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Free-Market Socialism
The following article was written by Sheldon Richman and published at The Future of Freedom Foundation, November 14, 2014.

Libertarians are individualists. But since individualist has many senses, that statement isn’t terribly informative.

Does it mean that libertarians are social nonconformists on principle? Not at all. Some few libertarians may aspire to be, but most would see that as undesirable because it would obstruct their most important objectives. Lots of libertarian men have no problem wearing a jacket and tie, or shoes, socks, and a shirt, on occasions when that attire is generally expected.

Virtually all libertarians observe the common customs of their societies, just as they conform to language conventions if for no other reason than they wish to be understood. I don’t know a libertarian who would regard this as tyranny. In fact, as one’s appreciation of the libertarian philosophy deepens, so does one’s understanding of the crucial behavior-shaping role played by the evolution of customs and rules—the true law—that have nothing whatever to do with the state. Indeed, these help form our very idea of society.

Libertarians are individualists in other respects, however. They are methodological individualists, which means that when they think about social and economic processes, they begin with the fact that only individuals act. That’s shorthand for: only individuals have preferences, values, intentions, purposes, aspirations, expectations, and a raft of other related things. In truth these words don’t actually refer to things we have, but rather to things we do. Strictly speaking, we don’t have preferences; we prefer. We don’t have values; we value. We don’t have purposes; we act purposively. And so on. I’m reminded here of Thomas Szasz’s statement that mind isn’t essentially a noun but a verb. (It follows that one cannot lose it.) A favorite book of mine on this and related matters is Gilbert Ryle’s The Concept of Mind.

From here, it’s a short step to the principle that the unit of morality is the individual person. Morality concerns what individuals should and should not do, and what sort of life is proper for human beings. Interpersonal morality addresses, among other things, when the use of force is permissible (if ever), and this leads into the ideas of rights, entitlements, and enforceable obligations, also attributes of individuals.

None of this disparages the importance of groups, ranging in size from two persons to great societies. But it does implicitly remind us that the dynamics of groups cannot be understood without first understanding their components. It is certainly reasonable to talk about a college class doing things. But misunderstanding will plague anyone who fails to realize that class here simply indicates a group of individuals in a certain relationship with one another, with a professor, with a particular institution, and with society at large. When we say, “The class left the room,” we don’t mean that some blob flowed through the door, but rather that the individuals who count as members of the class left the room.

That’s an easy case which no one is apt to misunderstand. But other statements shroud, perhaps intentionally, basic methodological and moral individualism. When the news media attribute preferences and actions to “the United States” or “the U.S. government,” clarity would be served by keeping in mind that specific individuals with interests, preferences, and the rest — individuals whose legitimate claim to act on our behalf may be dubious — perform the actions. Collective nouns are unproblematic as long as we remember what we are talking about.

Nothing about libertarianism commits its adherents to what critics call “atomistic individualism.” That would be a curious descriptor for people who love the ideas of trade and the division of labor, even among perfect strangers at great distances. That’s why I long ago proposed an alternative: molecular individualism. Libertarians agree with the ancient Greek philosophers who emphasized the fundamental social nature of human beings. Baked into this concept is the idea that persons inescapably are reason- and language-using beings. An atomistic individual would be less than fully human because fundamental potentialities would be left unactualized, owing to the absence of contact with other reason- and language-using beings. Our ability to think beyond the most primitive level depends on language, which is by nature social.

The progressives’ caricature of the libertarian as a rugged, self-sufficient, antisocial off-the-grid inhabitant of a mountain shack — a Ted Kaczynski sans the letter bombs — is ludicrous.

Libertarians, to the extent that they grasp the fundamentals of their philosophy, care about social dynamics, which accounts for their fascination with economics, especially the Austrian school.

I don’t mean to downplay anything I’ve just said when I point out that, in an important sense, the social whole is greater than the sum of its parts. Economies are not machines; they are people exchanging things. We are the economy the statists wish to control. Yet our continuing interaction spontaneously generates — in a bottom-up way — a vast and complex order of interrelated institutions that no individual or group could possibly grasp in any detail, much less design.

The mundane price system is a perfect if unappreciated example. Prices are critical to our well-being because they enable us to plan our day-to-day lives. They do so by providing signals to us not only as consumers but also as producers. Prices guide our decisions about what to produce for exchange, how much to produce, and by what means. The resulting profits and losses reveal successes and failures at serving consumers. Without prices we’d fly blind, as Ludwig von Mises famously showed in his demolition of central economic planning. This is the upshot of the famous socialist-calculation debate.

Mises had other interesting things to say about the market process that go toward debunking the progressives’ critique of libertarianism as hyperindividualist. For example, we meaningfully if metaphorically speak of the freed market’s channeling resources from those who serve consumers poorly to those with the potential to do a better job at it. This is no reification of the economy, which in itself has no purposes — only people have purposes. An analysis of this channeling would refer to consumers’ decisions to buy or abstain from buying goods offered on the market.

But no individual decided to put, say, the bookseller Borders, out of business. In an important sense, we did it collectively, but not at a mass meeting with people giving speeches and voting on whether the principals of Borders should keep control of the company’s assets. Rather, the demise of Borders and the transfer of its assets to others were the outcome of many individual decisions, most of which were not consciously coordinated. It’s just that enough people had preferences inconsistent with the company’s business plan. So the people who ran Borders were out, however much they objected.

Think about it: When the marketplace is really free and competitive (rather than constricted by the state to protect privileged interests), it is we collectively who decide who controls the means of production. We don’t do this in the legal sense, for example, by literally expropriating the assets of some people and transferring them to others. Yet that’s the effect of free competition and individual liberty.

In other words, the freed market would give traditional leftists what they say they want: a society in which free, voluntary, and peaceful cooperation ultimately controls the means of production for the good of all people.

What well-wisher of humanity could ask for anything more?

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