Whether McDonalds could exist without McDonnell-Douglas is precisely the issue.

But the issue is not resolved by merely restating the fact that the state exists, because taxation is a compulsory impost. You can choose whether or not to buy a hamburger from McDonalds, but you can’t choose whether or not to pay tax for the state to buy weapons, even if you don’t agree with it.

So that is not an argument against free trade in hamburgers, it’s an argument against forcibly taxing the population to fund imperial military adventures.

While ever people are confused over the definitions of words, the following discussion will be confused. Capitalism means the private ownership of the means of production. State monopolies of vast killing machines, state monopoly control of the money supply, state regulation of any and every aspect of productive activity, do not come within this definition. People confusedly criticise capitalism for what they don’t like about anti-capitalist systems.

Yet no advocate of capitalism ever claimed that you can have large-scale compulsory governmental priviligentsias plundering the entire population to put price controls on anything and everything, and not have undesirable socio-economic consequences. These are precisely the reasons against unlimited arbitrary powers being vested in government for purposes of economic planning – because such will inevitably follow.

Or let us take the definition of ‘capitalism’ in dictionary.com: “an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.”

When people describe the military-industrial complex of the modern American empire as “capitalist” they are merely confused over the definitions of terms. We are not getting to square one in terms of critique of political economy.

If you are going to use the term “capitalism” to describe these behemoths of state leviathans systematically violating private property and individual freedom at every turn, it only means we need a new term to describe a system of social co-operation based on private property, individual freedom, sound money, free trade,

As any genuine historian knows, deregulation can also mean that the state can break lawful rules, as John Howard did when he banished the Arbitration Court to fashion his work choices.

It is pretty well what Adam Smith meant when though he invented the free market, he still feared that economic greed would break democratic laws backed by the rising Enlightenment.

Cheers, BB, WA.

Diocletion, you make a false distinction between the state and the forces of capital. Take a look at Iraq. 1/4 of the 'defense'personnel in Iraq are private. This is far beyond previous mercenary levels. For the first time, the impact of war has been to see a boom in the economy - not a slowing. War funded by and paid for by the public for the benefit of the forces of capital is the new reality. The largest growth industry in the US is the security and defense industries. The State serves the forces of capital. That isn't entirely new, of course, but we are clearly at a stage where the state is no longer easily capable of controlling the private beast it has created. The notion that the State is 'controlling' capital through taxation bears no resemblance to reality.

Next, you are the first one to clearly distinguish the issues and get past the semantic confusion.

The real substantive issue is whether the phenomenon of the Iraq war is one in which the state is the driving force, or private capital interests are.

It is easy to see how the state is - it is the state that made the decision to go to war, the state that expropriated the treasure from the American population, the state that is paying both the public and private soldiery, and the state that is the patron of the plunder and privileges that it hands out to the clientele of its corrupt largesse.

But in order to see how private capital can be the driving force, the answer can only ever be through the agency of the state. The fact that we think it wrong for private interests to benefit from government forcibly taking property from one group and giving it to another (a la Iraq), is not an argument against a system based on private property, it’s an argument against governmental robbery.

But socialists aren’t opposed to government taking property from one group and giving it to another – they are in favour of it.

To answer John’s question, what Iraq is about is an attempt by the US state to enable the US state to expand its global dominance, to continue its internal and external plunder, and hand out privileges and bribes to its supporters. The fact that private interests benefit is not a disproof. Ultimately all interests are private. It’s only a question of how they are to be served: through peaceful production and exchange, or through state violence and plunder. These are the real issues: the rest is semantics, slogans and confusion.

The objections you, and I, have to the Iraq war do not make an argument against abolishing such state actions – they make an argument in favour of it.

No dio, next is essentially correct to identify the "false distinction" between state and private capital. Rather, you seem preoccupied with such a (false) distinction, probably because you have at least as much euphoric faith in Adam Smith and Hayek as Passy has in Marx and Lenin.

But it is clear that the US state has been subverted and subordinated to the free-traders' global con (and I don't just mean a "neo-con"). The agency of state is only relevant in Iraq as a vehicle for such scams of the corporatist project. From Halliburton, Blackwater, oil-men plunder, and all surrounded by the credit bubble yawning from the derivatives canyon.

Three cheers, next. The war, like its domestic "peace" (see Hurricane Katrina!), has next to zilch to do with taxation, but all to do with investment.

If such state action were abolished, people would still be able to buy and sell oil or whatever, or not, as they choose.

But if private capital interests are abolished, it will increase, not reduce the state’s unrestrained arbitrary power to engage in these kinds of crimes and abuses.

These assumed powers of re-distribution and undeclared war are not in the US Constitution. They are not part of the classical liberal belief system - they are anti-capitalist. They have arisen from a century of socialist beliefs in the USA in all three branches of government, which have granted to government general powers of economic control and redistribution, such as its manipulation of the money supply, which are the source of the crimes of redistribution and war. Then socialists are surprised at the result of unrestrained government power for economic planning purposes, surprised that governments end up privileging political favourites, just as socialists disown the results in Russia, China, Cambodia, Ethiiopia, Iraq, and every other country that ever tried socialising private capital. Socialists want to abolish these crimes and abuses by increasing the power of government to commit them and removing the only effective institution that can limit it: private property.

(BTW John, did you used to teach taxation law at ANU?)