But we needn’t regard inequality as a weak point in our arguments for economic freedom, or as an issue on which we simply cannot win. Existing economic relations are not the product of freedom of exchange or legitimate private property. Libertarians actually hold the high ground on the inequality issue. Liberty and equality in fact complement and reinforce one another, the former naturally resulting in the latter.

Individualist anarchists like Lysander Spooner held that “extremes in both wealth and poverty” resulted from “positive legislation,” substituting arbitrary laws for natural laws and “establish[ing] monopolies and privileges.” In capitalism, Spooner argued, the owners of capital receive special power in the economy — power having nothing to do with simple freedom of production, exchange, and competition. Considered holistically, state intervention redounds to the benefit of the rich and politically connected, economic elites with special access to those who write and implement the rules we are all forced to live by.

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With a narrow sliver of the populace hoarding so much of the country’s wealth, policy wonks and academics busy themselves pointing fingers and proffering solutions. Predictably, free markets come under fire as the source of widening inequalities of wealth and income. As exponents of deregulation and free markets, libertarians frequently find ourselves charged with living in a fantasy world, tuning out problems of inequality.

We libertarians do it to ourselves: When the subject inevitably comes up, too many of us become palpably uneasy, defensively insisting that inequality just isn’t a problem, that what we ought to look at is standard of living or some other metric. “Capitalism is great for the poor — we swear it!” Libertarians must accept the cold fact that inequality is a very big problem indeed.

But we needn’t regard inequality as a weak point in our arguments for economic freedom, or as an issue on which we simply cannot win. Existing economic relations are not the product of freedom of exchange or legitimate private property. Libertarians actually hold the high ground on the inequality issue. Liberty and equality in fact complement and reinforce one another, the former naturally resulting in the latter.

Individualist anarchists like Lysander Spooner held that “extremes in both wealth and poverty” resulted from “positive legislation,” substituting arbitrary laws for natural laws and “establish[ing] monopolies and privileges.” In capitalism, Spooner argued, the owners of capital receive special power in the economy — power having nothing to do with simple freedom of production, exchange, and competition. Considered holistically, state intervention redounds to the benefit of the rich and politically connected, economic elites with special access to those who write and implement the rules we are all forced to live by.

These interventions are not perfect, and certainly the country’s system of monopoly capitalism is overlaid with a veneer of measures ostensibly intended to protect workers, consumers, and the poor. But no such measure ever compromises the fundamental purpose of state intervention — to dispossess rightful owners, putting the multitudes at the mercy of employers. The historical purpose of the state, in short, is permanent class war, the use of state power to insulate a socioeconomic nobility.

The political left is thus quite right about inequality, even while tending to be quite wrong about freedom, individual rights, and markets. Market anarchists favor both freedom and equality, espousing a stateless society in which the ultimate law is equality of freedom and authority.

Genuine open competition is a dissolving and dispersive force. Libertarians should stop making apologies for today’s staggering inequalities as if we arrived at this place via laissez faire and sovereignty of the individual.

The Nobel laureate economist surely understands that monopsony entails a sole buyer, not merely “a dominant buyer with the power to push prices down” in a particular market. Whatever its other faults, Amazon is no sole buyer, nor even part of an ogliopsony (a small cartel of buyers.)

Publishers can sell books through any number of retailers: Barnes & Noble. Apple. Google. Powell’s. Kobo. Countless independent eBook and print-on-demand shops. Authors can even publish on their own websites, selling directly to readers. Amazon is an immensely popular and lucrative option for authors and publishers, but by no means the ONLY option.

Krugman’s pretext contra Amazon is its current feud with major publisher Hachette, which denied Amazon an increased cut of the action on its titles. He senses an ominous power play in Amazon’s retaliation by “delaying their delivery, raising their prices, and/or steering customers to other publishers”.

It ain’t pretty, but brick and mortar businesses do the equivalent every day: Shelving the most profitable items at eye level while less lucrative items get bottom-shelf space if they get any at all.

“It’s not just about the money,” writes Krugman, always a sign that it is just about the money. Although Hachette is not Krugman’s publisher, if it surrenders in the price war, other big boys like Krugman’s publisher, W.W. Norton, won’t bother to fight. So yes, Krugman’s own bottom line is at stake.

But Krugman’s ultimate reason for picking Hachette’s dog in the fight between two sectors of big business — and his real beef with Amazon — seems to be, of all things, that Amazon reduces the very income inequality Krugman famously specializes in condemning.

Amazon’s existence lowers book prices for readers in multifarious ways, from selection competition to electronic editions to its online marketplace for used copies. Yet Amazon has simultaneously diminished the cost for anyone to publish and sell books and earn money. By offering an alternative to the genuine near-monopoly of capital-intensive big publishers, Amazon distributes those lower prices and that new revenue more evenly among readers and authors.

Hachette and Krugman know they can’t turn back the clock that produced Amazon’s burgeoning marketplaces, preferring to benefit from them, but are convinced Amazon owes them a walled garden, sparing them price competition with the rabble. They want Amazon to preserve their income inequality at the expense of its customers.

Contra Krugman’s beloved historical myth that “the robber baron era ended when we as a nation decided that some business tactics were out of line,” any potential robber-baron power Amazon wields depends on the very same uniform, artificially large-scale federal transportation and postal shipping infrastructure that locked in the profits of the Gilded Age business cartels. Dismantling those subsidies, not propping up publishing’s Hachettes, would be the real way to keep Amazon honest.

Among those who take issue with the Pope’s statement is Keith Farrell, a Students For Liberty campus coordinator at the University of Connecticut (“Why the Pope is Wrong on Inequality,” City A.M., Aug. 21). He accuses the Pope of “scapegoating world poverty on the wealthy” and credits Marx with first coming up with the idea “that the success of some hurts others economically and that the rich have only gotten rich at the expense of the poor.” Farrell quotes a South Korean: “If someone has made a fortune for himself, fair and square, and has a lot of money, I don’t think that’s something to be condemned.”

An interesting hypothetical, but just how much of the economic elite’s growing concentration of wealth actually was made “fair and square?” Throughout his op-ed, Farrell implicitly equates the system we live under now with “economic freedom” and “free enterprise.” But that’s an example of what I call “vulgar libertarianism,” defending actually existing corporate capitalism as though it were a free market, and using “free enterprise” rhetoric to defend wealth and economic power which corporate capitalists have actually amassed through an overwhelmingly statist system of power.

Marx was hardly the first to figure out that in a class society, ruled by a class state, the rich get rich at the expense of the poor. It probably dawned on some Sumerian or Chinese peasant busting his hump with a hoe trying to produce enough to live on after paying rent to a temple priesthood. And plenty of radical free market thinkers — Thomas Hodgskin, Benjamin Tucker, Franz Oppenheimer — have drawn the same conclusion more recently. The capitalist system we live under today is the lineal heir to the state-enforced class systems of thousands of years ago.

“Free markets,” far from structurally defining capitalism, are permitted to operate on its margins only to the extent that they’re compatible with the propertied interests controlling the state. Even in the supposedly “laissez-faire” nineteenth century, “free enterprise” was a superstructure erected on a foundation of centuries of massive robbery — the enclosure of land and dispossession of the peasantry, first in the industrializing West and then the colonial world, massive restrictions on the free movement and association of working people in industrial Britain, slave labor and the seizure of global mineral wealth. Today many of the fruits of that robbery, like absentee titles to vacant land and corporate ownership of Third World natural resources, and a monopoly on the supply of credit and the medium of exchange by the owners of stolen wealth, are still legally enforced.

Corporate capitalism today depends on even more statism — “intellectual property,” regulatory cartels and other entry barriers, and massive direct subsidies in such forms as the Military-Industrial Complex and the civil aviation and Interstate Highway systems.

It’s true, as Farrell says, that standards of living have increased in absolute terms despite the rise in inequality — true as far as it goes. But the advantages of technological progress are governed by the same targeted pricing that governs all monopolies: Giant corporations use patent monopolies to enclose technological progress and let just enough of the benefits of increased productivity trickle down to the working classes to make it worthwhile for them to keep buying, while appropriating the rest as monopoly rents for themselves.

Farrell’s statement that “capitalism has brought freedom and abundance” to South Korea bears similar looking into. South Korean capitalism was built on the foundation of US military occupation and a military regime installed by the occupation authority, which subsequently liquidated the quasi-anarchist society of self-governing village communes and self-managed factories that had emerged after the Japanese pullout in 1945. This regime put anarchists and leftists of all kinds in mass graves, and during its decades in power wasn’t exactly friendly to the “economic freedom” of — say — Korean workers who wanted to unionize.

Interestingly, Farrell shares one erroneous assumption with Pope Francis: That reducing inequality requires government “redistribution of wealth.” They’re both wrong. What we have now amounts to an upward redistribution of wealth, with “taxes” on the producing classes in the form of the state-enforced monopoly rents we pay to landlords and capitalists. We don’t need state intervention to redistribute wealth downward. We need revolution to stop the state from redistributing wealth upward.

It’s time for free marketers to stop acting as hired prize-fighters for the present system of power, and start using free market ideas to defend actual economic justice.

Translations of this article:

• Spanish, Por qué el Papa está menos equivocado que Keith Farrell.

Al writes:

In economics, both orthodox Communism and Libertarianism are equally wrong, callous, and dangerous examples of ideological blindness, a set of principles taken to an extreme that caused many people to die. Both are more alike than either set of fanatics (as both set of true believers are) would want to admit. Both fall back on the same defense of “there has never been a true or pure form”of their system. Both systems clearly failed. Communism only lasted 70 years in the first nation to have it, and killed tens of millions with purely man made famines and extreme repression. Libertarianism and its influence on US conservatism takes the greatest share of blame for extreme economic inequality, the Great Recession, and most financial elite crime waves of the past 30 years.

As usual with many critics, he fails to take account of different brands of libertarianism. He only refers to a seemingly singular “libertarianism”. This will be written from a left-libertarian market anarchist perspective. The cliched “you claim your system has never existed in pure form” is trotted out. Democracy has probably never existed in pure form either, but that doesn’t mean it isn’t viable. There have been particular libertarian policies implemented with some success such as drug decriminalization. It may be true that the full libertarian package has never existed in systematic form, but this doesn’t mean it can’t exist. Liberal democratic societies never did and now do.

It’s partially unfair to pin economic inequality on libertarians, because they have hardly been in charge. Some libertarians will justify inequality, but there is good reason to think that freed markets would produce less inequality. That will be the subject of a future blog post. As for blaming the Great Recession on libertarianism; it’s once again worth pointing out that libertarians aren’t in charge. A detailed examination of why libertarians aren’t to blame for economic recessions or depressions will have to come later though. Libertarians oppose fraud by financial elites or anyone else, so it’s silly to blame us for the crime wave emanating from said people.

The question then becomes, to what degree should there be a mixed system? The slogans of libertarians and many conservatives that “government is the problem” or “regulation doesn’t work” are easily proven wrong, and fairly foolish falsehoods.

Conservative protestations against government are often hypocritical and insincere. It’s also true that these questions require defining what constitutes a problem and by what standard of value doesn’t regulation work. The New Leftist historian, Gabriel Kolko, documented the purpose regulations served in concentrating economic power and resources:

As Gabriel Kolko demonstrates in his masterly The Triumph of Conservatism and in Railroads and Regulation, the dominant trend in the last three decades of the nineteenth century and the first two of the twentieth was not towards increasing centralization, but rather, despite the growing number of mergers and the growth in the overall size of many corporations,

toward growing competition. Competition was unacceptable to many key business and financial leaders, and the merger movement was to a large extent a reflection of voluntary, unsuccessful business efforts to bring irresistible trends under control. … As new competitors sprang up, and as economic power was diffused throughout an expanding nation, it became apparent to many important businessmen that only the national government could [control and stabilize] the economy. … Ironically, contrary to the consensus of historians, it was not the existence of monopoly which caused the federal government to intervene in the economy, but the lack of it.1

He also writes:

This article argues some basic humanitarian principles should be applied to economics and the human and humane spheres or politics, ones so obvious it seems absurd to have to make them explicit:

1. Helping people obviously helps people more than not helping them.

2. Watching out for and preventing or stopping abuse and harm is obviously better than not watching and not stopping abuse and harm, or even refusing to look and denying harm exists.

3. Generosity and selflessness are obviously better than stinginess and selfishness,

4. Democratic control obviously is better than elite control.

There is nothing in these four points that a libertarian could not embrace. There are ways of helping people that don’t require government or state intervention. These approaches are known as mutual aid societies. The prevention and stopping of abuse is compatible with libertarianism, because we believe said action is a justifiable response to rights violations. Some libertarians are egoists, but this is not the only ethical viewpoints that has been adopted. The rational egoist definition of selfishness as elaborated by Ayn Rand is not what you typically refer to as egoism. It pertains to not sacrificing others to yourself or yourself to others. Libertarians have an admittedly uneasy relationship with democracy, but the left-wing market anarchist position is democratic in the sense that it grants everyone an equal right to control their own lives and make decisions affecting them. That’s all for now. Stay tuned for my next blog post on this article!

But we needn’t regard inequality as a weak point in our arguments for economic freedom, or as an issue on which we simply cannot win. Existing economic relations are not the product of freedom of exchange or legitimate private property. Libertarians actually hold the high ground on the inequality issue. Liberty and equality in fact complement and reinforce one another, the former naturally resulting in the latter.

Individualist anarchists like Lysander Spooner held that “extremes in both wealth and poverty” resulted from “positive legislation,” substituting arbitrary laws for natural laws and “establish[ing] monopolies and privileges.” In capitalism, Spooner argued, the owners of capital receive special power in the economy — power having nothing to do with simple freedom of production, exchange, and competition. Considered holistically, state intervention redounds to the benefit of the rich and politically connected, economic elites with special access to those who write and implement the rules we are all forced to live by.

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• https://itunes.apple.com/us/podcast/c4ss-media/id872405202?mt=2
• http://www.stitcher.com/podcast/smash-walls-radio/c4ss-media?refid=stpr
• https://twitter.com/C4SSmedia

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