Counter-economics is a term originally used by libertarian activists Samuel Edward Konkin III and J. Neil Schulman, defined as ‘the study and/or practice of all peaceful human action which is forbidden by the State.’ The term is short for ‘counter-establishment economics.’

Counter-economics was integrated by Schulman into Konkin’s doctrine of agorism (a philosophy that advocates the goal of the bringing about of a society in which all relations between people are voluntary exchanges). The first book to portray counter-economics as a strategy for achieving a libertarian society was Schulman’s novel ‘Alongside Night’ (1979). 

Konkin’s agorism, as exposited in his ‘New Libertarian Manifesto,’ postulates that the correct method of achieving a voluntary society is through advocacy and growth of the underground economy or ‘black market’ – the ‘counter-economy’ as Konkin put it – until such a point that the State’s perceived moral authority and outright power have been so thoroughly undermined that revolutionary market anarchist legal and security enterprises are able to arise from underground and ultimately suppress government as a criminal activity (with taxation being treated as theft, war being treated as mass murder, et cetera).

According to Konkin’s pamphlet ‘Counter-Economics’: ‘The Counter-Economy is the sum of all non-aggressive Human Action which is forbidden by the State. Counter-economics is the study of the Counter-Economy and its practices. The Counter-Economy includes the free market, the Black Market, the ‘underground economy,’ all acts of civil and social disobedience, all acts of forbidden association (sexual, racial, cross-religious), and anything else the State, at any place or time, chooses to prohibit, control, regulate, tax, or tariff. The Counter-Economy excludes all State-approved action (the ‘White Market’) and the Red Market (violence and theft not approved by the State).

According to Konkin, counter-economics also allows for immediate self-liberation from statist controls, to whatever degree practical, by applying entrepreneurial logic to rationally decide which laws to discreetly break and when. The fundamental principle is to trade risk for profit, although profit can refer to any gain in perceived value rather than strictly monetary gains (as a consequence of the subjective theory of value). Various practices of counter-economics include these voluntary practices: arms trafficking; bartering and alternative currency use; being or hiring illegal immigrants; drug trafficking; smuggling; subsistence farming; and tax evasion.

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