If you’re a leftist who frequents online spaces at all, you’ve almost certainly been mocked for not “understanding economics” or told to “go study economics” by some right-wing dudebro (probably with a black and gold header and #Bitcoin in his profile, if he’s on social media). When a podcast by Larken Rose (“Appreciating Capitalism”) for some perverse reason popped up in my YouTube recommendations, I decided — since Rose appears to be someone whose knowledge of “economics” is held in high esteem by said dudebros — to increase my knowledge of the subject.
It’s hard to convey the actual experience of listening to a Larken Rose podcast, or the sheer level of stupidity, because so much of its unique quality lies in the delivery. His main shtick is pure Rush Limbaugh. First, dripping with contempt, he paraphrases the statements of an imaginary leftist interlocutor (one who, of course, “doesn’t understand economics”), in a whiny baby voice. He then responds to them with what passes for “economics” in his mind: i.e., the sort of mediocre and predictable talking points usually found in a Thomas Sowell column.
He starts out with the classic right-wing cliche “that’s not capitalism, it’s corporatism!” (or “crony capitalism”):
If you don’t appreciate capitalism, you have no idea what capitalism is. . . .
Most of the people who bash capitalism and complain about capitalism point to the basically corporatism of giant companies usually using the violence of the state to get preferential treatment and enrich themselves and steal resources from other countries and stuff like that. And that, especially in the mainstream media…, is what gets labeled capitalism. If you’re against that, cool, me too — because of the coercion involved with government violence that gives them their benefits.
He then proceeds, without a pause, to claim that we have “capitalism” to thank for virtually all of the technologically advanced goods we own.
You’re listening to me because capitalism exists. That screen in front of you exists only because capitalism exists. The wires in between exist only because capitalism exists. The electricity running along those wires, everything involved, everything in this room, this building.
This, despite the fact that being connected with the state is central to the profit model of the corporations that produced all those things. Miniaturized electronics, cybernetics, and networked communications infrastructure were developed almost entirely through state-funded R&D, especially military R&D, and are heavily reliant on patent protection — in other words, what Rose calls “crony capitalism” if the term means anything at all. But they’re also examples of the benefits of capitalism. Schroedinger’s Capitalism, I guess. Apparently the man is incapable of making two consecutive statements that don’t directly contradict each other.
What Rose said about the origin of electronic technology — that it exists because of a “capitalism” that didn’t involve the state — simply could not have come from someone who knows anything at all about the actual history of the industry. I’m sorry, but it’s not even a debatable point. The state’s actual role in the development of the tech industry was ably described by David Noble, in America by Design. The development of cybernetics, miniaturized electronics, and what became the backbone of the Internet, all got their start from Defense Department R&D.
But in fairness to Rose, this logic fail is one he shares with virtually all right-libertarian polemicists. These people will deny that businesses whose profits result from state subsidies, protections, or artificial property rights exemplify “real capitalism” — and then turn around and celebrate as an “accomplishment of capitalism” a product like the iPhone, created by a corporation whose entire profit model depends on intellectual property, government subsidies, and neoliberal foreign policy.
Rose goes on to restate an entire mishmash of right-libertarian talking points about the indispensable role of the capitalist. The reason why intricate technology, or a level of existence above that of the cave man, is able to exist, he says, is
as much as people want to point to some [begin contemptuous baby voice] evil multi-billion dollar corporation and put them in a movie as the bad guy who’s polluting the environment and being evil and greedy [end contemptuous baby voice], the actual concept is somebody can own stuff that you don’t own so it’s not equal they can own stuff that you don’t have and they can use that stuff to make other stuff for example a computer or a computer monitor or the camera I’m talking into. How the hell do you think anybody is ever going to make that or one little chip in any of these things without a big freaking factory that makes computer chips?
* * *
Think of the things you wouldn’t have unless somebody with way more money and capital than you decided to create something….
The moment you have the equipment to make a vacuum tube you’re an evil oppressor cuz [begin contemptuous baby voice] you’re owning the means of production why don’t you stop oppressing the people and give it back to the people [end contemptuous baby voice]. The number of people who are just spoiled out of their gourd compared to most of human history and have no understanding of what it is that enabled that is just amazing basically everybody who votes Democrat and 99% of the people who vote Republican they don’t get how these things came into into being. They came into being because people with a crap ton of money said if we invest a crap ton of money into inventing and building factories and paying people to design research and development and all that we can probably make a thing that we can then sell a whole bunch of to all those people with not tons of money but some money….
And the thing that people forget while they’re [begin contemptuous baby voice] hating the rich [end contemptuous baby voice], you are rich because other people are richer. You are rich because other people are way richer than you…. If there weren’t people way richer than you you wouldn’t have a laptop you wouldn’t be looking at the screen you’re looking at you wouldn’t have the electricity that is making this possible because other people with more money and more capital invested it to try to make things they could sell to people with less money and less capital and that made you richer because now you have those things….
Of course, all of the things Rose celebrates came into being because of investments from people with a “crap ton of money” in the same sense that everything people consumed in the USSR came into being because of state-owned industry and Gosplan.
That “big freaking factory,” and every single machine or material input in it, is 100% the product of human labor operating on the free gifts of nature — as was every machine or good produced under the slave economy, feudalism, or Soviet “communism.” None of them was built by the capitalist, any more than the machinery used by Soviet workers was built by a central planner. None was constructed using bundles of cash brought in by the capitalist, like Lego blocks. Every tool or machine a worker uses was built by other workers. The capitalist’s “investment” is nothing but a set of socially constructed claims on the right to allocate the raw materials and producer goods created by human labor acting on nature. Every class society in history has had a stratum of people who interposed themselves into this intermediary position between different groups of producers, and then called themselves “indispensable.”
He also makes quite a few non sequiturs along the way:
“Well, we’ll have collective ownership.” No we won’t; first of all that always works horribly unless there’s somebody in charge who says “Yeah I have the actual understanding of how to make this.” Second of all if you have ten or a hundred people that own a a company and then do it that’s still capitalism it’s just one hundred instead of one but those one hundred people still have an exclusive right to decide what is done with the thing that makes something.
Rose might be surprised to learn that the people “in charge” in the corporate C-suites don’t “have the actual understanding of how to make this.” They’re in a position to boss around the people who have the actual understanding of how to make this because they have the ear of someone who has money. He would probably also be surprised that virtually every society in history that practiced commons-based or collective ownership, going back to stateless peasants and hunter-gatherers, has had a set of rules governing who had priority of access to scarce resources. The USSR had people with the “exclusive right to decide what is done with the thing that makes something.” I’m pretty sure these things, as such, are not “still capitalism.”
He also drags out this chestnut:
If you buy something it’s because you value the thing more than you valued the money you gave up and if somebody else sells you something they valued your money more than the widget that they sold to you you both got richer through the transaction this is something that in our crappy education system few Americans seem to understand. [Begin contemptuous baby voice] “Oh the rich got rich by stealing from the poor.” [End contemptuous baby voice] No they didn’t — that’s a stupid claim. “You got that Ferrari by stealing it from people who didn’t have Ferraris.” But how the hell did they do that? No, they got the Ferrari by paying people to work at a factory that builds Ferraris, and all those people got a paycheck and made a living and can now go out and buy stuff. This idea that wealth comes from taking it from somebody else is just economically stupid and government constantly pushes this stupidity because they want you to be envious of the people who made it so you could be rich.
In this, he’s typical of the sort of ancap or “voluntaryist” who is incapable of perceiving structural or background violence, and sees any transaction where a gun is not immediately present as “voluntary.” Yes, any economic transaction where a gun is not present is “voluntary” in the sense that both parties prefer the outcome of the transaction, given the available alternatives. The proper question to ask is, who determines those available alternatives. If you buy stamps from the United States Post Office, it’s because you value those stamps more than the money they cost. And the Post Office values your money more than the stamps. Anyone who buys from a monopolist, or from a seller in a position of privilege, prefers the thing purchased to the money they spent. Obviously, absent direct coercion, a monopolist or privileged seller has to set the price low enough that the utility obtained by the purchase is at least slightly greater than the cost — that’s how monopoly pricing works. Even when the buyer does so willingly, the party who is in a position to unilaterally set the range of alternatives and the available supply will be extracting a rent — i.e. taking it from somebody else.
The video could easily have been cut by two-thirds, because he goes through multiple minor variations on the same extended rant — pointing to some high tech thing, challenging people to make that thing for themselves starting from dirt without some rich guy to provide tools and knowhow, and sputtering with rage about the economic illiteracy of people who don’t appreciate the good things rich people have given them, etc.
And of course, his outrage over people’s envy toward their betters, and ingratitude for all the good things they’ve made possible, wouldn’t be complete without the authoritarian “Good times make weak men, weak men make hard times, etc.” trope.
And here we are, weak men make crappy times because a bunch of entitled twits who don’t know where wealth comes from they don’t know what value is they don’t know anything about economics but they’re here bitching about the capitalism that allows them to sit on their ass all day playing video games and they don’t even grasp the fact that you’re literally bitching you’re literally biting the hand that feeds you you’re bitching about the people people who allowed you a ridiculously easy type of existence and pretending that you’re noble and brave because you’re sitting there on your butt bitching about people who actually made this level of prosperity possible.
(I quoted this entire rant unedited without any sanewashing, complete with three or four restatements of the “bitching about people who made your prosperity possible” talking point, just to give you some idea of how much filler is in the podcast.)
This sort of boot polish poisoning is common on the libertarian right, likely attributable to having read Atlas Shrugged as an adolescent. A classic example of the genre can be found in Mises’s letter to Ayn Rand: “You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.” Likewise George Reisman: “innovation is the product of exceptional, dedicated individuals who must overcome the uncomprehending dullness of most of their fellows, and often their hostility as well.”
The truth is that innovation and progress are the creation of collective intellect and cooperative labor. The wealth of the plutocracy comes from enclosing land, enclosing the credit mechanism, enclosing ideas, etc., and then — having interposed themselves between the groups of producers who have actually brought everything into being, and using their position to collect tribute — presenting themselves as benefactors and geniuses. And sycophants like Larken Rose are their accomplices.
