Some people have a hard time seeing how a libertarian could call himself or herself a socialist. I understand the confusion. But in the late 19th and early 20th centuries, this was far less a mystery. In market anarchist Benjamin Tucker’s day, socialism was more an umbrella term than it is today. It essentially included anyone who thought the reigning political economy — which they called capitalism (and saw as a system of state privilege for the employer class) — denied workers the full product they would have been earning in some alternative system. The Tuckerite socialists’ alternative was full laissez faire — without patents, tariffs, government-backed money/banking, government land control, etc. The collectivist socialists had some nonmarket system in mind. The point is that socialism was more a negative statement — against capitalism — than a unified positive agenda on behalf of a specific alternative system.
Some might say that the common element for all these variants of socialism was a belief in the labor theory of value. But it may be more precise to say that the comment element was more general: namely, that workers were cheated by the reigning system. That need not commit one to the labor theory. (On the relationship between cost of production and price in Austrian economics, see my “Value, Cost, Marginal Utility, and Böhm-Bawerk.“) In fact, Austrian economics contains an implicit exploitation theory, which was made explicit by Eugen von Böhm-Bawerk. As I wrote in “Austrian Exploitation Theory“:
Böhm-Bawerk was merely applying the more general exploitation theory held by free-market thinkers at least back to Adam Smith: Monopolies and oligopolies (suppressed competition) harm consumers and workers through higher prices and lower wages. For Smith monopoly was essentially the result of government privilege. This largely has been the view of later Austrians, also.
This should be uncontroversial. In the corporate state, government privilege restricts competition among employers in a variety of ways and — just as important, if not more so — forecloses or raises the cost of self-employment and other alternatives to traditional wage labor. So worker bargaining power is reduced. The difference between what workers would have made in a freed market and what they actually make represents systemic exploitation.
I’m not saying that libertarians should call themselves socialists today. That would not communicate well. But this semantic history has its value.
The relevant point to consider is that when Benjamin Tucker and other libertarians considered themselves to be part of the socialist movement, socialism was just a vision, a utopian concept that had not been put into practice. In the 20th Century socialism was realized in the Soviet Union and a succession of police states in Italy, Germany, and later China and East Europe. Now it is clear that socialism in practice means state control of the means of production, and state control of livelihood. It is clear that socialism in these states reduced workers to the level of industrial serfs, with no freedom to move from job to job, no ability to bargain for better conditions, and no freedom to criticize the state. The Libertarian Movement clearly must stand in opposition to such total destruction of freedom.
In the 20th century, one form of socialism (Marxism in its various subsets) was realized. But that form of socialism had split from other forms long before.
I'm skeptical of most forms and most scales of socialism, but there's a difference between "strawberries" in particular and "fruit" in general.
I’m not saying that libertarians should call themselves socialists today. That would not communicate well. But this semantic history has its value.
It doesn't communicate well, at least not in America. Of course I resolved the conflict by calling myself a non-libertarian.
My recent post wing nut
When Benjamin Tucker considered an anarchist/individualist/socialist, he could look to the successful examples of the intentional communities founded by Josiah Warren, which were anarchist/individualist/socialist as well.