I find Steve Horwitz’s claim that “Markets, including Wal-Mart, have done more for poor Americans than any government program, at least in the long run if not the short run” to be a bit puzzling. If this means that the absence of governance à la Joseph Stalin is a more important determinant of our well-being than is, say, the existence of unemployment insurance then, yes, of course this is true. But the question facing government programs is not whether they are more or less beneficial than the existence of a market economy, the question is whether the programs are more beneficial than would be the absence of programs.
And of course the answer, to me, comes up differently according to the program. And this is where things get tricky. Horwitz cites minimum wage laws and occupational licensure requirements as examples of non-beneficial programs. I’m not sold either way on the minimum wage, but definitely agree about the licensing. At the same time, things like rules that prevent dental hygienists from practicing without being supervised by a dentist aren’t being perpetrated by “the left,” they’re being perpetrated by dentists. It’s a classic example of concentrated benefits and diffuse costs. And the question, to my mind, is what is to be done about it. If it were the case that electing politicians who are given to waxing effusive about the virtues of free markets (i.e., Republicans) was likely to mitigate such abuses, I would look more kindly on such politicians. But in practice, it doesn’t seem to make much of a difference.
And then there’s a different set of regulatory issues, notably those dealing with the environment, where the benefits of regulation are diffuse and the costs are concentrated on the polluting firms. Here I side against the free marketers, but this is where market rhetoric seems to have a lot of efficacy. Which isn’t to point to a flaw in market rhetoric per se, but merely to the reality that any set of rhetorical strategies is more likely to succeed when it has a lot of money and political influence behind it. But if you want to convince people on the left that an alliance is worthwhile, you need to make the case not merely that market principles could in theory help the poor by dismantling some barriers to economic opportunity, but find some concrete projects on which to collaborate. Otherwise, market and anti-regulatory rhetoric will continue to be associated with what it accomplishes in practice—serve the ends of politically powerful entities when it’s convenient to them.
Read: The Case for Case-by-Case Evaluation
In response to Roderick’s Round II comment on intellectual property, I don’t see that he has a viable alternative mechanism for financing work that I think we agree must get done. The idea of voluntary payments is intriguing, but can we do that in a way that insures that sufficient funds are devoted to the task?
I have a proposal for an “artistic freedom voucher” which would be a refundable tax credit (e.g. $100) that could only be used to support creative or artistic work. Potential recipients register in the same way that charitable or religious organizations register for non-profit status. The condition of getting the money is that you are not eligible to receive copyright protection for any work produced for a substantial period of time (e.g. 3–5 years) after receiving money through this system.
Obviously this is not entirely voluntary. You are taxing people to pay for the voucher (with some element of redistribution), but where the money goes is entirely up to the individual. My expectation is that a vast amount of uncopyrighted material circulating freely over the web would quickly crowd out the copyrighted material, but what actually happens would of course depend on market outcomes.
I don’t know if this story offends libertarian sensibilities, but at least in my book it involves much less intervention than the copyright system.
Returning to drugs, I do think it’s important to have an efficient funding mechanism; I do want to see more research into lifesaving drugs. I am not convinced that Roderick’s mechanisms are workable or efficient.
To my mind its essential that research be fully open. Innovation will proceed much more rapidly if researchers can quickly benefit from the results of their colleagues. It is not open now, and I don’t see how it would be open with the mechanisms he has described.
This raises a second point. I don’t think that we can accurately award credit for the inventers/innovators of a particular drug or scientific breakthrough and I hate to see us waste a lot of effort trying. Science is an inherently social process, with every researcher building on the work of their predecessors. We can always pick someone out as the person who published the key paper or got the important patent, but very often the person getting credit may just be taking a small step building on the work of others who have done the heavy lifting.
This is why I prefer a system where researchers are paid upfront, with opportunities for advancement and even large prizes based on their performance. But, I hate to see a situation where their compensation is entirely dependent on being able to claim credit either for a patent or through some other process (like the ones described by Roderick). This will lead to a situation in which people who are good at claiming credit get well-compensated, and considerable resources are devoted to the effort.
On final point on my proposed funding mechanism: I really do want to see drugs sold at their marginal cost. We should not have situations in which people struggle with paying the bill for drugs that are made expensive through patent protection or any other mechanism. The drugs are cheap to produce and they should be sold cheaply.
It doesn’t make sense to make the patient bear the cost of drug research just because they happen to be the one needing a drug. It makes much more sense to treat this as a form of insurance. You pay for the research in advance—in the event you need the drug, you get it at its cost of production. We could do this an entirely voluntary insurance system, except I don’t know how to prevent free-riding in this story, hence my use of the tax system.
Anyhow, I hope that we can spark more interest into alternative mechanisms of financing innovation and creative work. The current system is an outrage from both an economic and moral perspective and it’s hard to believe that we can’t do better.
Read: Artistic Freedom Vouchers
First, I happily accept Roderick’s certification as a “non-vulgar libertarian.” I’m hoping he’ll get me the keys to the secret restroom, which I’m sure is cleaner than those in regular libertarian organizations (and certainly cleaner than those in the statist status quo) because these are cleaned by the owner-worker-managers themselves, rather than through hierarchical job assignments.
More seriously, he raises the question of whether my “playing defense” perspective runs the risk of minimizing the problems that really exist in a statist society. Specifically, he wonders whether pointing to the real gains of the poor leaves me and others open to other ways in which the poor have become worse off in recent years, thanks to various state policies. He also suggests that as far as left-libertarian dialogue goes, it might be more constructive to find places of agreement on the ways in which inequalities pervade the current system.
Again, I think Roderick and I have a disagreement of degrees, not principle. I also think it’s centrally important that libertarians point to the variety of injustices and inequalities that pervade the current system. For example, in my own work on gender and the family, I have pointed to the ways in which the current income tax system in the United States, through its combination of progressivity and not allowing married couples to treat each one’s income separately, is extremely biased against the labor force participation of secondary earners. Their first dollar gets taxed at the highest rate paid by the primary earner. Given that women are more likely to be the secondary earners (for cultural reasons that a thicker libertarianism could join with the left in trying to change), this ends up punishing married women who wish to work. That punishment is even greater when one considers the other costs associated with working (e.g., finding affordable day care in a highly regulated market). Simple changes to the tax system, or even going to a low and flat tax, would rectify this situation and help to put the genders on more equal ground in the labor market. Here’s a case where libertarians could join with the feminist left in working to change the tax system in a way that reduces a state-created gender inequity.
Even as we agree with the left about the existence of real inequalities in the status quo, sometimes one of the most effective things libertarians can do is to identify how market processes might better serve the left’s stated ends than their own preferred policies do. For me, this is one of the advantages of the data showing the better consumption possibilities for the poor. Most of that growth, I would argue, has come from the underlying market processes that have reduced the prices of new innovations and made luxuries into basics, all while the same processes have generally raised the value of human labor so that all of these goods can be afforded. Markets, including Wal-Mart, have done more for poor Americans than any government program, at least in the long run if not the short run. As I’ve said elsewhere, given Wal-Mart’s success in improving the living standards of poorer Americans, through both jobs and cheaper goods, if it were a government program, it would be the greatest anti-poverty program ever (and it would be cheered by the left for the same reasons it should be today, even as one recognizes its imperfections).
By the same token, libertarians can also point to government interventions such as minimum wage laws and occupational licensure laws that limit the labor market opportunities of the poor, particularly those of color, and engage the left in conversation about whether such policies really do serve their ends better than the results of free(d) markets.
Finally, let me note, and I know Roderick agrees with me here, that libertarians have paid far too little attention to the ways in which state intervention is a source of racial and gender inequities. That’s not to say we have paid no attention to them, but it is to say that if we are going to engage the conversations over policy that are taking place on the left (and among many academics), we are going to have to pay more attention to them.
More importantly, if libertarian ideas are ever going to be significantly attractive to more women and people of color, and perhaps more young people regardless of race and gender, we are going to have to do a lot better in showing how our ideas can speak to their concerns and their rightful claims of historical injustice. Aside from the fact that white men are becoming even more of a minority themselves so appealing to women and people of color is no long optional, much earlier in its history, libertarianism stood in solidarity with the concerns of these groups, who they rightly saw as victims of state oppression and for whom freed markets and freedom in general would go a long way in helping.
Nothing makes me prouder to be a free-market economist than knowing that the epithet “the dismal science” was coined by people like Ruskin and Carlyle who complained that a world of laissez-faire as defended by economists such as J. S. Mill and others would undermine the racial hierarchies of Victorian England. The “dismalness” of economics was that it saw a future of racial equality and leveled hierarchies thanks to the results of the free market. I wish more of my libertarian colleagues would recognize our past identity being at the forefront of concerns about issues of race and gender and engage with our friends on the left about the best means to achieve so many ends that we share. Much as we should reject corporatism in favor of truly freed markets, libertarians should push ourselves away from the right’s reflexive rejection of the discussion of race and gender as “political correctness” and realize that for most of our history our opposition to corporate-state power and our sympathy for the victims of state-caused inequalities of race and gender made us the “politically correct” ones.
Read: Markets Achieve What the Left Wants Too
Timothy Lee writes: “I can’t agree with Baker that all copyright and patent monopolies are illegitimate.” I’m actually not sure that’s Baker’s view (in his original response Baker remarks in passing, “there may be areas in which patents are an effective policy for promoting innovation”), but it is my view, so let me say briefly why I don’t regard intellectual property as a legitimate form of property.
The objects of ownership in the case of intellectual property are supposed to be abstract objects; but what does ownership over an abstract object amount to? Ownership is supposed to solve conflicts over use, but there cannot literally be conflicts over the use of abstract objects; I don’t have to wait until you’re done thinking the Pythagorean theorem before I can start thinking it. Putative conflicts over the use of abstract objects are always really conflicts over the concrete items in which those abstract objects are embodied.
An abstract object, such as a design for a new kind of mousetrap, gets its foothold in concrete reality only by being embodied in, say, a mind that is thinking of it, or a sheet of paper that describes it, or an actual mousetrap built in accordance with it. But if those concrete objects are already owned - the mind by the person whose mind it is, the paper and the mousetrap by whoever made or bought them - then the question of who has rights over those things is already settled, and there can be no further question of who owns the design itself. If the originator of the design were to claim exclusive rights over it, he or she would thereby be claiming, in practice, the right to control someone else’s property - someone else’s individual mind or individual sheet of paper or individual mousetrap. Intellectual property is thus essentially a claim of ownership over other people and the products of other people’s labor, and so is necessarily illegitimate; in forbidding the free circulation of ideas it constitutes a form of censorship as well.
In defense of intellectual property, Lee notes that “Copyright and patent protections have existed since the beginning of the republic, and if properly calibrated they can (as the founders put it) promote the progress of science and the useful arts.” That they have existed since the beginning of the republic is true, but not a compelling argument for their legitimacy. (Slavery existed for the first century of the republic also.) As for their being needed to promote “science and the useful arts,” even if this were true it wouldn’t justify the violation of liberty involved - but it is doubtful that it is true, given that most scientific and artistic progress throughout history was accomplished without intellectual property protections, and in many cases was in fact possible only because there were no such protections (as inventions built on previous inventions, and artworks on previous artworks). The protectionist argument that intellectual innovators won’t have sufficient incentive to create unless they’re protected from competition doesn’t seem to hold up historically.
I can’t work up much enthusiasm for Baker’s alternative proposal, however. Baker writes:
My ideal system would be a system in which the government allocates a pot of money (@$30 billion a year - approximately equal to private R&D in the pharmaceutical sector) that would be awarded in long-term contracts to a relatively small number of master contractors. For example, there can be 10 master contractors getting grants of roughly $30 billion each spread over 10 years. The model here should be government contracts for major projects, like building an airport.
In light of the massive rent-seeking, favoritism, and costly boondoggles that plague government contracts, Baker’s proposal seems worrisomely similar to the kind of destructive corporate welfare and monopoly privilege that I discussed in my first essay.
Contrary to what both Lee and Baker imply, there are ways of promoting the “progress of science and the useful arts” without invoking state aggression against liberty or property — ways that would secure many of the benefits of copyright and patent protection without violating libertarian scruples. These ways include contractual stipulations, charitable patronage, and organized boycotts.
Let me say a bit about the latter case, the organized boycott. During the late medieval period a system of commercial law arose in Europe called the Law Merchant, its creation prompted in part by the lack of uniform legal standards owing to the unwillingness of governmental courts in one country to enforce contracts made under the laws of another country. Bypassing the inefficient (because monopolistic) government courts, merchants from different countries joined together in developing their own rules and courts; being denied the enforcement powers of the state, mercantile courts could rely only on boycotts to secure compliance with their decisions. A similar situation arose in 17th-century Amsterdam: when government courts refused to enforce certain forms of financial contract, merchants continued to make such contracts anyway, relying on the power of boycott for enforcement. In both cases, the threat of boycott was sufficient to ensure that parties abided by their contracts. [1]
There is little reason to suppose that payment for the labor of intellectual innovators could not be guaranteed in the same way, via an organized system of voluntary boycotts rather than by governmental force. Being voluntary, such a system would avoid the rights-based objections to copyrights and patents; moreover, the kinds of protections that would be sustainable under a voluntary regime would be unlikely to include the extreme, disproportionate excesses of current IP law.
Note
[1] On the Law Merchant see Tom W. Bell, “Polycentric Law,” Humane Studies Review 7, no. 1 (Winter 1991/92; http://osf1.gmu.edu/~ihs/w91issues.html; on the Amsterdam case see Edward Stringham, “The Extralegal Development of Securities Trading in Seventeenth-Century Amsterdam,” Quarterly Review of Economics and Finance 43 (2003), pp. 321–344; http://www.sjsu.edu/stringham/docs/Stringham.2003.QREF.Amsterdam.pdf.
Read: Owning Ideas Means Owning People
I am glad to see that Roderick is largely in agreement with my comments on patents and copyrights. As I am afraid that Tim Lee’s comment has misrepresented my views on alternatives to drug patents, I’ll take this opportunity to clarify what I view as the best system.
I do not support a prize system, for many of the reasons mentioned by the author. A prize system would preserve what I see as some of the worst problems of the patent system, most importantly encouraging secrecy in research.
My ideal system would be a system in which the government allocates a pot of money (@$30 billion a year—approximately equal to private R&D in the pharmaceutical sector) that would be awarded in long-term contracts to a relatively small number of master contractors. For example, there can be 10 master contractors getting grants of roughly $30 billion each spread over 10 years.
The model here should be government contracts for major projects, like building an airport. There are certainly problems with such contracts, but these problems seem relatively minor compared with the costs associated with charging hundreds of dollars for drugs that would sell for just a few dollars in a competitive market.
There are two conditions on the funding. First, all results are posted fully and promptly. This will allow researchers throughout the world to quickly gain the benefit of research funded through this system. They will be able to independently analyze the data and compare findings across studies. This should substantially hasten the research process.
Second, all patents are placed in the public domain subject to copyleft rules. This means that any drugs based on this research can be produced and sold as generics. Researchers outside the system can take advantage of research in the publicly funded system, but they must either place any derived patents in the public domain or negotiate an agreement with the contractor who holds the patent. This should result in the vast majority of new drug patents being placed in the public domain.
Of course this is not a perfect system and there may well be better alternatives, but the point is to get the discussion started. It is remarkable how little attention mainstream economists pay to such an enormously important issue. Perhaps a progressive-libertarian alliance can force economists/policy makers to take this issue seriously.
Read: On State Funding and Innovation
As I’ve noted elsewhere: “Part of being a left-libertarian is that on the one hand you’re constantly trying to prod fellow libertarians into moving farther left, while on the other hand you’re constantly trying to show fellow leftists that libertarianism is already farther left than they realise.”
I might add that when you do both in the same piece, libertarians tend to hear mostly the criticism of libertarians, while leftists tend to hear mostly the criticism of leftists.
Thus for Dean Baker, from the left, my chief message was apparently that “progressives have unfairly maligned libertarians as defenders of corporate power;” and for Matthew Yglesias, likewise from the left, my chief aim was apparently “to cast doubt on the legitimacy of castigating libertarians as corporate stooges.” But from the libertarian side, Steven Horwitz worries that I may be too quick to charge libertarians with being corporate stooges. (And elsewhere on the web my article has been read as outright anti-libertarian.) I claim, of course, as always, the position of golden mean.
Reply to Matthew Yglesias
All three of my interlocutors agree with me that the state, as it stands, uses its power to benefit large corporations. The chief question at issue between Matthew Yglesias and myself is how best to remedy this situation. There would seem to be three possible options:
1. Either abolish or radically diminish the power of the state.
2. Keep the state as it is but demand that it remain neutral and noninterventionist.
3. Use the state actively as a tool against corporate power.
Yglesias seems to think that the libertarian solution is (2), which he rejects as unrealistic. The “concept of a state apparatus that simply sits on the sideline watching the free market roll along” is “impossibly utopian,” Yglesias argues, because people will inevitably “try to manipulate the state to advance their own ends.” Hence Yglesias favors (3) instead.
But of course the libertarian—or at least the radical libertarian—agrees with Yglesias that a passive bystander state is utopian, and so favors (1) rather than (2). But for the libertarian, (3) is impossibly utopian as well; the incentival and informational perversities that beset the state are inherent in its monopolistic nature, so that the hope of achieving benign outcomes via the state is a chimera. (1) may be difficult to achieve given the prevailing political climate, but unlike (2) and (3) it poses—or so we libertarians claim—no inherent, ineradicable tendency to instability, and so is the least utopian option of the three.
Now it is true, as Yglesias rightly points out, that some states are more favorable to corporate power than others, and it is on this fact that Yglesias founds his hopes for reform. But given the state’s inherent liability to be influenced by concentrated over dispersed interests, this is a bit like pointing out that some heroin addicts are less unhealthy than others—the observation is true enough, but it’s no argument for seeking the right kind of heroin.
Yglesias notes that, as he sees it, “what corporations are after in politics is political action that gets them money and whether or not this coincides with the dictates of a purist laissez faire vision is a matter of mere happenstance.” Yglesias lists this as one of our points of agreement, but in fact from my point of view there’s no “happenstance” about it; corporate opposition to free markets is systematic, because free markets are systematically inimical to corporate power. (Note: I don’t consider “repeal regulations on me but not on my competitors” to be a selectively pro–free market policy; I see it as purely and wholly anti—free market.)
Yglesias also describes the libertarian utopia as a place “where politics just somehow doesn’t happen.” I’m not sure whether this as meant as a description of (1) or of (2), but in any case it depends what is meant by “politics.” If by “politics” is meant the legalized oppression practiced by governments, then certainly libertarians are fighting for the abolition of politics, just as we fought for the abolition of slavery two centuries ago. But in a broader sense of the term, libertarians need have no objection to politics; as Don Lavoie points out, there is “much more to politics than government”:
Wherever human beings engage in direct discourse with one another about their mutual rights and responsibilities, there is a politics. . . . in the sense of the public sphere in which discourse over rights and responsibilities is carried on . . . . The force of public opinion, like that of markets, is not best conceived as a concentrated will representing the public, but as the distributed influence of political discourses throughout society. . . . Inside the firm, in business lunches, at street corners, interpersonal discourses are constantly going on in markets. In all those places there is a politics going on, a politics that can be more or less democratic. . . . Leaving a service to “the forces of supply and demand” does not remove it from human decision making, since everything will depend on exactly what it is that the suppliers and demanders are trying to achieve. . . . What makes a legal culture, any legal system, work is a shared system of belief in the rules of justice—a political culture. The culture is, in turn, an evolving process, a tradition which is continually being reappropriated in creative ways in the interpersonal and public discourses through which social individuals communicate.[1]
Yglesias concludes that “libertarianism, even at its very best, tends to suffer from an impoverished set of ideas about how corporate domination of the public policy space might be prevented,” since it “seems to have little to say about how to bring about political change except to work hand-in-hand with business lobbies.” I’m not sure what versions of libertarianism Yglesias has in mind when he refers to libertarianism at its very best, but if he thinks that libertarians have had nothing to say about political change other than working hand-in-hand with business lobbies, then I must conclude that his familiarity with libertarian literature has been rather narrow. (I note in passing that the three supposedly libertarian policies that Yglesias criticizes—replacing Social Security with forced private savings, defending the rights of industry to pollute, and favoring tax-funded highways over tax-funded mass transit—are widely rejected and sharply criticized by many libertarians.)
Yglesias’s own suggested strategies for political change are a mixed bag. Some of them, such as campaign finance legislation and strengthening the civil service, seem to involve a mere shift of power from the corporate class to the political/bureaucratic class—cold comfort for those who see little to choose between them. Libertarianism is equally opposed to monopolistic power whether it is wielded by corporations or by bureaucrats; again, Yglesias’s solution seems to involve shifting the reins of monopolistic power from one party to another, which for a libertarian misses the point—we don’t want people’s lives to be directed by politicians instead of by businesspeople, we want people to be free to direct their own lives.
But Yglesias’s other suggestions—community organizing, public-interest advocacy organizations, and seeking allies in the trade union movement—are ones I think libertarians would do well to take. (Those of us in the Alliance of the Libertarian Left have been advocating just these sorts of measures for some time.) And while it is true that many libertarians oppose “strong labor unions,” Yglesias overlooks a vocal pro-union minority within the libertarian movement; I commend to his attention the writings of Kevin Carson, Charles Johnson, and Brad Spangler. In the nineteenth century, libertarians were at the forefront of various causes considered “left-wing” today, including the labor movement, the feminist movement, the abolitionist movement, and the antiwar movement; the causes of libertarians’ long rightward detour and the left’s long stateward detour are a long-debated topic, but in any case it is long past time for libertarians and the left to slough off their respective authoritarian accretions and rediscover their common radical heritage.
Reply to Steven Horwitz
Steven Horwitz and I disagree about fairly little here (and his apprehension that I am on the verge of charging him with “vulgar libertarianism” is unwarranted; for the record, by the nonexistent powers vested in me I hereby certify Steven Horwitz as a non-vulgar libertarian!). But he does think that I understate the extent to which the success of large firms like Wal-Mart is due to genuine entrepreneurship as opposed to governmental patronage; to the extent that this is so, there is a libertarian case for defending Wal-Mart (and the like)—and Horwitz refers to his own paper comparing Wal-Mart’s response to hurricane Katrina with that of FEMA.
I heartily agree with Horwitz that Wal-Mart did a far better job of disaster relief than FEMA; I also agree with him that Wal-Mart’s superior performance in this regard is to be attributed to its operating in a more competitive context and so facing less extreme incentival and informational perversities. Where we disagree, perhaps, is over the size of the gap between the competitive context to which Wal-Mart owes its success and the competitive context that would exist under genuine laissez-faire. I think it’s large enough that the preferability of Wal-Mart over FEMA looks a bit like the preferability of Mussolini over Hitler; yes, Mussolini was better than Hitler, and that can be worth pointing out, but I’d rather spend time looking for an alternative to both of them.[2] (And if a firm that, e.g., treats its employees as badly as Wal-Mart does could really thrive in a freed market, that might well justify skepticism as to the value of markets.)
Horwitz notes his agreement with Will Wilkinson’s argument that “when the primary subsidy is the national and local automobile-centric transportation infrastucture, I can’t really see the point in picking on a company that makes consumers better off by making the most of the tax-funded infrastructure everyone uses.” Two points: First, I never claimed that funding for highways was the primary means by which Wal-Mart benefits from governmental intervention; it’s only one of a long list. (For those who share Wilkinson’s and Horwitz’s skepticism of the extent to which large firms like Wal-Mart benefit from state patronages and would suffer from diseconomies of scale in a free market, I recommend Kevin Carson’s two books[3] on the subject.) Second, the fact that everyone uses the tax-funded highway system doesn’t mean that everyone benefits from it equally; firms with wider distribution, and so higher shipping costs, benefit more from public highways than their competitors, and to this extent public funding of highways constitutes a net redistribution from local firms to nationwide firms.
Horwitz contrasts two strategies for replying to the charge that free markets create socioeconomic inequalities; one is to acknowledge, indeed to emphasize, the existence of these inequalities, but to blame them on government rather than the market; the other is to point out that the inequalities are actually less extreme than is often supposed, thus showing that even as hampered as it is, the market is still managing to improve the prospects of the poorest. Horwitz maintains that while I champion the first strategy, the second is both more accurate and “more rhetorically effective.” In particular, Horwitz worries that if libertarians become fearful of pursuing the second strategy lest they be accused of “vulgar libertarianism,” they will miss opportunities to rebut statist arguments, and we will end up with even more statism than we otherwise might.
I’m happy to agree that there are cases when the second strategy is quite accurate; even hampered markets can work surprisingly well. I think we may disagree, though, about the extent to which serious inequality pervades our society—and it is for precisely that reason that I’m also skeptical of his further claim that the second strategy is more rhetorically effective. Certainly there are many respects in which the living conditions of the poor have improved over the years. But there are also many respects in which they haven’t improved or have gotten worse; and even those aspects that have improved are still pretty bad—especially compared with what we could expect to see in a freed market. So when people hear free-market advocates assuring them that their lives are great and getting better, when the everyday reality they experience tells them the opposite, they’re likely to conclude that free-market advocates are apologists for existing inequalities.[4] At any rate, I find I make much more headway with leftists by explaining prevailing inequalities as creatures of the state than by downplaying them.
Reply to Dean Baker
I agree with pretty much everything that Dean Baker says in his piece about the horrific results of copyright and patent law, and consequently I have little to add beyond “Amen!”—and another “Amen!” to his closing wish to “see libertarians be as aggressive in confronting the interventions that support corporate power as they were in confronting Social Security.” (And I would likewise recommend that Baker take a look at the Alliance of the Libertarian Left to see some of the ways that libertarians are doing this.) Finally, in response to Baker’s question: “where are the libertarians’ research programs on alternatives to patents for financing drug research or alternatives to copyrights for financing creative and artistic work?” I will point him to the resources listed at the Molinari Institute’s anti-copyright page.
Notes
1 Don Lavoie, “Democracy, Markets, and the Legal Order: Notes on the Nature of Politics in a Radically Liberal Society,” pp. 112-116; in Social Philosophy & Policy 10, no. 2 (Summer 1993), pp. 103-120. See also the discussion of the “authoritarian theory of politics” in Roderick T. Long and Charles Johnson, “Libertarian Feminism: Can This Marriage Be Saved?” (online: http://charleswjohnson.name/essays/libertarian-feminism).
2 Note to all careless readers out there: if you think I just claimed that Wal-Mart is comparable to Hitler, you need to reread; a similarity of relations does not entail a similarity of relata.
3 Carson, Kevin A., Studies in Mutualist Political Economy, Booksurge (2007; online: http://mutualist.org/id47.html), and Carson, Kevin A., Organization Theory: An Individualist Anarchist Perspective, forthcoming (online: http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html).
4 See my discussion of Barbara Ehrenreich in “Proletarian Blues,” Austro-Athenian Empire, 25 November 2006 (online: http://praxeology.net/blog/2006/11/25/proletarian-blues).
Read: Keeping Libertarian, Keeping Left
In his response essay, Dean Baker declines to tally up a “score” of how well libertarians, or other groups, have defended a truly impartial, laissez faire economy. Instead, he suggests intellectual property as an obvious area where libertarians must challenge corporate power to distort the market. Patents that make health care more expensive and copyrights that artificially restrict whole areas of our culture are obviously concessions to corporatism, and the “extraordinary abuses” undertaken to enforce these privileges should be vigorously challenged. Although libertarianism has been skeptical of both patents and copyrights, Baker suggests that this is an area deserving still further attention, and one in which liberals could perhaps become solid allies.
Read: Libertarians and Corporate Power: Actions Speak Louder Than Words
Steven Horwitz offers several examples of so-called “de-regulation” that only served to benefit corporations, while leaving the government, and therefore the taxpayers, to shoulder the risks of the market. He argues that market competition is a form of regulation, albeit a kind worth wanting, as it forces corporations to respond to consumer demand and punishes them when they fail to meet it. He takes issue with Roderick Long’s lead essay by arguing that “playing defense,” that is, defending today’s corporations when they act consonantly with a fully freed market, is a valuable part of libertarian advocacy; one must nonetheless take issue with these same corporations when they violate the principles of laissez faire, and distinguish carefully between these cases.
Read: Untangling the Corporatist Knot
In his response to Roderick Long, Matthew Yglesias argues that although corporations naturally seek to win special privileges from the state, libertarianism is far from the obvious solution to the problem. Instead, he reiterates the charge that libertarians often act as corporate apologists and suggests that the net effect of any “free market” advocacy will tend strongly toward corporate power. Liberals may have much to learn from libertarians on certain issues and in some policy areas, but the laissez-faire solution to corporate political influence is unworkable.
Read: Politics Compromises the Libertarian Project
In this month’s lead essay, philosopher and libertarian theorist Roderick Long draws a sharp contrast between corporatism and libertarianism properly understood. He argues that liberals, conservatives, and even libertarians have all been guilty to some degree of obscuring this difference, and that the quality of our political discourse has suffered accordingly. He suggests that libertarians should guard themselves against falling into the trap of “vulgar libertarianism,” in which all things good spring from business, and particularly from business as usual. Corporations, he argues, should be no more free of scrutiny than any other institution in a free society, and often businesses have done more than their share to hamper free economic relations in the industrialized world.
One implication of all of this is that the truly free market is farther away than we imagine. Long suggests several ways in which a freed market would be different from what we see around us today. Notably, nearly all of these differences are to the benefit of the consumer and the small or start-up business. These likely outcomes of laissez faire suggest new grounds for left-liberals and libertarians to revise their thinking on economic issues and on politics more generally.
Read: Corporations versus the Market; or, Whip Conflation Now
