Last week Michael Lind asked a silly question (“The question libertarians just can’t answer”): if libertarianism is so great, why hasn’t any country tried it?
The question is silly because the libertarian answer is obvious: Libertarianism is great for ordinary people, but not for the power elites that control countries and determine what policies they implement, and who don’t welcome seeing their privileged status subjected to free-market competition. And ordinary people don’t agitate for libertarian policies because most of them are not familiar with the full case for libertarianism’s benefits, in large part because the education system is controlled by the aforementioned elites.
Lind’s question is analogous to ones that might have been asked a few centuries ago: If religious toleration, or equality for women, or the abolition of slavery are so great, why haven’t any countries tried them? All such questions amount to asking: If liberation from oppression is so great for the oppressed, why haven’t their oppressors embraced it?
Now E. J. Dionne proposes a different answer (“Libertarianism’s Achilles’ Heel”) to Lind’s question: “We had something close to a small government libertarian utopia in the late 19th century and we decided it didn’t work.”
Leaving aside the Orwellian use of “we” – as a serious claim about history, this is absurd. Even if we ignore, as we shouldn’t, the anti-libertarian legal disabilities imposed on women, nonwhites, and homosexuals (i.e, the majority of the population), it remains true that the late 19th century American economy was characterized by vigorous and systematic government intervention on behalf of big business (wrapped sometimes in laissez-faire rhetoric and sometimes in progressive rhetoric). A government that routinely brings in police or the army to break up strikes is hardly a laissez-faire regime.
In the 1880s, free-market anarchist Benjamin Tucker identified the domination of business interests in the Gilded Age as grounded in a variety of state-imposed monopolies, stressing four in particular: Protectionist tariffs; the monopolization of credit through government control of the money supply; the suppression of competition via informational monopolies (patents and copyrights); and the assignment of titles to land and natural resources on the basis of expropriation and political pull rather than homesteading and trade. Alongside these, Tucker listed the monopolization of security services represented by the institution of the state itself.
The rigging of the market in favor of big business did not end with the Gilded Age. Dionne’s claim that in that era “monopolies were formed too easily” ignores historical research by James Weinstein and Gabriel Kolko showing that the supposedly anti-business regulations of the Progressive era (and likewise, Butler Shaffer has shown, those of the New Deal) were actually lobbied for by the corporate elite, in order to prop up monopolies that could not survive in an unhampered market. Dionne’s vision of the New Deal as coming to the rescue of a government that was previously “helpless” and “handcuffed” by “anti-government ideology” is ludicrous; Roosevelt’s big-government, pro-cartelization policies were largely a continuation of Hoover’s. And given the destruction of affordable health insurance in the early 20th century via the political might of the medical establishment, as documented by historian David Beito, Dionne’s claim that laissez-faire left the poor “unable to afford health insurance” is literally adding insult to injury.
The myth of 19th-century laissez-faire is useful to statists on both the left and the right. As contemporary market anarchist Kevin Carson observes, “advocates of the regulatory-welfare state must pretend that the injustices of the capitalist economy result from the unbridled market, rather than from state intervention in the market,” since otherwise “they could not justify their own power as a remedy.” And by the same token, “apologists of big business” need to “pretend that the regulatory-welfare state was something forced on them by anti-business ideologues, rather than something they themselves played a central role in creating.”
Dionne’s identification of the Tea Party as representing “anti-statist libertarianism” shows that he has let himself be bamboozled by the anti-government rhetoric of what is mainly (with some honorable exceptions) a pro-big-government campaign for crony capitalism, intrusive morals legislation, harassment of peaceful immigrants, and a sanguinary foreign policy. The regulations against which Tea Partiers rail are mainly secondary regulations, the belt over the bones, designed merely to ameliorate the effects of those primary regulations that maintain the essential power structures in place.
A better question we might ask Lind and Dionne: if the intrusive state is so great, why does it need to retain its clients by force, rather than letting them peacefully opt out?
Citations to this article:
- Roderick T. Long, The myth of 19th-century laissez-faire in America, Opelika-Auburn [Alabama] News, print edition, 06/16/13
E.J. Dionne: "In politics, we often skip past the simple questions."
Problems arise when the "simple questions" commit the fallacy of complex question, and thereby become assertions…that beg the question.
Libertarians and Ancaps often refer to the "gun in the room" as regards the State, and taxation in particular – and I agree with them on that point. But the reason that "libertarianism" cannot be "sold" to majority (poor) people today, is that it does not address the "private gun" – a tiny few "owning" most of the land and resources – creating landless-serfs who must beg for "employment / jobs" in order to have a place they are simply allowed to "be" on their own planet. The barrel of that gun shadows them every waking moment.
Benj. Tucker lived in a time when vast frontiers existed and homesteading was practical – when one could "escape"; those days are gone, and one person with machines and "laborers" working on "voluntary contracts" (sic – seeing as they have no land / choice, but to choose another master and be quickly replaced – more so sans borders) can "mix his labor" with thousands of acres and "claim" it. The market cannot "adjust production" of "Earth" to meet demand, and if a few "own" most of Earth (Land and Mineral Resources), they gain control of real production.
Before those dependent on the "artificial safety-net" of Government will be willing to abandon their meal-and-shelter tickets, they will need to be offered their private-shares of the "natural safety net" called "Earth." Cut everyone in on the arable land and resources, *and* address correcting the inequities created by the status-quo Crony-market, and I think we could attract the majority to Free Market ideas, easily.
But suggest to most so-called "libertarians," or even "AnCaps," that people have a "birth right" to the natural-riches of their own planet, and they scream "heresy." Most absolutely love "un-earned" income from landless-renter-slaves and dividends from landless-workers. They believe that "meritocracy" means the clever get to screw-over everyone who is not-so-clever and/or born-poor. In my experience, even if offered the reward of zero taxes in exchange for actually having to provide a service or product, they are unwilling to abandon their love of "free money" and "low wages" from the majority – de-facto landless, job-beggars.
I realize that most folks on this site are not the "so-called" Libertarians to whom I refer. I simply wish to emphasize that the idea of "unlimited private property" – when extended to the natural-world – is our greatest enemy in the struggle to further Free Market ideas in the realm of human-produced products and services. If we can disabuse a substantial percentage of "vulgar" (Koch-led) libertarians of this notion, I believe we CAN achieve our goals.
H-A-R [ humansandresources.org ]
Tucker's point about the state imposed monopolies is astute.
Does he also address the legal structure of the corporation as an element of "rigging the market in favor of big business?" This seems to me to be a significant issue!
Am I wrong in thinking this? Is this issue dealt with elsewhere in the literature?
Thanks!
I began reading your comment's first paragraph, and thought: "This is gonna be great!"
But your eloquent style and succinct manner fell to unsubstantiated prophecy about how things will turn out without a state. You have forgotten that the consumer is king, that people care about helping others, and that injustice can be solved by free market (i.e. unlimited private property) means.
And then you collectivize all "non-in-group/left libertarians" into the "vulgar" and "Koch-led". I hate to tell you, but the Kochs have little influence on ANY libertarians. And to the extent that they do (sponsoring summer study events, think tanks, etc.) they have equally influenced your left-libertarian idealists: I first met Mr. Long when he was a lecturer at an IHS event, where participants were subsidized through Koch money.
You have real concerns about how the poor will be treated in a state-less society, and I share them (myself being from a low-middle class/poverty level home). Formulate some peaceful ways to handle it, and implement them! Stop erecting false barriers between fellow travelers based on unfounded claims and ad hominem insults.
You miss the fact that the vast majority of all land is owned by State governments: there is PLENTY of land that would be available for 'homesteading' in the event that States ceased to exist. (In fact there are local governments in the US that are in financial trouble precisely because the VAST bulk of the local land is Federally-owned, and exempt from local and state-level property taxation).
But it gets worse: any system that puts in place a set of 'custodians', involves the establishment of centres of power and wealth. The least scrupulous individuals in the society will find it attractive to compete for control over those power centres, since obtaining control gives them access to long-term rewards for little effort (plus the whole "owning the judges" thing in case your power is challenged).
Otherwise put: politics attracts the WORST of our species, not the best – irrespective of the mechanism used to obtain power (be it democracy or a coup d'état).
Lastly but not leastly, it is mathematically trivial to show that democracy is not capable of properly reflecting the 'general will' – which is to say that aggregating individual ordinal rankings will generally result in a social-preference function that is 'cyclical', i.e., has A ≻ B ≻ C ≻ A (where "≻" means "is preferred to"). And as for democracy… in a society where 50% of the population have cognitive shortcomings that most of us would find appalling, it is not surprising that the electorate falls for the same lies, over and over. Check out any of the LISS/ALLS surveys since 1997 to find just how cognitively-impaired your fellow 'citizens' are… the median Western adult is not capable of understanding the instructions on a bottle of pills, and only 5% are able to extract meaningful information from a moderately-complex piece of text (say a job advertisement).
I don't think that formalising a structure that codifies how individuals may pool their capital can be considered 'rigging' the market.
The concept of limited liability (whereby a shareholders' liability for the debts of the company only extend to the value of his shareholding) creates an incentive for risk tolerance – because the principals of the company will not suffer additional personal loss if the venture fails (unless they behave fraudulently or recklessly).
That said, everybody who deals with "XYZ Limited" knows that in the event that XYZ Limited fails to pay its bills, they will have no claims over its owners/shareholders/company officers… they ought to price that into their willingness to extend credit (and the terms of any credit they decide to extend) accordingly, and likewise when companies issue debt it will be factored in to the price paid for the debt (which in return determines the cost of funds for the company).
Put it this way: let's say you're a seller of widgets. You can either deal with XYZ Limited who demand that they be permitted to pay on 30-day terms, or you can sell widgets directly to end-users where payment is tendered before goods are dispatched or handed over. The only reason you would choose XYZ Limited is if you thought that the long-term business would be more profitable (ie, their orders would be larger).
People don't form expectations in an informational vacuum, although that seems to e the operating assumption in much of the stuff I have read about 'distortions' introduced simply by the ability to incorporate.
Distortions introduced by .gov monopoly licensing (of law, accountancy, medicine, dentistry etc) are a whole other ball of wax: they restrict entry and thereby restrain and reduce competition, so prices are higher than they would otherwise be, and output is lower and probably of lower quality – perversely, given the stated objective of 'quality control' (there's a hint in that – the actual objectives are not those that are stated).
But the reason that "libertarianism" cannot be "sold" to majority (poor) people today, is that it does not address the "private gun" – a tiny few "owning" most of the land and resources – creating landless-serfs who must beg for "employment / jobs" in order to have a place they are simply allowed to "be" on their own planet. The barrel of that gun shadows them every waking moment.
Right, that's exactly our point. Hard to see why you think it's a criticism of our point.
I mean, the charge of not addressing the "private gun" problem is not exactly one that can be raised against this libertarians on this website, yes?
Since Humans and Resources brought up property rights, I am reminded of a question I had about the No Proviso Lockean view of property rights. From my understanding, No Proviso Lockean view holds that a person possesses a property right in land once she has mixed it with her labor. She can then go on to use and/ or transfer to another person. My question is: What if she abandons it? Does she lose her right to that piece of land? Also, what would be considered abandonment?
Limited liability isn't so bad, but fiduciary responsibility is. That is, corporations and money managers are obligated to maximize profit and any deviation from that goal renders them legally liable. This incentivizes immoral behavior.
Another clear, concise and hard-hitting rebuttal from Long. Keep up the great work.
No ad-hominems there, in my view – those 'collectivized' are a fairly unified-voice in "libertarian" online communities, in my experience. The Limbaugh-esque 'lazy bums' type of attitudes towards the poor and intense-hatred of unions are repeated ad-nauseum in such circles. (Not on C4SS – and that is not what I meant to imply.) The foundation-funded establishment-left does not fail to pass along those insulting messages, though all they really need to say is "goodbye safety net" and they win – unless and until we make a better offer. I propose one which does not require tax-theft or state-power.
I am glad to hear some good came out of a Koch-sponsored event, but I view the Koch element along the lines of Lenin's "best way to control the opposition is to lead it." To the extent others can subvert that agenda from within, it is good to hear that. When I think "Koch" I think about their creation of the DLC and appointing then-gov Bill Clinton its first director; this was instrumental in gutting the unions out of the Democratic Party and destroying the American middle-class. If the Koch Bros return the non-man-made mineral-resources they control to their rightful heirs – you and me – so that WE can choose who should extract our shares, and to whom WE should sell our shares in a free market – I might reconsider my opinion of them.
I am doing what I can to invent a better system. I have attempted to address the problems with a different viewpoint than I have seen articulated elsewhere – anti-statist, anti-collectivist, but pro-Individual's birthrights to the planet – what I consider to be the missing piece – and that upon which a wider consensus is possible.
I do not propose "custodians" and agree entirely with your analysis of that pitfall and of "democracy" in general. This is why I reject the Geo-Libertarians Georgian tax-system. That said, I have yet to hear an explanation on how the "labor mixing" formula could be set to prevent a tiny-minority from obtaining vast-majority control of arable land and resources.
I propose we come up with a solution which ends "de-facto homelessness," and suggest an open-source database for this, which uses market-dynamics to re-size the available open-shares to current demand. People who wish to use more than their share can lease from others (not a government) – in a free market. I am open to other suggestions on how this could be implemented.
Most of the government-owned land in the USA is desert, though I agree that this "custodianship" – the big lie of collective ownership – is not a good thing. If all govt land was put into the "market" tomorrow, I'd give it a few years until tomorrows' children had slim-pickings. Open the borders, and reduce that to months – along with a likely shooting war from the resentment incurred.
I do not say this as a proponent of states or permanent borders – but in recognition of real-world dynamics, and recognizing the need to do things in the correct order; first return our Individual birthrights to the planet (nationally in the initial stage), then dissolve the govt-backed safety-net, then open borders with other "areas" (former-nations) who have adopted similar "non-slave" systems – at which point the immigration pressure would be minimal; people tend to want to live near where they were born, and primarily flee when driven by survival-needs.
Yes – as I said in the closing paragraph (I regret not making it the opening paragraph, for emphasis). The definition of "Libertarian" comes up often here, and has clouded how my response is being taken. I am not "anti C4SS" by any stretch. What I propose would best be described as a "Geo-Mutualist" viewpoint, recognizing Henry George's criticisms, but rejecting the 'tax' solution and the state, in general (I read George and Carson after coming up with the framework, but the name roughly fits the model).
I am not "attacking" the views presented in the article, but continuing forward from those, to present what I see as the primary impediment to the spread of "non-vulgar" libertarian views. Something tangible is needed – something someone dependent on food-stamps can grasp as a viable alternative; I suggest direct ownership of Individual's shares of mineral resources and land.
… and how much can they mix their labor with and rightfully claim, considering machinery and hired-labor? That is a key question that sent me off down my path, as it seems we are coming up against Locke's limit of "enough, and as good left in common for others."
In the counterfactual under consideration (the absence of the State), there is one main thing that would prevent a tiny minority of the population from obtaining the control of a majority of the arable land and resources: the absence of .gov (tax-transfer) subsidies to 'size'.
At present, owners of "vast tracts of land" (to riff off Monty Python) do not pay the full price for its protection (or an actuarially-fair level of insurance – same thing): even if they pay for private security, the main role of that private security is to call the State (tax-funded) pigs if anything serious happens. Likewise, when seeking legal redress, they have recourse to (tax funded) courts – a State monopoly which is expensive and low-quality.
In the absence of a State, those subsidies (and other more insidious/corrupt ones) would disappear.
The ownership of land – and resources in general – would gravitate towards parcel sizes that grew only to the point where economies of scale were exhausted.
At present, .gov SUBSIDISES 'big' – big mines, big Ag, big Pharma, big Oil, big "Defence", big Media, big Prisons… name a business sector, and the bulk of the direct and in-kind transfers go to the BIG hands, not the most efficient. (.gov rarely tries to get on a horse before it's already a winner – which is why its track record of 'fledgling industry' winner-picking is so bad).
As such, .gov – using taxes and debt – underwrites the expansion of resource-acquisition past the point where 'endogenous' economies of scale evaporate. (And of course no 'eminent domain' means no judicial theft of property to build stadiums for the retarded scions of Connecticut plutocrats… I'm lookin at you, Texas Rangers).
It will always be the case that if we started a 'New Tomorrow' with a perfectly equal distribution of resource ownership, that distribution would change as a result of voluntary private activity. Individuals who failed to spot embedded value would sell at a price that would attract those who did spot the value, and that's a good thing.
Within a generation, the Gini coefficient in the society would go from 0 to (my guess) above 0.5 based solely on differentials in the ability to identify and exploit arbitrage and profit opportunities – that is to say, we are not all 'wired up' the same, and there are vast differentials in talent and application as a result, so it's preposterous to presume that outcomes would be remotely similar (or stable).
But here's the important thing: NONE of that change would be driven by judicially-enforceable coercion. NONE of that change would take place using the victims' own taxes as part of its budget.
I don't believe we have 'birthrights to the planet' – if such 'birthrights' exist, why are they restricted to humans?
That said: your last paragraph speaks to 'rebooting' with equal endowments of resource proprietorship. I agree with the broad idea, but I don't think the such a redistribution needs to be the initial condition.
Simply remove all the underwriting that 'big' receives from .gov, and that will change the calculus – the system will endogenously reallocate capital/property/resources to their highest-value use.
The terrific thing about such a change would be that, to the extent that existing capital-holders are 'overweight' a resource due to subsidies, they will wind up selling their resources at significant losses (because their holdings are currently overvalued relative to their intrinsic value): the losses ought to equal the present value of all future subsidies they would otherwise have received (which now must be taken out of their rate-of-return calculus).
Fiduciary responsibility only means that the agent is the repository of the trust of the principal (in the case of a corporation, the shareholder): the fiduciary himself is obliged to have the highest regard for the interests of the principal – and nothing more.
In law, the fiduciary relationship actually requires that the principals' interests are given the highest standard of care by the fiduciary. To the extent that 'maximising profit' can be done in ways that open the principal up to any adverse liability, the fiduciary is obligated NOT to pursue those courses of action.
You seem to be conflating the underlying principal (fiduciary relationships) with the operational reality (scumbags and skimming operators claiming that their fiduciary role obliges them to behave immorally). Scumbags lie in order to further their own interests – hence the attempts by scumbags to exculpate themselves by claiming that their fiduciary obligations made them do such-and-so. It's actually a manifestation of the "principal-agent problem"… agents (including fiduciaries) have their own objectives which may differ from the principals' – but here's the thing: the fiduciary relationship requires the agent to set aside his own objectives and solely look out for the interests of the principal.
However (and it's an important however) the sorts of people who are attracted to big pots of money… are unscrupulous in furthering their own objectives, even at the cost of violating their fiduciary obligations. Find me one portfolio or hedge fund manager (or any other ticket-clipper or skimming operator) who goes into that profession in order to be the best damn fiduciary he can be – you won't find a one. They're all in it for the coin (i.e., to further their personal objectives): if more people realised that and ignored the bullshit, managed funds would be much smaller, and hedge funds probably would not exist (I used to rate these guys for a living… they're really not that bright, most of them).
I agree with everything you said **except** that removing government _would be enough_ to end the "de-facto homeless" nature of being born in most areas of the world, today. Concentrated mineral resources allow an 'owner' to hire an army (create a private government, in function) to enforce whatever else they choose. This is, in fact, how the govt of the USA was bought by the "big trusts" in the late 19th century (not implying it was ok, prior). Although government is a convenient tool for such types, with taxpayer-funding used to claw-back salaries to fund the tyranny, it is not the only available option. If Rockefeller didn't have the US State Dept & CIA to overthrow Allende in Chile and put in his buddy Pinochet, he would have used private death-squads, as Coca Cola used in Bolivia, and as are extensively used in Columbia by the "landed" classes to this day. Only when there is no motive for such actions, because all persons have an equal share of mineral resources and land, tax-free, will the underlying incentive for war and conquest be vanquished.
I do not suggest a one-time redistribution, but an alternative trading system for land, such that 'shares' are traded, but only for other 'shares', which are auto-sized by demand. No one can forfeit / gamble their "right" to a share of the Earth, any more than their next years breaths of air – both of which are equally necessary for survival. An ethical person would not accept an offer to place a metered-mask on another to enforce "coin-operated air" for profit – yet the status-quo promotes this very system with land. While Mineral resources are not bodily-necessary, they are critical for the development of civilization, and a 'pinch-point' of limited supply, such that concentrated control empowers tyranny.
As to all human-made goods and services, I am entirely in support of a free-market with no exceptions. Yes, some will acquire more 'wealth' – but not in 'ownership' of tracts of land or non-extracted minerals, which would re-create Tyranny. Not only should others not be 'taxed' to subsidize another's personal enrichment, neither should they be deprived of their share of the Earth (survival sans rent) in that process. Consider that this arrangement would help prevent 'popular uprisings' of democracy-tyranny (or more pernicious forms) from 'breaking out' in a post-state world.
On a deeper level, the lack of a 'birthright' to Earth implies, to me, a form of 'illegitimate person' – not in terms of social convention (the 'marriage' of one's parents), but in terms of economic practicality. These 'illegitimate' (non-landed) persons are de-facto slaves, in my view. If one wishes to state, without qualms, that only the landed should have children – I would agree that this is the most humane decision in the status-quo "Feudalism II" system, and would result in highly-paid 'labor' given market-dynamics *if* it were a widely-adopted position. As it is not widely-adopted, and enforcement of such a dictate would require tyranny, we require another solution that respects the rights of all persons to live/exist absent coerced-labor (to put coins in the food-mask / land-gate), and to have the opportunity to meaningfully participate in civilization (control of an individual share of minerals). To be practically realizable, this goal would need to include an 'offer' which could bring the 'currently-illegitimate' into the 'free market' camp.
As to humans vs. animals: It would be foolish to extinguish other species. The value of their specialized genes / proteins, alone, considered, aside from the aesthetics of "what kind of a world do we want to live in," and such. An interesting topic would concern how a post-state world would (or would not) preserve other species / habitat. In any case, I don't think they have 'rights', which are a human concept, reflecting human desires for consensual human relations – and, in my view, absolutely necessary to achieve that end.
While I don't think it addresses your question directly, Tucker's "The Attitude of Anarchism Toward Industrial Combinations" may have some clues. In the pamphlet he says he see nothing inherently wrong with combination of resources (corporation); people are free to do as they please with their own resources. However, he sees the people who control the trusts (he mentions Rockefeller by name) as coming to their great fortunes only by means of extraction of usury – profits, interest, and rents. He then lays out the four monopolies as the enabler of profits, interest, and rents. Thus, state imposed monopoly is the cause of great accumulations of wealth, and hence the corporate trusts.
Like I said, it's not a direct answer to your question, but he appears to have thought that without state imposed monopoly, large corporations would never have arisen in the form in which they existed in his time. However, given all he had to say about unhampered competition as the solution to social ills, I suspect he would have rejected things like state-enforced limited liability and the like.