites Mutualist.Org
(www.mutualist.org) and the Mutualist Blog (http://mutualist.blogspot.
com), and is currently researching a book on the anarchist theory of organi-
zational behavior.
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S enable providers of credit to charge a monopoly price for their serv-
ices.
In fact, Rothbard himself made a similar analysis of the life
insurance industry, in which state reserve requirements served as
market entry barriers and thus inflated the cost of insurance far
above the levels necessary for purely actuarial requirements
(Rothbard 1977, p. 59).
And B�hm-Bawerks originary rate of interest was by no means
a complete answer to Greene and Tucker. Aside from the monopoly
premium made possible by the states banking laws, over and above
the originary rate of interest, B�hm-Bawerk himself admitted that
time preference might vary in steepness with ones economic secu-
rity and independence. Since, as the individualist anarchists argued,
the states policies render capital artificially inaccessible to labor and
increase labors dependence on the owners of capital, the time pref-
erence of laborers is artificially steep.
2. R
EJOINDER TO
B
OB
M
URPHY
My favorite part of Murphys review is his repeated reminder, at the
outset, that Carson is not a crank. I may use that as a blurb for the
next printing of my book. Recently science fiction writer Ken
MacLeod, who had bought a copy of my book not long before, men-
tioned in his blog that a new collection of articles from Reason was
the only libertarian paperback on his shelves whose cover didnt
holler of crank. So Murphys reassurance is doubly welcome.
The central area of disagreement between us concerns the impor-
tance of the exceptions to the cost theory of value. We have, it
seems to me, a largely semantic disagreement on whether they are
exceptions or simply secondary deviations from a primary law;
and the significance that attaches to them, whether exceptions or
deviations, is mainly a matter of subjective emphasis. Unlike
Murphy, I prefer to regard the exceptions as second-order scarcity
deviations. The validity of the central insight of classical political
economy, that price is always tending toward a natural value deter-
mined by cost, with secondary fluctuations caused by scarcity rent,
is unimpaired. And Marshalls analogy of ripples on a pond, or of a
swinging weight, is still admirably suited to describing real-world
phenomena. The cost factor and scarcity rents are of entirely differ-
ent orders of significance, being (respectively) a fundamental under-
lying tendency and a secondary disruption of that tendency.
Murphy writes:
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a cost theory of (exchange) value entirely neglects the role of subjec-
tive valuations in the formation of market prices. Human actors are
forward looking, and hence past expenditures and effort are irrele-
vant to the present determination of the relative merits of two dif-
ferent commodities. Even if all memory of previous expenditures
were suddenly lost, market prices would still form.
Entirely neglects!?? Im flabbergasted. I specifically addressed the
issue of sunk costs in chapter one, along with the operation of the
law of value through forward-looking behavior. Even Friedrich
Engels acknowledged (in his Preface to Marxs critique of Proudhon,
The Poverty of Philosophy) that the market price of already-produced
goods informed the producer, ex post facto, of the amount of socially
necessary labor embodied in it, and thus influenced his prospective
decision of how much to produce in the future.
In present-day capitalist society each individual capitalist produces
off his own bat what, how and as much as he likes. The social
demand, however, remains an unknown magnitude to him, both in
regard to quality, the kind of objects required, and in regard to
quantity. . . . Nevertheless, demand is finally satisfied in way or
another, good or bad, and, taken as a whole, production is ulti-
mately geared towards the objects required. How is this evening-
out of the contradiction effected? By competition. And how does
the competition bring about this solution? Simply by depreciating
below their labour value those commodities which by their kind or
amount are useless for immediate social requirements, and by mak-
ing the producers feel . . . that they have produced either absolutely
useless articles or ostensibly useful articles in unusable, superflu-
ous quantity.
[C]ontinual deviations of the prices of commodities from their val-
ues are the necessary condition in and through which the value of
the commodities as such can come into existence. Only through the
fluctuations of competition, and consequently of commodity
prices, does the law of value of commodity production assert itself
and the determination of the value of the commodity by the socially
necessary labour time become a reality. (Marx and Engels 1884, pp.
28687)
It is precisely through such subjective evaluations, in response to
market price signals, that price moves toward cost. Of course market
prices would form in Murphys collective amnesia scenario; but
unless the acquisition of new knowledge from experience were sup-
pressed, the prices of reproducible goods would again start gravitat-
ing toward production cost, as producers responded to ongoing
price signals. 100 J
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Murphy writes that the cost theory applies only to the prices of
reproducible goods, and can only explain the natural (long-run)
price of a good. The classical political economists admitted as much.
Ricardos cost theory, which incorporates scarcity, can explain day-
to-day fluctuations in market price. Cost theories assert only that
cost is the natural equilibrium value that price always tends toward,
despite constant disruptions by the forces of supply and demand.
And those disruptions, indeed, are the mechanism by which price
moves toward cost.
He also faults me for charging B�hm-Bawerk with a straw man,
over Ricardos treatment of scarcity exceptions. B�hm-Bawerk
specifically referred to Ricardos acknowledgement of the scarcity
exceptions, Murphy writes, and therefore cannot be accused of mis-
representing Ricardo. But where B�hm-Bawerk erred, I think, is in
his view of the significance of those scarcity deviations for the over-
all validity of Ricardos thought. In the passage Murphy quotes,
B�hm-Bawerk wrote:
Ricardo himself only went a very little way over the proper limits.
As I have shown, he knew right well that his law of value was only
a particular l