I frequently argue that, far from the result of the “free market,” the recent speculative bubble was the result of over a century’s worth of government intervention. The bubble resulted from vast disparities of wealth — disparities created by the state and its enforcement of privilege — with a growing share of income going to classes looking to use it for investment rather than consumption.
Someone recently challenged me to describe exactly what government interventions I’d eliminate to remedy this situation, and exactly what effect I’d expect them to have. So here, without further ado, is my free market agenda for macroeconomic stability.
I’d eliminate all patents and copyrights. This would eliminate the portion of the price of manufactured goods which consists of embedded rents on artificial property rights. It would also eliminate the legal barriers to full-fledged competition from modular product designs for ease of repair and reuse, which currently make planned obsolescence artificially profitable.
I’d eliminate all legal barriers to the competitive supply of secured credit (i.e., no minimum capitalization requirements as a condition for licensing banks that only lend money against the property of their members), all legal tender laws that limit the use of LETS systems, and all banking laws that either limit LETS systems from advancing credit against the future labor of their members, or limit practices like Tom Greco’s credit clearing systems which allow members to run account deficits.
I’d cease to enforce all absentee title to vacant and unimproved land, which would result in market competition driving out a major part of current land rents and mortgages.
I’d fund all long-distance transportation with user fees, and make the heavy trucks pay 100% of the cost of the roadbed damage they cause. This would have a huge indirect effect toward making the centralized “warehouses on wheels” model less profitable, and promoting a decentralized, relatively low-capital, demand-pull model based on lean production, without the imperative of artificially inflating demand to fully utilize the capacity of expensive specialized machines.
I’d eliminate zoning laws which impose enormous costs on small producers by making it illegal to run microenterprises out of their homes and force them to engage in large batch production to amortize the costs of stand-alone commercial real estate if they want to be in business at all. Ditto for all “health” and “safety” codes whose main effect is to mandate outlays for industrial-sized equipment if they want to be in business at all. There would be a lot more home-based microbakers, microbrewers, home-based daycare and assisted living, unlicensed cabs with just a car and cell phone, and clothing makers, all with next to zero overhead to service because they use spare capacity of capital goods most people already own.
And I’d eliminate “safety” codes whose main effect is to outlaw vernacular building techniques and give professional contractors with high-overhead and high-capital techniques a monopoly on the creation of housing.
The effect of the last two planks would be to radically increase the share of total consumption needs that could be met through low-overhead production in the home, or by trading with others engaged in such production, and to reduce the total amount of wage labor required to meet one’s needs.
The effect of all the previous ones would be to lower the total real cost of obtaining stuff that had to be obtained through the cash nexus, and hence of the total labor time required to earn the money to pay for them.
The overall effect would be a significant shift of labor time at the margins from wage labor to labor in the informal and household sectors. There would be more part-time workers, more households with only one full-time wage worker where there are now two or more, and more early retirees. And there would be more people who could afford to ride out periods of employment while waiting for a job offer more to their liking, rather than desperately grabbing onto the first offer that came their way.
Taken all together, that would mean reduced demand for hours at wage labor compared to the available supply. There would be relatively fewer workers competing for jobs, and more jobs competing for workers.
There would be reduced rents on large concentrations of accumulated property, and increased bargaining power of labor. Macroeconomically, this would mean a smaller share of national income going to super-rich rentier classes with a high propensity to save, and a larger share going as a direct reward to labor. A much larger part of GDP would be spent by the producers buying back their product, rather than to coupon-clippers seeking profitable outlets through Ponzi schemes in the FIRE economy.
Ta-daaa! There you have it: A free market agenda for economic stability.
Citations to this article:
- Kevin Carson, The rent is still too damn high: Here’s how to lower it, Malawi Nation, 01/20/11
- Kevin Carson, The Rent’s Still Too Damn High — Here’s How to Lower It, Sagittarius News & Style Magazine, 01/16/11
- Kevin Carson, The rent’s still too damn high, Dhaka, Bangladesh New Age, 01/18/11
But Kevin, if we did all of that we would be crippling the state! Of course, they'd still have criminal law to help fund themselves. It just seems so Utopian. I mean, who would build the roads… oh wait, you covered that.
Kevin,
I agree with most of your proposals, especially the first, patent and copyright abolition, which I think would have the biggest effect of the ones you mention.
I disagree with this one: "I’d cease to enforce all absentee title to vacant and unimproved land, which would result in market competition driving out a major part of current land rents and mortgages." I agree with this one in some particular cases, such as: (a) state BLM lands that were never homesteaded in the first place; (b) perhaps other "unimproved" land that is nominally owned by a private owner only under color of title by a state grant, and where the land was never actually homesteaded (but I imagine this is a vanishingly small case). But in my view it is unlibertarian (and thus unjust and socialistic) to strip ownership from a private owner of land that was formerly actually homesteaded but is now merely vacant–so long as the land is not (i) explicitly abandoned, or (ii) squatted on for a long time by some adverse possessor where the owner did not do anything about it. In other words, it is wrong to strip title from a private, "absentee" owner of vacant property that was at one point actually homesteaded and used and that is not abandoned and not subject to an adverse possession claim.
The rest of your proposals seem more or less objectionable but I am not sure any of them would have significant effects.
What would have a huge effect would be a significant reduction in taxes, which is missing from your list. Taxes of all types ought to be slashed by 25%, 50%, etc. How can you leave taxation off this list? It is probably the number one thing, even more than patent and copryight.
Other reforms you should mention would be: repeal of minimum wage, repeal of pro-union legislation (including repeal of "right to work" legislation!), and repeal of antitrust law. These three would, in my view, be more significant improvements most of the ones you suggest.
My recent post Anarcho-Capitalism and Intellectual Property Right- Consistency FAIL
Excellent. But I think you left out a big one: occupational licensing requirements. Nothing wrong with private organizations establishing credential systems and people choosing to rely on them, but the ability of licensing boards to limit competition is a serious impediment to self-employment.
I'd also include the repeal of the self-employment tax. While the type of low-overhead businesses you described probably won't make enough to subject the worker to meaningful personal income taxes, the self-employment tax forces everyone grossing more than $400 a year to keep all the records necessary to calculate the 15%+ taxes they'll owe on their net. That is a major burden on a part-time business.
My recent post David Nolan- RIP
Kevin, I had a post earlier but it maybe got lost. Waht I said was: I agree w mos of this, except the absentee stuff. For a private owner of a vacant but formerly homesteaded property, he owns it, unless he expressly abandons it, or it's been appropriated by adverse possession for a long time.
I fear most of your proposals, other than IP, are minor. It's striking you left out more significant ones like taxes, minimum wage, and pro-union legislation.
My recent post Anarcho-Capitalism and Intellectual Property Right- Consistency FAIL
Instead of just declining to enforce absentee titles to land under some circumstances, I'd propose an end to a system of title entirely, and simply move to a common sense possession/use model, eliminating feudalism (landlord/tenant relationships) entirely. Thus control over something along the lines of a business or factory could only be maintained by consent of the workers who hold day-to-day control over the facilities.
very well said!
My comment may not be entirely on point, but I'd like to see homesteading
of abandoned property. Actual recognized homesteading, not squatting.
Land, urban or rural, improved or unimproved, that has been abandoned
should be available for people to move onto, occupy and improve and
establish a valid claim.
I can imagine 'wagon trains' of cars, SUV's and pick ups full of families
and individuals staking claim to whole blocks of abandoned properties in
Detroit and refurbishing existing buildings and erecting new ones and
starting home based businesses or engaging in urban farming, etc. The same
could happen on the empty prairies or abandoned farms and factories that
are scattered across this nation.
Thank you, Mr. Carson. You have noticed how everyone is spinning their wheels trying to keep this rotten old structure going. The laws protect the technology which protects the capital which in turn supports the legal system reciprocally and so forth and so on, and around we go in a circle. But it is not a virtuous circle, it is hell. Now the musical chairs have stopped. We need to finally set these rotten old systems aside, and start living like human beings.
We can all agree on the present distribution of property is very unfair. If you want people to understand why the latest crisis does not stem from the "free market" what you need a quick showstopper with so many different explanations out there. Only one economists has proven his merits in his career lasting more than 30 years as forecasting depressions. Fred Harrison. In short, we get the violence of a property cycle as long as we allow banks to monetize and expand credit on land values. In this respect the biggest government intervention is the sanctioned and protected private enclosure of the "public" ground rent. Harrison set forth a thesis and predicted the depression of 1991/2 in his book "Power in the land" from 1983 and forecasted the present crisis back in 1997 that is elleven years ahead of time (and to exact quarter). You need to show people the great turning points can be predicted using just one variable: fall and rise of land of land values. This leaves us with a capital goods market relatively functioning despite all the flaws so well outlined by mr. Carson. The land tenure system is defect and primary culprit. Nothing new, as Hoyt noted, 1830-1933, Chicago: http://img573.imageshack.us/img573/1649/hoyt.jpg
Stephan, if Kevin wants title enforcement to stop only for "vacant and unimproved land," that seems to mean land that in fact never was homesteaded by Lockean principles. So what's wrong?
My recent post Nothing Natural about It
"What a wonderful world it would be."
My recent post Nothing Natural about It
Sheldon, you have a point. I wondered about that. If by unimproved he means it has never been homesteaded, I would probably agree. But I don't agree with "armchair libertarian" hard and fast rules (see http://blog.mises.org/archives/005391.asp and http://blog.mises.org/9923/the-libertarian-view-o…. I can imagine a successful homesteading that is an *embordering* where the land you emborder (say fencing in a plot of land for a farm or homestead) is not yet "improved." So I was not clear that by "unimproved" he meant only vast tracts of land–such as national forests etc.–and was excluding small, embordered (and thus arguably homesteaded) tracts of land.
Still, I do think many of his proposals are much more minor than he thinks; and he conspicuously left out some huge ones, as I mentioned: union laws, minimum wage, antitrust law, and TAXES. Those are all HUGE. (not to mention other things like public education, the military, wars, and so on.)
What do you think?
My recent post TechFreedom
It seems like the distinction between trespassers and subsequent occupiers boils down to whatever rules of abandonment are accepted within the relevant community.
Great comment, Stephan.
Stephan: As Sheldon says, the word "unimproved" means the land was never homesteaded.
Well, normally in standard legal/accounting language, "unimproved" does NOT mean never-homesteaded. That's why I was not sure.
My recent post TechFreedom
Kevin, I had a post earlier but it maybe got lost. Waht I said was: I agree w mos of this, except the absentee stuff. For a private owner of a vacant but formerly homesteaded property, he owns it, unless he expressly abandons it, or it's been appropriated by adverse possession for a long time.
My recent post TechFreedom
Stephan, I think you're clearly right that there are more things to be added to the list, and what Kevin's written elsewhere makes it evident that he agrees. K also think you're right to question hard and fast rules.
I'd like to push you on just one point here, though. There certainly needs to be a way of homesteading land one intends to use as, say, a woodland park—if claiming land required cultivation, then one could never claim land precisely in order to ensure that it could be enjoyed in its uncultivated state. Roderick has helpfully discussed this sort of thing before. And embordering a small plot is going to amount to establishing actual possession of the plot. But, apart from a case in which one's intention is to create a park or one in which one emborders a small plot, I'm a little nervous about embordering as a strategy for claiming land, without more. If I cultivate a space *around* a vast tract of land, without doing anything inside the border I've created, it's not obvious why you shouldn't be able to treat the uncultivated land within the border as ripe for homesteading (perhaps enjoying a prescriptive easement for entry and egress if you do so). Put another way: there seems to be no factual difference as regards your behavior vis-a-vis the land between (i) a case in which you cultivate a comprehensive border with the goal of claiming what lies within the border and (ii) a case in which you cultivate land that happens to serve as a comprehensive border surrounding other land without, per se, intending to claim the surrounded land. And I think there's an argument for resolving the ambiguity in favor of treating fully uncultivated embordered land in at least some cases as ripe for homesteading. We can observe that (a) rules awarding land to those who homestead it minimize conflict over land people actually possess and so are able to defend, (b) actual possession–effected by homesteading (and I'm not distinguishing here between personal possession and occupancy by agents; I am more Lockean on these matters than Kevin tends to be)–provides a simple rule for determining who owns what, (c) such rules both incentivize and reward effort, (d) such rules maximize productive use of land, etc. But I don't think any of these rationales obviously tilts in favor of treating just any instance of embordering as sufficient to establish title to embordered land, rather than just the border-land itself, by homesteading. And it further seems as if a rule that treats everything within a cultivated comprehensive border as claimed by the person doing the cultivating is going to reward lazy would-be homesteaders. I don't think embordering will never be OK, but it may sometimes provide a fairly thin basis for title.
My recent post Santa Claus- America’s Most Wanted Fugitive
"ride out periods of *un* employment?
If I were the Grand Wazoo I'd first abolish the Federal Reserve, the IRS, the DEA, Department of Education, all import duties, all foreign "aid" Then I'd have lunch. Afterwards I'd declare that America The Beautiful is the new official national tune and relegate that "bombs bursting in air" tune to the dustbin. In the afternoon I'd take "abolish" requests from everyone here plus a few others.
Great article, some really good ideas that would likely appeal to many on both the left and the right (of course I'm reffering to people on the left and right, not corporate politicians that pretend to be liberal or conservative for marketing purposes).
A few comments I would make:
1. While there is much truth to your statement that the current financial crisis was preceded by a long period of government intervention, I think it is important to remember that the previous crisis of this magnitude (the Great Depression) came after a period of relatively low intervention in the economy. Also our current crisis happened at the tail end of an interventionist period which had already moved into a phase of deregulation, or intentional non-enforcement. I do not argue that more intervention is the solution necessarily, just that government intervention is but one tool, but one means, by which the winners of economic competition can use their ammassed wealth to maintain their status, not by out-competing, but by preventing competition. This, I believe is the cruz of the problem created by the disparities of wealth you mentioned. Technologies such as railroads, traditional media and assembly line manufacturing – which lend themselves to well the monopolies – have also been used to a similar effect. The same as many people on this site might hope a technology with a more decentralized nature – the Internet – can be used to do the opposite.
2. I whole-heartedly agree that patents and copyrights are widely abused. However, if we are to abolish them all together, rather than reform them, I think we need some sort of concept of how we incentivize innovation and R&D. I know this sounds like a typical industry line, but I think they are disingenuously using a legit point to defend over the top, excessive, and anti-competitive laws.
3. I understand some people's concern with the abandoned property aspect, but I think this is hugely important. Otherwise economic actors will continue to distort market by keeping land (i.e. forclosed homes) off the market and thus artificially reducing supply to drive up price. The devil in the details, of course, is how you define abandonment so as not be used as a tool to unrightly seize property.
4. My only comment with allowing more competition in credit markets is this. If the banks gets operate outside government barriers and restriction they must also loose government insurance from the FDIC. If they wish to have a private insurance that is not back by the full faith and credit of the USG, than fine. Consumers then could choose the government insured but more restrictive banks, or the more open but perhaps more risky non government backed banks. But insurance without regulation (i.e. when we repealed Glass-Steagal but kept the FDIC with its government backing) is a moral hazard we cannot afford in banking. So government insurance and government regulation; or private insurance and private regulation. But let's not mix and match, because privatized gains and socialized losses just ain't working.
Lastly, I love the point on zoning laws. If you go to many ethnic communities in this country you will find the economy already works much more on this micro scale (after all, that's how it is in most other countries). These businesses tho often get labaeled illegal and the "average American" is encouraged to associate this type of economy with the poor, foreign, and dark skinned. But we all probably know that rich people in America are quite fond of using racial fears and prejudices to manipulate markets in their favor.
Great point, requiring land to be used in order to maintain ownership would encourage exactly the sort of wasteful over production (which is naturally followed by the promotion of wasteful over consumption) that Kevin associates with the current mega-industrial model of business.
Love it! Good idea!
I don't agree with the absentee landowner ideas here, but I would be interested in testing these ideas in Detroit, where there is so much abandoned property — a homesteading system, especially with radically less regulation as suggested above, would have a chance to show what it can do (or not). It would be a wild & wonderful experiment with virtually no downside (since the economic value of the property in question right now is zero or even sub-zero!).
http://libertariandoctrine.blogspot.com/
— Check out my new blog. I talk about the tragedy and how despicable the media has become. I just started. so a new following would be nice.
Thanks!
Amen! At the very least, break the title monopoly held by the state and see where it leads. Let the virtue of private property rest on its genuine ability to prevent net conflict, instead of preventing conflict on competing property claims only to offset it to other conflicts that metastasize as class, rent, and privilege issues.
It would be interesting to study the behavior of people who actually homesteaded land to be used personally, instead of as some sort of "grab and sell" swooping in. I wonder how rivalrous, say, English peasant behavior on marginal land was, or settler behavior absent large grazing operations made possible by capital-intensive meatpacking. I'm willing to bet, from my armchair, heh, that the combination of economic interventions with centralized monopoly title distorts behavior in the direction of rivalry (perhaps because, as Butler Shaffer argued, conflict promotes institutions that centralize power and authority).
I agree with Stefan that so-called "armchair analysis" should not dictate proper rules here, but by the same token rigid rule sets that do not take a broader understanding of why private property would be desirable are just as dangerous. The imagination is the inspiration here, but it is not the justification.
My recent post Why Im Not an Elitist
what about the biggest tool of wealth-disparity creation out there, the banking and credit system? It seems like the nearly unfettered access to credit by powerful inside players contributed to this bubble. ?
KEVIN WROTE: "I’d fund all long-distance transportation with user fees, and make the heavy trucks pay 100% of the cost of the roadbed damage they cause." Allow me to expand a bit more on this. A rule of thumb. A truck does inflict damage equivalent to 10000 personal cars. Additional weight grows damage exponentially. A big loaded truck does the same damage equivalent to 50000 personal cars. Best regards /M
This is the reason why people work abroad to earn more than what they can earn in their country. This is also the reason why new york loan modification lawyers have easier jobs because foreclosed homes are much easier to solve.
Hell yeah! Down with the state!