Тег: Monopolies

How the state and big business pressure private farming

A huge scandal recently erupted: numerous videos have appeared online showing veterinary services seizing and destroying livestock from farmers and private household owners in various regions of Russia. People are attempting to block roads and protest, as for many families, this is their only source of income. Formally, the reason given is an outbreak of an infectious disease, but farmers claim they are not shown test results or given explanations of the diagnosis, and state veterinarians arrive without any documentation. At the same time, similar measures are not applied to large agricultural enterprises, even when they are at the epicenter of the alleged outbreak.

Of course, this is a very alarming situation in its own right. However, it is far more important that it illustrates a broader trend: in many countries, state laws and practices are aimed at the total destruction of private farming and personal households.

One of the most common tools is seed regulation. For example, in Russia, agrarians are required to enter information about purchased and used seeds into special state registries and comply with numerous requirements regarding their origin and quality. Formally, this is explained as a fight against counterfeits and plant diseases. But in practice, such a system creates an unsustainable bureaucratic burden for small farms, which, unlike large agro-holdings, cannot afford to maintain an entire legal department. There are also restrictions on the import and use of seeds, which simply leave farmers with very few opportunities and choices for developing their farms, thereby once again making them unable to compete with large players.

Similar logic works in Europe. Under EU legislation, many types of seeds that are sold or distributed must undergo official certification and quality checks. This means that growing and trading non-certified varieties becomes practically impossible. Moreover, using one’s own seeds even in a personal garden can be prohibited and punishable, and seeds for this purpose must be bought at an exorbitant price from state-licensed suppliers. One should also recall the unbearable environmental requirements and the high-profile case from the Netherlands, where after the introduction of new environmental standards in 2022, it turned out that small farms simply would not be able to afford them and would have to close.

Such laws have an obvious economic effect. Large agro-holdings easily adapt to new requirements: they have lawyers, laboratories, and access to certified planting material. Even if some laws make their lives slightly more difficult, it must be understood that for small farms, they will be completely fatal, as the latter do not have huge incomes and savings. This is why every new regulation, license, or requirement hits small farms disproportionately. For corporations, it is just another line in the budget, while for a family farm, it is a question of survival.

As a result, the agricultural market is gradually concentrating in the hands of increasingly larger players. This is the result of a typical symbiosis between the state and big business. The state bureaucracy gains the ability to keep everything under its control since only a very limited number of agents remain in the market, and the population as a whole becomes unable to even provide for its own food. Meanwhile, large companies get the opportunity to become monopolists, meaning they can manipulate the quality, volume, and price of products as they wish and keep all possible income from agricultural activities for themselves.

The more regulations there are around food, the fewer people can produce it independently. Consequently, more power over food and people themselves ends up in the hands of the stationary bandit and large corporations. This is why the right to grow one’s own food is not just an agricultural topic, but directly a question of economic and personal freedom.

Voluntarist, Bitarch

The question of the monopoly on violence

Recently, I came across an interesting criticism of ancap. The gist is: you believe that the market will solve everything, and that monopolies shouldn’t be touched because they are inefficient and always eventually collapse. So why are you picking on the monopoly on violence? It will collapse on its own too. Either admit that monopolies aren’t collapsed by the market themselves, or that violence is a special, separate type of service that should only be managed by the state.

Is there any answer to this argument?

Querens

Monopoly in conditions of free market entry is a rather conventional concept; everyone tries to establish their own arbitrary criterion for what percentage of the market should be considered a monopoly. Again, the boundaries of the market are also taken from thin air. For instance, on the scale of Montenegro, if you try hard enough, you can see a monopoly on violence held by the Montenegrin state. But on a planetary scale, you can’t see one even with superpowers.

Therefore, it seems more convenient to me to speak not of monopolies, but of the optimal size of an organization. In given conditions, there is always a certain size of organization (determined by the technologies it uses and those used by others, population density and characteristics, landscape, history, and a host of other factors), beyond which the organization is forced to spend disproportionately large resources to maintain its own structure and activity; conversely, if the organization is smaller than the optimal size, growth proves beneficial because the organization’s activity brings a greater effect with relatively lower resource expenditures.

A hairdressing business has its own optimal size, as does a business producing microchips or airliners. Similarly, in these specific conditions, the business of organizing coercion will have its own optimal size. God is on the side of the larger battalions, but the technology of assembling large battalions is a very non-trivial thing.

The Neolithic agricultural revolution made it possible to coerce the inhabitants of fertile lands to grow grain, deliver it to state granaries, and then assemble into large battalions that could eat this grain on the march and crush small barbarian tribes by sheer mass, turning them into slaves or subjects who became new farmers. But on barren lands where grain does not grow, the state did not take root, and various highlanders are still considered less civilized—that is, less shaped for state needs (this was a brief summary of James C. Scott’s book “The Art of Not Being Governed“).

Nowadays, the financial system plays the role of grain. Whoever’s economy allows for the extraction of more resources for state needs can afford more expensive military toys, as well as fashionable soft-power tools—and that party secures that very monopoly on violence in a more complete volume and over a larger area.

Libertarians are a modern remake of those same barbarians described by James Scott, who sought to retreat to areas where grain doesn’t grow and where the hand of the state—in the form of censors, tax collectors, recruiters, and other unpleasant types—hardly reaches. Only now, instead of potatoes and other yams, they grow their bitcoins, which are useless for state needs, cook up their tokenomics, which are useless for the state, corrupt the tax collectors, refuse to work in the army or police, remain indifferent to patriotic slogans, but are keenly interested in all sorts of technological innovations useful to them, even if for some reason they are being banned.

Now, I will answer the question itself. Monopolies (including the monopoly on violence) do not collapse on their own; they are helped by the invisible hand of the market. But this hand consists of many elementary actions of all those for whom this monopoly is an inconvenience. And the invisible boot of the state consists of many elementary actions of those who profit from the monopoly on violence. The only thing that large battalions handle very poorly is guerrilla warfare, plus sabotage. This is a complex technology of decentralized resistance, and that is exactly what we are developing.

See the monopolist of violence? Can you hit them in the eye?

Who benefits from regulations and what threat they may lead to

Voluntarist, Bitarch

Who is always the first to demand the introduction of new taxes? And who demands the introduction of new laws regarding the regulation of the economy and the market? Etatists will say that ordinary citizens are primarily interested in this for the sake of protecting their interests, ensuring security, and providing social benefits. But such an answer would be foolish, because the correct answer is large corporations, which are literally “in bed” with the state.

Why did Jeff Bezos—founder of Amazon, a company that writes off its profits as expenses to avoid paying taxes—support the increase of corporate taxes in the USA? To any sane person, it will be obvious that this is necessary to eliminate competitors in the market. But that is an old story; there is a more current example—well-known corporations and billionaires, such as Elon Musk and Microsoft, are actively calling for the regulation and limitation of the development of Artificial Intelligence. All of this, of course, they justify by the alleged need to ensure safety, since AI is so far a technology that is not fully understood, including in terms of risks. But such words sound like a fabricated excuse; moreover, why would major market players limit a technology upon which they can make money? Obviously, the point is to prevent private developments in the field of AI from entering the market; many small companies simply will not be able to afford the regulations, whereas large corporations will easily handle them. It is especially worth noting that those calling for the regulation of this field are themselves extremely active in its development.

The drive toward market monopolization is clear, as are the results of this process. Due to the lack of competition, everyone will only become poorer, and technological progress will be stunted. But the problem is not only this; there is a far more terrifying scenario. If AI technology truly carries some danger, then it would be extremely foolish to try to limit it, especially in developed Western societies where law-abiding citizens, who do not seek to harm anyone, will indeed follow the regulations. However, those who wish to use AI to cause harm will not follow the regulations. This applies to government authorities and their various structures. And it especially applies to those structures that are not under the control of Western jurisdictions at all. Some hackers from North Korea, already famous for hacking and stealing funds from crypto exchanges, persecuting people, and attempting to breach the defense networks of other countries, spit on Western bans; they will actively develop and use AI to cause harm to others. And military structures everywhere will certainly use AI, and even if the West bans its own military from doing so (and even that is a doubtful scenario, as the military usually has a completely free hand in such matters), jurisdictions hostile to the West will engage in it. In the end, only the civilian sector and the development of AI tools that could be used to counter AI threats will suffer from the bans and regulations.

The ability of large corporations and monopolists linked to the state to promote favorable regulations through it not only harms everyone economically, but can also jeopardize the very security for which all of this is allegedly being done. And will anyone still justify the very existence of stationary bandits and their ability to impose bans on everyone after this?

Private monopolies pose no threat to you

Voluntarist, Bitarch

One of the claims against a free society is that monopolies cannot be avoided because there are certain physical limitations. For example, it is unlikely that several companies providing water or electricity could operate in a single building simultaneously. Living in a certain place, you will in any case have to accept that some services will be provided by only one supplier, meaning they will be able to manipulate the prices and quality of these services as they please, since you will still have no way to opt out due to a lack of alternatives. This is why political control and regulation of the activities of some service providers are necessary.

This argument often confuses many supporters of the ideas of freedom, but the answer is actually quite obvious. Let’s consider what happens when a state-owned company (or a state-regulated private company) and an independent private company try to inflate the prices of their services and lower their quality.

If you cannot simply switch to an alternative, people in such a situation usually begin to boycott the unscrupulous service provider. They stop paying them money, organize rallies at their offices, block entrances—in short, they hinder the organization’s ability to continue its activities in every way possible until the problem is solved. How, exactly, does a boycott affect the activities of different types of companies?

For a state-controlled company, a boycott is not scary at all. It can always receive subsidies from the state to cover all associated costs. People are more likely to give up and accept high prices and poor service quality than the boycotted company is to suffer any damage. Of course, there is a chance that through their boycott, people can influence political power, but even in such a case, improvements are not guaranteed. Most likely, one politician will be replaced by another who promises improvements to appease the people, but will also do nothing much himself.

For an independent private company, a boycott is quite critical. It can rely only on its own income, which simply will not exist in the event of a boycott. There is no one to provide it with subsidies. Any unwillingness to please consumers can lead to bankruptcy. The company would have to be run by complete idiots not to react to a boycott appropriately, as anything else would lead to a loss of profit. But even if there are actually idiots there—this company will simply go bankrupt, and another company with more adequate management will take its place.

As we can see, private organizations are quite easy to boycott, even if they hold a monopoly position, because their profit still depends on voluntary payments from customers and the fact that they will not hinder the company’s work. Boycotting state-controlled companies is almost useless, because they do not care if they do not receive profit through market means—they will receive it from your taxes.

The conclusion is simple: natural monopolies arising in a market environment do not threaten you in any way, because you always have the option to boycott their activities. However, you have almost no chance of defeating a state monopoly and demanding that it fulfill its duties with quality.