Below are a couple of my comments on Jeff Tucker’s post Scrupulosity and the Condemnation of Every Existing Business (see also Art Carden’s Against A Ruthless Libertarian Criticism of Everything Existing). These 2 are below, plus a related comment of mine on Steve Horwitz’s post Power and the Market: Talking to the left.
Agreed; this is a great post. I’ve long been tired of the left-libs tarring non-lefties with a broad brush of “vulgarism”–Rothbard well knew the evils of business getting in bed with state (State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law, http://blog.mises.org/14623/state-antitrust-anti-monopoly-law-versus-state-ip-pro-monopoly-law/; see also TUcker’s great piece http://blog.mises.org/15416/does-favoring-free-enterprise-mean-favoring-business/ — as do we; and we know that the current system is a mixed economy not a perfect example of capitalism.
There are some businesses so close to the state as to be virtual arms of the state, that could not exist without it, such as the RIAA, private prisons, and others. But Walmart? Taco Bell? My view is that in a free market we would likely have even more international trade, even bigger multinational firms, and probably more artisans and small, more independent types and craftsmen too.
I’ve also long wearied of being lectured that libertarianism is “really” left, that we can learn from the left. I agree that we are not “right”, but nor are we left! We are libertarians! We are neither left nor right; we are better than both. If anything the left needs to learn a little rationality, economics, and consistency and honesty from us. The left is utterly evil (See the work of Rummell; Leftism Revisited: From De Sade and Marx to Hitler and Pol Pot , by Erik Von Kuehnelt-Leddihin; Sowell’s Vision of the Anointed); let’s not forget this. Left libertarians are simply libertarians who have some affinities with or have learned some things from the non-odious parts of leftism; that is fine, but enough with the inversion of reality.
Jeff, think of it this way. It is obvious we have an unjust central state that is very intrusive, so intrusive that all actors and firms in the economy are affected, and in different ways and to different extents.
So, we have three choices:
1. Treat every firm as a de facto part of the state.
2. Treat only some firms as essentially part of the state.
3. Treat no firms as part of the state unless they are nominally so.
I submit it is obvious that 1 and 3 are inappropriate. 3 is inappropriate because it’s too nominalist, and it basically says anything goes.
1 is wrong because if our entire economy is really just an arm of the state, then according to Mises’s calculation argument, there is no way this huge state-managed economy can produce tremendous wealth. Which means that despite appearances to the contrary the US economy is not actually the wealthiest and most productive in the history of the world (despite the statism that does exist). I submit that the only way to hold position 1 is to reject Mises, or to reject reality. Mises was right, and obviously, we are very wealthy. That means we do have a free market in essence. That means that it cannot be the case that all or most of the US economy that is nominally private is “really” part of the state.
Obviously 2 is the right choice. Obviously, the vast bulk of US firms are “essentially” genuinely private, *despite* state interference. Some benefit from some state actions, and suffer from others; it is almost certain that the vast bulk of US firms are harmed more than they are helped by the state. They are harmed on net. And yet they prosper anyway, meaning the are very productive, productive enough to pay explicit taxes and the implicit tax of this net harm. (the opposite view means rejecting Mises’s socialist calculation argument: it means believing that even though most firms are surviving on state aid and subsidy, somehow they are creating massive net wealth; or, as i said, it means putting your head in the sand and pretending this is not really a massively productive economy and this is not a rich, powerful, affluent nation).
Since we know that some firms are essentially part of the state, and we know the vast bulk of the others are NOT and are prospering despite being net victims of the state, this can give us some guidance as to what practical tests to formulate to make this determination in particular cases. But until we get better at this, we ought to retreat to common sense, libertarian decency and presumptions, and presume innocence: that is, if a firm is providing a peaceful service of good to consumers who pay voluntarily, and is not receiving obvious significant and net state subsidies or protectionism, then it’s a good bet it’s in the “hampered good guy” column. Obvious candidates include Taco Bell, Sears, Walmart, and many or most small businesses. Even if you can point to occasional imperfections–Walmart on occasion purchases land the state expropriated from previous owners (but even in this case it pays a market price); and so on. The pro-business, pro-capitalism, pro-industry, pro-commerce, pro-cooperation, pro-civilization mindset that naturally accompanies the libertarian mentality leads most of us to assume that absent state institutions and policies (such as roads, taxes, antitrust law, labor union law, etc.), companies like Walmart would do BETTER on net.
In short, the burden of proof should be on the critic of an ostensibly voluntary firm to show that it is not. In some cases we can do this: Microsoft, for example, likely would have lower profits absent copyright law, and would be less dominant; but would likely still be very prosperous (maybe different, maybe better). Apple, on the other hand, seems to be harmed by IP about as much as it is helped by it; they would probably be closer to their present size and dominance, in an IP free world. Lockheed Martin may be much smaller. Halliburton would probably be very different. Private prisons would be radically different. The banking industry would be radically different. GM and the airlines would not have received subsidies, nor would have AIG. So you cannot just paint with a broad brush. You need to satisfy the burden of proof. But we can expect that in most cases you will be unable to do this, because most companies are not net state beneficiaries; as noted, if they were, we would have an essentially socialist, command economy, meaning the productivity we do have would then be inexplicable since socialist economy is impossible.
The presumption of “innocence” or “privateness” I suggest above finds its analog in Rothbard’s view of property titles, which I discuss in http://www.libertarianstandard.com/2010/11/19/justice-and-property-rights-rothbard-on-scarcity-property-contracts/ — Rothbard says:
It might be charged that our theory of justice in property titles is deficient because in the real world most landed (and even other) property has a past history so tangled that it becomes impossible to identify who or what has committed coercion and therefore who the current just owner may be. But the point of the “homestead principle” is that if we don’t know what crimes have been committed in acquiring the property in the past, or if we don’t know the victims or their heirs, then the current owner becomes the legitimate and just owner on homestead grounds. In short, if Jones owns a piece of land at the present time, and we don’t know what crimes were committed to arrive at the current title, then Jones, as the current owner, becomes as fully legitimate a property owner of this land as he does over his own person. Overthrow of existing property title only becomes legitimate if the victims or their heirs can present an authenticated, demonstrable, and specific claim to the property. Failing such conditions, existing landowners possess a fully moral right to their property.
Likewise, most American firms have to be essentially private, if hampered, not helped, by the state, and that is starting presumption for both common sense, economic sense, and libertarian justice, in my view.
Steve, I appreciate your post, but a few mild objections.
“Libertarians have a long list of things that the American left should take more seriously, but it’s also true that our friends on the left have a similar list of their own.”
Yes, they do, but I think we ought not treat this as symmetrical. We are libertarians after all, and should realize the libertarians are basically right, in their suggestions for what the left needs to learn. And because as libertarians we see leftism as horribly flawed, we ought not think their recommendations to us are as legitimate as ours to them. In short we should not be relativists.
“Probably near the top of the left’s list is what they see as a failure by libertarians to take seriously the pervasiveness of power relationships in human interaction. By power, I mean the ability of one person to direct the activities of another, whether explicitly or subtly. One way of framing this criticism is that we only see power as political and are either blind to or dismissive of it in other arenas, especially the market.”
But we are libertarians. We realize there is “power” in the market and in social relations, but not in a way that is relevant to our concern as libertarians. I reject the left-thick-libertarian view that our main concern is “power” or “authority” or “oppression” in general. No, as libertarians, our concern is only a specific type of “oppression,” namely that done by means of aggression. We can readily admit there are non-aggressive types of “power,” “dominance,” “authority” in private society or the market, since we do not object to it as libertarians (though we might, as humans, based on other values we might hold–values which are not mandated by our being libertarian).
“One of my prized possessions is an autographed copy of Murray Rothbard’s book Power and Market. He inscribed it with a little note that captures this view concisely: “For the market and against Power.” That inscription, as well as the very title of his book, suggests that there is a dichotomy between markets and power, with the latter being absent from the former and present only in politics.”
Yes, because he is writing as a libertarian who opposes aggression–the violence, the initiation of force, whether private or institutionalized, against the body of private property of individuals.
“This view seems to me to fly in the face of the reality of the market, where power is also omnipresent.”
I think you just engaged in (unintentional, no doubt) equivocation. You are using power in 2 ways: first, as a synonym for aggression (in the Rothbard comments); then, as a more general concept that includes both aggressive and non-aggressive forms of power. The libertarian does not object, qua libertarian, to power-in-general, any more than we object to the use of force or violence per se–we object to aggressive or initiated force or violence, for example, but not to defensive force. In fact in the absence of the state and its aggressively imposed institutions and power relations and dominations, we can expect private authority structures and institutions to emerge in a private and market society to fill the vacuum of what the state was providing (in an illegitimate and violent way) before. So in a sense if we are thick at all we ought to see the value of private authority/power relations and institutions, since these are preferable to aggressive ones; and unless one is some kind of naive egalitarian, we have to realize there will always be “power” or “authority” relations in society–the question is: do we have private, natural, market-based ones, or state-imposed ones.
” It also ignores a variety of other realms of human interaction where power is present, for example, within the family and romantic relationships.”
It doesn’t ignore it exactly, it’s just that this is non-aggressive power so it’s not what the libertarian qua libertarian objects to.
“In the market the relationship between employer and employee certainly involves the exercise of power.”
But we libertarians are not opposed to power as such (implicitly defined in this general way).
“Libertarians look at situations where employees are unhappy yet don’t leave jobs (or where spouses are abused yet don’t leave their relationships) and often too quickly say, “Well, that’s their voluntary choice,” ignoring that the dynamics of the workplace or the family may involve exercises of power that lie outside the realms of politics or physical violence.”
Why is it “too quick” to say this? From the libertarian standpoint, it is voluntary, and so there is not “problem” in that justifies a forceful response–that is, there are no rights being violated. That is not to say we as humans cannot have opinions and evaluations about such situations, but there is an intellectual division of labor, after all, and libertarians specialize in identifying the key *political* problems, which is aggression, the use of force against innocent people without their consent; the violation of individual rights. It is easy to see that the employment relation in a free market does not involve aggression so it is certainly correct to observe that because it is voluntary on the part of the employee, there is no rights violation and no political problem. Once the libertarian establishes this, his job as libertarian is done. What is wrong with this?
“Rather than ignore non-State forms of power, libertarians should readily acknowledge those realities but then use the items on our list of what the left overlooks to ask what the implications are.”
Okay, I like this point. However, in acknowleding “power” we have to be careful not to fall into the left and left-libertarians’ trap of equivocation. Once they get us to admit we are against Power (of the state, and criminals, in Rothbard’s sense), and to recognize there are other forms of “power” in the market, then they will say “aha well why do you oppose legal rectification of the power you have just acknowledged!” See, they have won the game by subtly getting us to frame our libertarian principles in terms of objection-to-power. The left-libertarians and thickers sometimes want to do this too. But of course we are not, qua libertarians, opposed to power-in-general. We are opposed to aggression. This is the danger of careless use of terms; it can lead to confusion, disingenuity, and equivocation.
” First, the existence of “private” power does not necessarily make “public” power the appropriate solution.”
I don’t know why you hedge your libertarian principles here with the “not necessarily.” I would say ““private” power does NOT make “public” power the appropriate solution.” I mean I understand that if we are clear about our libertarian principles, this will “alienate” many lefties–but this is because they are not libertarian! They ARE willing to use state power against private actors who are not violating rights; that is, they are quite willing to condone institutionalized aggression. One reason for this, aside from their economic illiteracy, hypocrisy, inconsistency, emotivism, and insincerity [see the work of R.J. Rummel; Leftism Revisited: From De Sade and Marx to Hitler and Pol Pot, by Erik Von Kuehnelt-Leddihin; Sowell’s Vision of the Anointed], I think, is precisely because they use power too generally and fail to distinguish between private “power” and aggression-power. If we give in to their own sloppy conceptualizing and political “theorizing” then we are just enabling them to continue making the same mistake of being willing to use institutionalized state force not only against real aggression, but also against non-aggression.
“No society can ever be free of power. The question for the left should be the comparative one: Under what set of institutions will private power do the least damage? Asking that question recognizes the reality of private power and provides libertarians a way to respond to the left without dismissing their legitimate concerns.”
Again, I think you have a valid point, but I am leery of the implication of your first sentence, which seems to say that power is bad. YOu seem to be saying: “look, I agree that ALL power is bad, but we cannot get rid of it unfortunately; but we ought to realize aggressive-power is worse and the only way to stop private-power is to use aggressive power, so unfortunately we have to refrain from using aggressive-state-power to stop (bad) private-power, and have to use peaceful, private means to oppose private-power.”
The problem is that it assumes all private power (or authority, whatever) is bad. But the libertarian qua libertarian does not assume that ANY private power is bad at all; that is outside his province. So if you talk about the merits of private power, you are speaking as something other than a libertarian. Which is fine; we are not just libertarians. But if we are talking about private power, I think a more sensible view is that SOME private power is “good” (natural elites and leaders, visionaries, family structures, some aspects of employment, and so on) and some is “bad” (say, racial discrimination in employment decisions). So I think if you want to talk to the left you have to not only make the point you suggest, but also make it clear that not ALL private authority/power relations/structures/institutions are even bad at all; some are good or even necessary.
So in that case I would modify your last comment to be something like this:
“No society can ever be free of power; nor should it. All aggressive (state) power is bad; private power is never a rights violation, though some of it is immoral or bad, while some is neutral, and some is desirable or commendable. The force of law, whether state or private, should be limited only to actual aggression (private-criminal-power), and never to non-aggressive private power, even if it is “bad.” The question for the left should be first, to identify what types of power are aggressive, and which are not; and of the latter, which are bad, and which are not. They should realize that institutionalized state power aimed at non-aggressive private power (even if it is “bad”) is worse than the bad-private-power they are aiming at. They should realize that the legal power should be restricted to only prohibit actual aggression, and them work for private responses to the subset of private power relations that are “bad”. In this way we recognize there are legitimate concerns about one subset of private power, but we recognize also that this cannot be fought with the even more-bad use of state legal power, but only with peaceful, private means.”