Some people might see an internal contradiction between Hoppe’s repeated use of the term “dominated” to describe the role of certain privileged segments of society, and the idea that “libertarian” ideas were formulated by societies based on domination.

But obviously Hoppe does not, since he makes little effort to hide his salivation at the prospect that his avowedly principled belief in self-ownership, non-aggression and rules of initial acquisition will have the effect — just coincidentally, of course — of perpetuating the domination of these same white heterosexual males. So the primary beneficiaries of the ideas of liberty that straight white men invented will be those same straight white men.

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Perry does have a point where federal income taxes are concerned. “After transfer payments, households in the bottom 60% are ‘net recipients’ with negative income tax rates, while only the top two ‘net payer’ income quintiles had positive tax rates after transfers in 2011.” The income tax burden falls heavily on the higher income quintiles.

But the tax code is far from the only factor that determines whether or not a particular quintile pays its “fair share.” To determine this, we need to move beyond vacuous political rhetoric like “fair share.” While greedy politicians endlessly and manipulatively repeat the phrase, it’s unclear what people — including Perry — even mean when they use it.

The economic relationship between the quintiles is the real issue. It’s clear where AEI’s thought leaders stand. They view the relationship between the upper and lower quintiles as one of exploitation, where certain quintiles extract value from the others. They just have the relationship reversed.

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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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Leggendo un rapporto sugli introiti provenienti dalle tasse federali sul reddito scritto dalla Commissione Bilancio del Congresso (Cbo), Perry deduce: “i ricchi pagano più della loro giusta quota del carico fiscale, e sarebbe ora che cominciassimo a chiederci se non è semmai il 60% più povero a non pagare la sua quota equa.” L’argomento ha a che fare più con l’analisi di classe che con le tasse. Nascosto nell’ombra, infatti, c’è l’intervento statale che infetta ogni transazione economica.

Perry ha ragione quando parla della tassa federale sul reddito. “Nel 2011, al termine del processo di trasferimento della ricchezza, il 60% più povero delle unità famigliari risultava ‘incassatore netto’ con un’aliquota negativa, mentre il restante 40% era formato da ‘pagatori netti’ con un’aliquota positiva. Il peso della tassa sul reddito dunque ricade pesantemente sui due quintili più ricchi.

Ma il fisco non è affatto l’unico fattore da prendere in considerazione se si vuole capire se un dato quintile paga o meno la sua “quota equa”. Dobbiamo andare oltre termini politici vuoti come “quota equa”. Se gli avidi politici non fanno altro che ripetere strumentalmente l’espressione, non è chiaro cosa intenda la gente, compreso Perry, quando la usa.

La vera questione è la relazione tra i vari quintili della popolazione. Da che parte stiano le menti dell’AEI non è chiaro. Pensano che la relazione tra i quintili più ricchi e quelli più poveri sia una relazione di sfruttamento, ovvero una parte estrae ricchezza dal resto. A parti invertite, però.

In un mercato libero, la relazione tra quintili (sempre che esistano) sarebbe simbiotica, caratterizzata dal mutuo interesse personale e dal mutuo profitto. Dopotutto, in un mercato libero affinché ci sia un interscambio occorre che entrambe le parti ne traggano beneficio. Chiunque sia libero di disporre di ciò che possiede e di scegliere autonomamente è anche libero di partecipare spontaneamente a qualunque interscambio mutuamente vantaggioso.

La cosa cambia quando ci sono coercizioni. Quando il potere diventa un fattore di una transazione precedentemente volontaria, la relazione tra le parti diventa una relazione di sfruttamento piuttosto che di mutuo beneficio. E il problema è che noi non viviamo in un mercato libero. Viviamo in un mercato dominato dal potere statale.

Se è vero che la politica fiscale va contro i ricchi, è anche vero che gran parte delle restanti politiche sortiscono l’effetto contrario. Gran parte delle leggi nascoste nell’ombra del mondo economico promuove la concentrazione del potere economico nelle mani di poche, ricche clientele politicamente protette.

La politica monetaria, ad esempio, premia chi per primo riceve la nuova moneta (le grandi banche) a spese di tutti gli altri, che poi devono fronteggiare l’aumento dei prezzi quando i nuovi dollari arrivano a loro. Poi c’è la proprietà intellettuale, che crea e protegge diritti artificiali e impedisce ai nuovi arrivati di competere. E ancora leggi urbanistiche, ordini professionali, regolamenti sulla sicurezza, requisiti di capitalizzazione e altre forme di burocratismo che frenano la competizione e beneficiano le grandi imprese già nel mercato a spese di quelle più piccole, dei potenziali concorrenti, di chi è agli inizi e di tutte quelle forme di impiego alternativo. E la lista non finisce qui.

Lo stato è responsabile della disuguaglianza strutturale, ma riesce a confondere i sostenitori del libero mercato inducendoli ad accusare il quintile sbagliato con politiche secondarie (come le tasse e i trasferimenti). Perry si limita agli effetti visibili dell’attuale politica fiscale, ignorando gli effetti invisibili di altri interventi statali nascosti nell’ombra, che frenano ogni possibile concorrenza e innovazione. In breve, il clientelismo e una politica che concentra la ricchezza non fanno altro che impedire un mercato altrimenti libero, e più che compensano gli effetti della tassazione.

Traduzione di Enrico Sanna.

Perry concludes from a CBO federal income tax report that, “’the rich’ are paying beyond their fair share of the total tax burden, and we might want to start asking if the bottom 60% of ‘net recipient’ households are really paying their fair share.” But there is more to class analysis than taxes. Other government interventions lurk in the background, infecting every economic transaction.

Perry does have a point where federal income taxes are concerned. “After transfer payments, households in the bottom 60% are ‘net recipients’ with negative income tax rates, while only the top two ‘net payer’ income quintiles had positive tax rates after transfers in 2011.” The income tax burden falls heavily on the higher income quintiles.

But the tax code is far from the only factor that determines whether or not a particular quintile pays its “fair share.” To determine this, we need to move beyond vacuous political rhetoric like “fair share.” While greedy politicians endlessly and manipulatively repeat the phrase, it’s unclear what people — including Perry — even mean when they use it.

The economic relationship between the quintiles is the real issue. It’s clear where AEI’s thought leaders stand. They view the relationship between the upper and lower quintiles as one of exploitation, where certain quintiles extract value from the others. They just have the relationship reversed.

In a freed market, the relationship between quintiles (to the extent that they would exist) would be symbiotic, characterized by mutual self-interest and mutual gains. After all, an exchange only happens in a freed market when both parties expect to benefit. People free to dispose of their own property and make their own choices naturally engage in cooperatively advantageous trade.

When coercion enters the picture, the story changes. When force is introduced into a previously voluntary transaction, the relationship becomes one of exploitation rather than mutual benefit. And the fact is that we don’t live in a freed market. We live in a market dominated by state violence.

While the federal tax code is skewed against the rich, the great majority of other government policy has the opposite effect. Most laws that lurk in the background of the economy promote the concentration of economic power in the hands of a few, politically entrenched rich cronies.

Monetary policy rewards the first receivers of new money (big banks) at the expense of everyone else who face higher prices once the new dollars trickle down to them. Intellectual property protects artificial rights and prevents newcomers from competing. Zoning laws, licensing restrictions, safety regulations, capitalization requirements, and other kinds of red tape impede competition and benefit already existing, larger firms at the expense of smaller firms, potential newcomers, start-ups, and alternative forms of employment. The list goes on.

That state is responsible for structural inequality, but tricks free market advocates into blaming the wrong income quintiles with secondary policies (like taxes and transfers). Perry focuses on the seen effects of current tax policy, ignoring the largely unseen effects of other, background government interventions that prevent would-be competition and would-be innovation. Statist cronyism and wealth-concentrating policies continually stifle the would-be free market and far outweigh the effects of after-the-fact taxation.

Translations for this article:

• Italian, Quando si Ignora Ciò che non si Vede.

The Left… is convinced of the fundamental equality of man, that all men are “created equal.” It does not deny the patently obvious, of course: that there are environmental and physiological differences, i.e., that some people live in the mountains and others on the seaside, or that some men are tall and others short, some white and others black, some male and others female, etc.. But the Left does deny the existence of mental differences or, insofar as these are too apparent to be entirely denied, it tries to explain them away as “accidental.”…

In fact the Left (or at least most members of it) does not deny that there are differences in individual ability and intellect. But never mind that. Hoppe isn’t satisfied to stop there:

…[The right libertarian] realistically notices that libertarianism, as an intellectual system, was first developed and furthest elaborated in the Western world, by white males, in white male dominated societies. That it is in white, heterosexual male dominated societies, where adherence to libertarian principles is the greatest and the deviations from them the least severe (as indicated by comparatively less evil and extortionist State policies). That it is white heterosexual men, who have demonstrated the greatest ingenuity, industry, and economic prowess. And that it is societies dominated by white heterosexual males, and in particular by the most successful among them, which have produced and accumulated the greatest amount of capital goods and achieved the highest average living standards.

Some people might see an internal contradiction between Hoppe’s repeated use of the term “dominated” to describe the role of certain privileged segments of society, and the idea that “libertarian” ideas were formulated by societies based on domination.

But obviously Hoppe does not, since he makes little effort to hide his salivation at the prospect that his avowedly principled belief in self-ownership, non-aggression and rules of initial acquisition will have the effect — just coincidentally, of course — of perpetuating the domination of these same white heterosexual males. So the primary beneficiaries of the ideas of liberty that straight white men invented will be those same straight white men.

Hoppe is fond of arguing that every single bit of naturally scarce property should be assigned to “some specified individual.” From there, in a typical restatement of his stock argument, he goes on to assume the universal appropriation of all land within a country. And with all land in the entire country, including roads, under individual ownership, it follows that nobody can enter the country or travel along any stretch of road without the permission of some private landowner or landowners. This, at one stroke, solves the “problem” of immigration, since — although national borders as such do not exist — no one but an invited employee or bracero can enter a universally appropriated America without trespassing on somebody’s land. It also solves the gay rights “problem” since, the country being composed overwhelmingly of God-fearing Christian folk like Hoppe himself, nobody will want “those people” on their property. If you find the libertarianism of Thomas Paine and William Godwin hard to stomach, through the miracle of universal appropriation you (assuming you’re a straight white propertied male) can make your own “free” neo-feudal society in the image of The Handmaid’s Tale.

Maybe everybody else who’s not straight, white or male will benefit from having those smart straight white men managing them for their own good.

Hoppe’s ideas of universal appropriation don’t seem to hold up so well, though, at least from the perspective of someone without Herr Doktor Professor Hoppe’s Mount Rushmore-sized brain. Even among right-libertarians, the usual standard of legitimacy in private appropriation of land is that of John Locke and Murray Rothbard: actual occupancy and use. A piece of land that is undeveloped and unaltered is, by definition, unowned. And the vast majority of land in the United States, as no less a libertarian than Albert Jay Nock noted, is vacant and unimproved. The only way — now and in the foreseeable future — that land could ever be universally appropriated is through what Franz Oppenheimer called “political appropriation” and Nock called “law-made property.” This is the same thing that Rothbard — a name you’d think would carry some weight with Hoppe — called engrossment: the enclosure of land not yet occupied or developed, in order to collect tribute from its rightful owners, the first people to occupy it and put it to use.

Leaving aside Hoppe’s views on the universal appropriation of land and exclusion therefrom of “undesirables,” he also neglects the fact that the benevolent, naturally libertarian white men in the “civilized” West spent a few centuries robbing, pillaging and enslaving the non-European parts of the world that it colonized, before they decided to share the blessings of liberty with them. In the process of doing so, they also destroyed an awful lot of preexisting civilization and gutted a lot of civil society — and wealth — there.

Jawaharlal Nehru argued with some plausibility that Bengal was the poorest part of India because that was its first site of infection by the disease of British colonialism, via Warren Hastings. The British systematically stamped out the Indian textile industry as a competitor with Manchester, and also (starting with Hastings’ Permanent Settlement) robbed most of the population of their property in land and turned local elites into wealth extraction conduits for Empire.

And when these good-hearted white Western males they finally did get around to sharing these nifty new ideas of liberty with the people of color they ruled, they kept all the stuff they’d looted in the meantime — as a reward, I suppose, for their selflessness in inventing liberty for the good of all those brown and black people who would otherwise never have heard of it.

It almost makes you wonder, though, if there wasn’t some other, less costly way those unfortunate people of color might have acquired ideas of liberty.

Speaking of which, I almost forgot David Graeber’s account of consensus-based decision-making as an almost universal phenomenon throughout history, as opposed to Hoppe’s idea of “human rights” and “democracy” being some unique creation of the White Male Canon that required a Manhattan Project-level of effort and genius to come up with. Western conservatives (of whom Hoppe is one) typically see human liberty and self-government as the kind of advance ideas that only white males in places like Periclean Athens or Philadelphia ca. 1787 could come up with. On this assumption, Graeber comments:

Of course it’s the peculiar bias of Western historiography that this is the only sort of democracy that is seen to count as “democracy” at all. We are usually told that democracy originated in ancient Athens — like science, or philosophy, it was a Greek invention. It’s never entirely clear what this is supposed to mean. Are we supposed to believe that before the Athenians, it never really occurred to anyone, anywhere, to gather all the members of their community in order to make joint decisions in a way that gave everyone equal say? That would be ridiculous. Clearly there have been plenty of egalitarian societies in history — many far more egalitarian than Athens, many that must have existed before 500 BCE — and obviously, they must have had some kind of procedure for coming to decisions for matters of collective importance. Yet somehow, it is always assumed that these procedures, whatever they might have been, could not have been, properly speaking, “democratic.”

* * *

The real reason for the unwillingness of most scholars to see a Sulawezi or Tallensi village council as “democratic” — well, aside from simple racism, the reluctance to admit anyone Westerners slaughtered with such relative impunity were quite on the level as Pericles — is that they do not vote. Now, admittedly, this is an interesting fact. Why not? If we accept the idea that a show of hands, or having everyone who supports a proposition stand on one side of the plaza and everyone against stand on the other, are not really such incredibly sophisticated ideas that they never would have occurred to anyone until some ancient genius “invented” them, then why are they so rarely employed? Again, we seem to have an example of explicit rejection. Over and over, across the world, from Australia to Siberia, egalitarian communities have preferred some variation on consensus process. Why?

The explanation I would propose is this: it is much easier, in a face-to-face community, to figure out what most members of that community want to do, than to figure out how to convince those who do not to go along with it. Consensus decision-making is typical of societies where there would be no way to compel a minority to agree with a majority decision—either because there is no state with a monopoly of coercive force, or because the state has nothing to do with local decision-making. If there is no way to compel those who find a majority decision distasteful to go along with it, then the last thing one would want to do is to hold a vote: a public contest which someone will be seen to lose. Voting would be the most likely means to guarantee humiliations, resentments, hatreds, in the end, the destruction of communities. What is seen as an elaborate and difficult process of finding consensus is, in fact, a long process of making sure no one walks away feeling that their views have been totally ignored.

* * *

“We” — whether as “the West” (whatever that means), as the “modern world,” or anything else — are not really as special as we like to think we are; …we’re not the only people ever to have practiced democracy; …in fact, rather than disseminating democracy around the world, “Western” governments have been spending at least as much time inserting themselves into the lives of people who have been practicing democracy for thousands of years, and in one way or another, telling them to cut it out.

Those poor brown folks also arguably had more respect for the idea of “property” than their white instructors, when you consider that the white men selflessly extending the benefits of Western civilization to the rest of the world had already robbed the great majority of their own domestic population of their property (e.g. the Enclosures in England) before they decided that property rights were sacred. And that they went on to loot most of the property of the people in the Third World before they finally adjudged the locals as capable of enjoying the blessings of liberty without white supervision. But by that point, again, the commandment “Thou shalt respect property rights — starting NOW!” wasn’t retroactive — it didn’t apply to the enormous mass of wealth those white men and their ancestors had already looted, and continued to sit on. So the primary effect of those Western ideas about “property rights” was to protect the property rights of landed elites and transnational corporations who retained possession of all the land and mineral resources that previous generations of libertarian Western white men had looted for them under colonialism.

So as it turns out, ordinary people throughout the world had already somehow managed to find ways of dealing with each other as equals and settling their differences peacefully without white Western males thinking up libertarianism for them, and when white Western males finally came around with their new and improved idea of Capital-L Liberty they killed, enslaved or robbed most of the human race as compensation for their benevolence.

There’s a great line in Cool Hand Luke that applies here. One of the guards at the prison farm tells Luke that the clanking of the irons he’s wearing will “remind you of what I’ve been telling you — for your own good.” And Luke responds: “Wish you’d stop bein’ so good to me, Cap’n.”

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.

In April, the National Research Council released a report, The Growth of Incarceration in the United States: Exploring Causes and Consequences. The report explains many of the reasons incarceration rates have increased so dramatically in the United States, and analyzes the consequences of mass incarceration. 

The report largely ascribes the growth of America’s prison population to changes in sentencing policies. Until the 1970’s, the federal and state governments employed a system of “indeterminate sentencing,” in which “sentencing was to be individualized and judges had wide discretion” (72). But over the next few decades, America’s sentencing laws changed drastically. The report identifies three phases of this shift. During the first phase, from “1975 to the mid-1980s, the reform movement aimed primarily to make sentencing procedures fairer and sentencing outcomes more predictable and consistent. The problems to be solved were “racial and other unwarranted disparities,” and the mechanisms for solving it were various kinds of comprehensive sentencing and parole guidelines and statutory sentencing standards.” These changes were designed with liberal goals in mind, and often featured “population constraints” to control the growth of prison populations. The second phase, however, was far more punitive. “The second phase, from the mid-1980s through 1996, aimed primarily to make sentences for drug and violent crimes harsher and their imposition more certain. The principal mechanisms to those ends were mandatory minimum sentence, three strikes, truth-in-sentencing, and life without possibility of parole laws.” The authors characterize the third phase as a “period of drift” with relatively few increases in punitive policies (73).

The authors primarily blame the prison population’s growth on this second phase. They note that “truth-in-sentencing” laws, which require prisoners to serve a minimum percentage of their sentence before being released on parole, substantially increased prison populations. Citing research from the Urban Institute, the authors note that “When implemented as part of a comprehensive change to the sentencing system, “truth-in-sentencing laws were associated with large changes in prison populations”” (80). These laws primarily increase prison populations over the long term. The authors quote Spelman, who notes “Truth-in-sentencing laws have little immediate effect but a substantial long-run effect. This analysis makes sense: Truth-in-sentencing laws increase time served and reduce the number of offenders released in future years; the full effect would only be observed after prisoners sentenced under the old regime are replaced by those sentenced under the new law.”  Because these laws only show their full effects in the long term, many studies understate their impact on incarceration rates. “The Urban Institute, Vera, and RAND studies underestimate the effects of truth-in-sentencing laws on prison population growth because they cover periods ending, respectively, in 1996-1998 (for Ohio), 2002, and 1997. Mandatory minimum sentence, truth-in-sentencing, and three strikes laws requiring decades-long sentences inevitably have a “sleeper” effect,” the report notes (82).

In addition to expanding the prison population, these sentencing policies put a lot of discretion in the hands of prosecutors. The authors note that “Two centuries of experience has shown that mandatory punishments foster circumvention by prosecutors, juries, and judges and thereby produce inconsistencies among cases (Romilly, 1820; Reekie, 1930; Hay, 1975; Tonry, 2009b). Problems of circumvention and inconsistent application have long been documented and understood.” While mandatory minimums, truth-in-sentencing laws, and other mandatory punishments were designed to produce more standardized, consistent, and certain punishment, they can actually have the opposite impact. The authors provide specific examples of how this operates:

“Legislative prescription of a high mandatory sentence for certain offenders is likely to result in a reduction in charges at the prosecution stage, or if this is not done, by a refusal of the judge to convict at the adjudication stage. The issue…thus is not solely whether certain offenders should be dealt with severely, but also how the criminal justice system will accommodate to the legislative charge” (Remington, 1969, p. xvii). Newman (1966, p. 179) describes how Michigan judges dealt with a lengthy mandatory minimum sentence for drug sales: “Mandatory minimums are almost universally disliked by trial judges…. The clearest illustration of routine reductions is provided by reduction of sale of narcotics to possession or addiction…. Judges … actively participated in the charge reduction process to the extent of refusing to accept guilty pleas to sale and liberally assigning counsel to work out reduced charges.” Newman (1966, p. 182) tells of efforts to avoid 15-year mandatory maximum sentences: “In Michigan conviction of armed robbery or breaking and entering in the nighttime (fifteen-year maximum compared to five years for daytime breaking) is rare. The pattern of downgrading is such that it becomes virtually routine, and the bargaining session becomes a ritual. The real issue in such negotiations is not whether the charge will be reduced but how far, that is, to what lesser offense” (Newman, 1966, p. 182). Dawson (1969, p. 201) describes “very strong” judicial resistance to a 20-year mandatory minimum sentence for the sale of narcotics: “Charge reductions to possession or use are routine. Indeed, in some cases, judges have refused to accept guilty pleas to sale of narcotics, but have continued the case and appointed counsel with instructions to negotiate a charge reduction.” (78-79)

This has a variety of consequences. It erodes the deterrence that is supposed to come with harsher sentencing. But perhaps more importantly, “Mandatory punishments transfer dispositive discretion in the handling of cases from judges, who are expected to be nonpartisan and dispassionate, to prosecutors, who are comparatively more vulnerable to influence by political considerations and public emotion” (79). In addition to putting leniency in the hands of prosecutors, harsher sentences enable prosecutors to secure convictions without due process, as they can stack charges in order to coerce defendants into accepting plea bargains.

These harsher sentences also play a key role in producing racial disparities. The report summarizes the literature on racial bias at various points in the criminal justice process, including bias against black people who match particular stereotypes. While this racism is clearly present, the authors argue it is statistically small compared to the impact of sentencing policies. They argue that, “The reason for increased racial disparities in imprisonment relative to arrests is straightforward: severe sentencing laws enacted in the 1980s and 1990s greatly increased the lengths of prison sentences mandated for violent crimes and drug offenses for which blacks are disproportionately often arrested” (96).

If social science had played a leading role in policy discussions, these harsh sentencing laws would likely have been seen as undesirable when they were proposed. Unfortunately, “consideration of social science evidence has had little influence on legislative policy-making processes concerning sentencing and punishment in recent decades. The consequences of this disconnect have contributed substantially to contemporary patterns of imprisonment. Evidence on the deterrent effects of mandatory minimum sentence laws is just one such example. Two centuries of experience with laws mandating minimum sentences for particular crimes have shown that those laws have few if any effects as deterrents to crime and, as discussed above, foster patterns of circumvention and manipulation by prosecutors, judges, and juries” (90). It’s predictable that the state would ignore social science evidence. Voters are rationally ignorant, as the cost of studying relevant social science exceeds the benefits to voters of understanding issues. But worse still, as Byran Caplan documents in The Myth of the Rational Voter, voters are rationally irrational. That is, it is instrumentally rational for them to persist in irrational biases that are directly counter to social science, rather than simply being ignorant and agnostic.

The harsh sentences passed during the 1980s and 1990s have been extraordinarily destructive. They have shifted more power into the hands of prosecutors, undermined proportionality, exacerbated racial disparities in the criminal justice system, and played a key role in bringing us an America that incarcerates more people than any  other nation on earth.

She writes:

By 1987, Ayn Rand acolyte Alan Greenspan had taken over as head of the Federal Reserve, and free market fever was unleashed upon America.

Alan Greenspan was indeed one of the original acolytes of Ayn Rand, but he deviated from pure laissez faire by becoming head of the central bank called the Federal Reserve. The notion that a “free market fervor” emanated from a statist institution like the Federal Reserve is absurd. It may have been in the direction of relatively more freed market freedom, but a fervor implies a massive revolutionary shift. Something I highly doubt occurred, but I am open to evidence otherwise.

The next thing worthy of discussion she wrote was:

People in U.S. business schools started reading Ayn Rand’s kooky novels as if they were serious economic treatises and hailing the free market as the only path to progress

Ayn Rand’s novels do touch on economic themes like corporatism and government management or regulation of the economy. It may not be a full blown economic treatise, but it doesn’t deserve to be dismissed. This left-libertarian market anarchist doesn’t believe the free market or freed market is the only path to progress. A healthy dose of civil society is essential to my theory of political economy and positive change.

Since the ‘80s, the top salaries and pay packages awarded to executives of the largest companies and financial firms in the U.S. have reached spectacular heights. This, coupled with low growth and stagnation of wages for the vast majority of workers, has meant growing inequality. As income from labor gets more and more unequal, income from capital starts to play a bigger role. By the time you get to the .01 percent, virtually all your income comes from capital—stuff like dividends and capital gains. That’s when wealth (what you have) starts to matter more than income (what you earn).

Wealth and income are related. You can also be said to earn wealth too. It doesn’t simply refer to what you already have. I agree that more wealth being acquired through capital rather than labor is a problem, but I don’t see government or the state as the solution. Freed markets will ensure that the only way of getting an income or obtaining wealth is through labor. They will also ensure that the wage of labor is its full product.

Another thing she writes is:

Wealth gathering at the top creates all sorts of problems. Some of these elites will hoard their wealth and fail to do anything productive with it. Others channel it into harmful activities like speculation, which can throw the economy out of whack. Some increase their wealth by preying on the less well-off. As inequality grows, regular people lose their purchasing power. They go into debt. The economy gets destabilized. (Piketty, and many other economists, count the increase in inequality as one of the reasons the economy blew up in 2007-’08.

There are ways to address the above problems without using government or state power. In a left-wing market anarchist society, the productive would be able to keep the product of their own labor. The disconnect between labor and results would not exist, so it would be more difficult to make a ton of cash to hoard. One would have to be continually innovate or rely on the cooperation of newly empowered fellow workers to make staggeringly high levels of money to put away. Speculation can also refer to forecasting the future direction of things, but I see the author as talking about speculation in the context of finances.

Which brings us back to Friedman’s view that people naturally get what they deserve, that reward is based on talent. Well, clearly in the case of inherited property, reward is not based on talent, but membership in the Lucky Sperm Club (or marriage into it). That made Uncle Milty a little bit uncomfortable, but he just huffed that life is not fair, and we shouldn’t think it any more unjust that one person is born with mathematical genius as the other is born with a fortune. What’s the difference?

Actually, there is a very big difference. It is the particular rules governing society that determine who amasses a fortune and what part of that fortune is passed on to heirs. The wrong-headed policies promoted by libertarians and their ilk, who hate any form of tax on the rich, such as inheritance taxes, have ensured that big fortunes in America are getting bigger, and they will play a much more prominent role in the direction of our society and economy if we continue on the present path.

She is partially right that inherited property or wealth has nothing to do with talent. I’d only add that it might represent talent in the form of manipulating the person who gives the wealth away. The rules of society do indeed determine who gets a fortune, and those rules deserve to be changed in the direction of left-wing market anarchism.

What we are headed for, after several decades of free market mania, is superinequality, possibly such as the world has never seen. In this world, more and more wealth will be gained off the backs of the 99 percent, and less and less will be earned through hard work.

Which essentially means freedom for the rich, and no one else.

We don’t live in any society with free market mania. I otherwise agree with her assessment. Look to my next blog post for an explanation and justification of the economic perspective underlying this assessment of Lynn Stuart Parramore’s article.