Part 2 - Capitalism is not a free market

In Part 1, we looked at the state–corporate complex: the way government and big business act less like rivals in balance and more like partners in a joint venture. This part is about the mechanics of that partnership.

A 19th-century anarchist, Benjamin Tucker, tried to answer a very specific question:

If markets are supposed to be about competition, why do we see so much unearned wealth and power piling up at the top?

His answer was not “human nature” or “greed.” He pointed at four places where the state blocks free competition on purpose and hands out special privileges:

Money
Land
Trade (tariffs and similar controls)
Ideas (patents / intellectual property) ¹

He called these the four monopolies, and argued that without them, capitalism as we know it couldn’t survive. What we’d have instead is still a market economy—but with very different outcomes for workers, renters, and small producers.

You don’t need to agree with Tucker on everything to see that these four areas are exactly where modern capitalism looks least like a “natural” market and most like a rigged game.

Let’s walk through each one in plain language: what the state does, how corporate capital uses it, and how it shows up in your actual life.

1. The Money Monopoly – Turning credit into a choke point

In theory, money is just a tool. We use it to store value, trade, and make the economy run smoother.

In practice, control over money and credit is one of the main ways the state–corporate complex keeps you dependent.

What the state does

Decides what “counts” as legal money (legal tender laws).
Grants and polices banking licenses and heavily regulates who can issue credit and on what terms.
Supports a central banking system that can create money, backstop large institutions, and coordinate policy in their interests.
In many historical cases, outright punishes attempts at alternative currencies or mutual credit systems. ([The Anarchist Library][1])

On paper, some of this is about stability and fraud prevention. But the side effect is:

A small, state-approved club gets to sit at the top of the credit system.

How corporate capital uses it

If only a narrow set of institutions can create and lend money on a large scale, they get to:

Charge interest well above the real cost of issuing loans.
Decides who gets credit at what rate: big firms on friendly terms; ordinary people and small businesses on much worse ones.
Design whole industries—housing, education, healthcare—around the assumption that you’ll have to borrow at those rates.

This is what Tucker called usury: not “loaning is always evil,” but the systematic ability to profit off lending far beyond the actual risk and administrative cost, simply because competition is legally restricted. (Wikipedia)

How it hits your life

You pay credit card interest that can climb into absurd percentages if you ever fall behind.
You pay student loans that shape your job choices for decades.
You get hit with overdraft fees precisely when you have the least money, turning poverty itself into a revenue stream.
Small businesses you might start or join face hostile borrowing terms compared to giant firms that can tap cheap credit.

The result is a system where people who already have piles of money can lend it and watch it grow, while people who actually work for a living often pay a premium just for temporary access to the same medium of exchange.

In a genuinely free market for money and credit, you’d expect:

Many more forms of mutual credit, community banking, and cooperative finance.
Far more competition among lenders.
Interest rates driven much closer to the actual cost of administering loans.

That doesn’t magically solve everything, but it dramatically reduces the ability of an idle ownership class to live off other people’s paychecks.

2. The Land Monopoly – Turning the earth into a rent machine

You can’t live, work, or grow food in midair. You need land. That makes control over land one of the most powerful levers in any society.

What the state does

Enforces land titles whether or not the owner uses the land, often rooted in long histories of conquest, enclosure, or political deals.
Sends police and courts to enforce evictions and protect landlords’ claims, even on property they don’t live on or directly use.
Uses zoning laws and building codes (often written with heavy input from developers and homeowners) to restrict what can be built where. ([The Anarchist Library][1])

On the surface, you’ll hear this described as “protecting property rights” and “preserving neighborhood character.” In practice, it often means:

Keeping a class of owners in control of land they don’t personally occupy or work, and restricting new supply in order to keep rents high.

Tucker called this the land monopoly: government enforcement of land claims that go beyond genuine occupancy and use. ([The Anarchist Library][1])

How corporate capital uses it

Absentee landlords collect rent indefinitely on buildings they don’t live in and land they don’t use.
Large developers work with city governments to shape zoning so that:
- cheaper, denser housing is restricted,
- while high-margin projects (luxury apartments, office towers, etc.) are favored.
Land is held as a speculative asset, often left empty or underused while people nearby struggle to find affordable housing or workspace.

How it hits your life

Rent eats a massive share of your income, especially in desirable urban areas.
You may be forced to live far from work or community because closer options are unaffordable.
If you ever fall behind, eviction is backed by literal force.
Trying to build something yourself—a small shop, a co-op, a tiny home, even a community garden—can run into zoning walls or permit nightmares.

The key thing to see is that landlords can keep getting paid whether or not they work, as long as the state keeps backing their claims to exclusive use and restricting alternatives.

In a freed market with no land monopoly:

Titles not backed by genuine occupancy and use would be much harder to maintain.
With fewer artificial barriers, more people and groups could directly access land for housing and production.
Rent as permanent tribute to an absentee owner would shrink toward temporary payment for actual services (maintenance, coordination), not a lifetime tax on simply existing somewhere on Earth.

3. The Tariff Monopoly – Rigging trade and sheltering incumbents

At first glance, tariffs and trade controls look like a boring topic for economists. In Tucker’s framework, they’re one of the main ways political power props up established capital. (Foundation for Economic Education)

What the state does

Imposes tariffs (taxes on imports) and various non-tariff barriers (quotas, rules of origin, licensing requirements).
Negotiates trade agreements that tilt the playing field in complex, industry-specific ways.
Uses customs enforcement, fines, and sanctions to punish attempts to trade outside the rules.

The stated reasons change—protecting jobs, national security, “leveling the playing field”—but the reliable effect is:

Certain domestic firms are shielded from foreign competition.

How corporate capital uses it

Industries lobby for tariffs and trade rules that protect their particular niche, so they can charge higher prices at home than global competition would otherwise allow.
Firms use the threat of moving jobs overseas as leverage over workers, even when actual offshoring is heavily shaped by trade policy they helped design.
“Free trade” agreements often turn out to be highly detailed corporate wishlists: strong protection for intellectual property and investor rights, weaker protections for labor and the environment.

Tucker saw tariffs as a way for favored producers to enjoy something like a domestic monopoly: a captive market with fewer serious challengers. (Wikipedia)

How it hits your life

You pay higher prices for everyday goods than you would in a genuinely competitive global market.
Industries that are heavily protected can become bloated and complacent, and when they finally hit a crisis, they demand bailouts “to save jobs.”
Workers are squeezed from both ends:
- threatened with offshoring if they ask for better wages,
- but also stuck paying inflated prices for goods in protected sectors.

In a truly free market for trade, firms would have a lot less ability to hide behind borders and political deals. They’d have to compete more directly on quality and price, without a custom-built tariff wall.

4. The Patent / IP Monopoly – Locking down ideas

Of all the monopolies, the patent and copyright system is the most subtle and the easiest to dress up as “rewarding innovation.” Tucker and other mutualists saw it as one of the pillars of capitalist exploitation. ([The Anarchist Library][1])

What the state does

Grants exclusive rights to use and sell inventions, designs, and creative works for many years.
Punishes anyone who reproduces or uses these ideas without permission—even if they arrived at similar designs independently.
Enforces digital locks (DRM) and right-to-repair restrictions, backed by fines and sometimes criminal charges.

Without the state, it would be very hard to maintain an exclusive claim over something as copyable as a formula, a circuit diagram, or a piece of software. With state backing, companies can:

Treat ideas as if they were permanently scarce objects, and charge accordingly.

How corporate capital uses it

This is where a lot of the everyday “this feels wrong” examples live:

Insulin and other medicines: The underlying science and techniques are often developed with significant public funding. But patent and regulatory structures let a handful of firms exclude competitors and charge hundreds of dollars for something that could be produced for a tiny fraction of that. (Wikipedia)
Phones, printers, tractors:
- Your phone is locked down so you can’t install whatever you want or fix it freely.
- Your printer nags you about “unauthorized ink” because software and patent tricks make third-party cartridges illegal or unreliable.
- Farmers can’t legally repair their own tractors without manufacturer authorization, thanks to software locks and IP law.
Scientific research: Taxpayers fund a lot of basic research, but the results are often placed behind paywalls at $30–$40 per article under publisher copyright, even though the publishers didn’t do the research themselves.

In each case, the pattern is the same:

A discovery or design is made, often with heavy public and collaborative input.
The state grants a legal monopoly on its use.
A corporation uses that grant to restrict supply, block competitors, and extract ongoing rent.

How it hits your life

You pay more for medicines, devices, media, and services than you would in a world where anyone could freely produce compatible versions.
You lose control over devices you supposedly own.
Whole sectors of knowledge are fenced off unless you can pay or pass through an academic institution.

The free market very clearly gave us the smartphone, mass medicine, digital networks, and abundant information. The IP monopoly is what turned those into:

$1,000 locked phones,
$200 medicines,
printers that bully you about ink,
and research you already paid for once, but have to pay for again to read.

How the four monopolies work together

None of these monopolies exist in isolation.

The money monopoly ensures that if you’re not already wealthy, you’ll probably need to borrow on unfavorable terms.
The land monopoly ensures that you have to pay rent or a mortgage to access the basic ground you live and work on.
The tariff and trade monopoly keeps prices for many goods higher than necessary.
The IP monopoly locks down the most advanced goods and knowledge, keeping their prices and corporate profits high.

Put together, they create a machine that steadily moves wealth upward:

From renters to landlords.
From debtors to creditors.
From consumers to protected producers.
From users and workers to patent and copyright holders.

Benjamin Tucker’s claim was stark:

Aside from wages, gifts, inheritance, and gambling, almost every process by which large fortunes are built rests on one or more of these monopolies—on some legally enforced denial of competition. (panarchy.org)

That doesn’t mean every rich person is secretly evil; it means the system that allows wealth to concentrate so extremely is designed to do that.

This is why wealth distribution looks so bizarre compared to most human traits. Things like height, intelligence, and most abilities cluster around an average. Wealth, on the other hand, follows a power-law pattern: a few people hold absolutely enormous amounts, and the vast majority have relatively little.

Is Elon Musk (or any billionaire) literally tens of millions of times more productive than a nurse, a teacher, or a mechanic? Of course not. But in a system where:

owning capital gives you access to privileged credit,
to land and resources secured by the state,
to trade rules written in your favor,
and to legal control over key ideas and platforms,

your wealth can grow in ways that track institutional leverage, not human effort.

In that sense, extreme fortunes aren’t just big numbers. They are the visible output of a machine that:

Skims a slice of countless daily transactions through rent, interest, and protected profit.
Channels those slices upward to people who often do less and less actual work the richer they get.

From the perspective of the average person, that shows up as a permanent, low-grade feeling that your labor never quite catches up: that no matter how hard you work, housing, healthcare, education, and basic security keep receding just out of reach.

Why this matters for “free markets”

If you care about markets—about voluntary exchange, about people being rewarded for creating real value—the four monopolies should bother you even if you consider yourself pro-capitalist.

Because what they create is not a level playing field where:

anyone can compete, and
income reflects contribution in anything like a straightforward way.

Instead, they create a landscape where:

starting positions are massively unequal,
rules are often written by the largest incumbents,
and whole income streams are locked in by law, not by ongoing performance.

Tucker’s radical move was to say:

The problem isn’t markets. It’s that what we call “capitalism” is built on these four state-granted monopolies. Remove them, and you get a different kind of market—one where workers and small producers capture far more of the value they create. (Libertarianism.org)

Whether or not you fully buy his conclusion yet, the key takeaway from Part 2 is:

The state–corporate complex doesn’t just “influence” the economy in a vague way.
It uses specific, legally enforced monopolies in money, land, trade, and ideas to turn your dependence into someone else’s passive income.

In Part 3, we’ll flip the thought experiment around:

Suppose we actually removed these monopolies—no privileged banking, no absentee landlordism backed by force, no protective tariff walls for big firms, no long-term IP cages around ideas.
What would a freed market look like then?
How would your cost of living, your bargaining power, and your options change?

The goal isn’t to hand you a utopian blueprint, but to show how different things could be once you stop mistaking these monopolies for “just how markets work.”

https://theanarchistlibrary.org/library/benjamin-tucker-individual-liberty "Individual Liberty" ↩