A recent National Bureau of Economic Research study by Emmanuel Saez and Gabriel Zucman finds that “the top 0.1% of [American] families now own roughly the same share of wealth as the bottom 90%.” Furthermore, the study shows that the “recovery” we keep hearing about hasn’t reached the middle class, with only those atop the economic pyramid seeing its benefits.
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.