In an interview with National Public Radio’s Tom Ashbrook on Wednesday, former Secretary of Labor Robert Reich attributed the blame for most of the country’s problems to inequality, warning of a development in the direction of plutocracy, or rule by the rich. Reich’s recommended curative was, predictably, a thickening of the bureaucratic regulatory state and an intensification of the deluge of the state’s worthless paper money into the economy.
Alluding to those constantly misunderstood numbers on the concentration of wealth in the top one percent, Reich exhorted for a return to the halcyon days of, for example, the Eisenhower administration when, we are led to believe, corporate power was choked back by the kindly charity of our watchful guardians in government. Income distribution statistics are misread due to the faulty idea that government is the natural companion of equality; accordingly, the data are put forward as grounds for the advancement of statism.
Reich’s apocryphal version of history belies the overt fact that corporate elites of his imagined golden era dependably interlaced themselves with the state’s many arms in order to hose consumers and wring profits from advantageous and protectionist laws. While Reich’s diagnostic judgments about the harms of inequality are on target, his sense of the causal relationships within his hated plutocracy is thoroughly skewed. If we were to take Reich’s nostrums for a more egalitarian society, what we would end up with is more of the same.
The growth and aggrandizement of the state compounds the problem of concentrated wealth rather than mitigating it, facilitating the payola politics of the state-corporatist American system. Reich’s “vision of bigger government,” notes Timothy P. Carney in Obamanomics, “is also the dream of corporate lobbyists,” his “anti-corporate rhetoric . . . precisely the opposite of reality.” Tea Partiers worries about the redistribution of wealth, then, are completely valid, but as Ashbrook piercingly inquired of another guest, “Don’t we already have income redistribution in an upward direction?”
His question nods to the critical piece of the puzzle that both the Reichs and Ashbrooks and the vulgar exponents of “free enterprise” are missing, that the plutocracy is the totality of the oppressor class, the not-so-secret understanding between Big Business and Big Government (that is, if we can even differentiate the two from one another).
Inequality, in all of its countless forms, is a scourge on society, but it is the state that is its source and its keeper. Libertarians, so often condemned as the authors of capitalist apologetics, need to demonstrate that true egalitarianism belongs to us, that socialistic ends are legitimate insofar as they do not come through the discrete means of the state.
Free markets — an economic configuration to be distinguished from American capitalism — are the pathway to equality because they preclude the economic system of authority; inside such a system, argues Kevin Carson, “the wielder of power is able to externalize the costs of his decisions on others, while appropriating the benefits for himself.” Applied to centralized wealth and power, competition is a caustic substance, an abrader that wears down the violent adhesives holding America’s undeserved elitism together.
As Roderick Long explains in Equality: The Unknown Ideal, if we undertake to bring about an equality that does away with special privileges, “wherein,” in the words of John Locke, “all the power and jurisdiction is reciprocal,” then the other kinds of equality will follow as a matter of course. The more extreme inequalities of the present could not endure the transformative power of free exchange between individuals. Libertarian anarchists don’t have to choose between arguments that emphasize either economic utility or normative ethics because we have the high ground with respect to both standards, and we needn’t concede an inch on either.
The poor and the powerless, those most conspicuously maltreated by the current economic approach, could expect to benefit most dramatically from the deposition or displacement of the state-corporate elite. Robert Reich, however, only fortifies the outcomes he decries — and the power of the people who produce them — when, in his new book Aftershock, he cautions against “the cost of [government] inaction.” Assuming he really believes as he writes, that “[b]oth [big business and Wall Street] have been able to enhance their profits by exacting money and other favors from government,” it defies reason to campaign on behalf of more coercive, political solutions.
The net result of the state’s involvement in economic life is and always has been to diminish the bargaining power of the proles while cultivating the appearance of benevolence. Equality is a worthy goal, and we should scrutinize corporate power at every opportunity, but it is crucial to dislodge that goal from the case in favor of statism.