The Corporation and the State

The latest debate at Cato Unbound is devoted to the topic "When Corporations Hate Markets." The lead essay, by the libertarian philosopher Roderick Long, argues that

Corporate power depends crucially on government intervention in the marketplace. This is obvious enough in the case of the more overt forms of government favoritism such as subsidies, bailouts, and other forms of corporate welfare; protectionist tariffs; explicit grants of monopoly privilege; and the seizing of private property for corporate use via eminent domain (as in Kelo v. New London). But these direct forms of pro-business intervention are supplemented by a swarm of indirect forms whose impact is arguably greater still....

In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles. Small wonder that big business, despite often paying lip service to free market ideals, tends to systematically oppose them in practice.

Not content to criticize lefties and conservatives who conflate the corporate state with laissez faire, Long argues that many libertarians have only added to the confusion:

If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing (though here, as above, there are plenty of honorable exceptions to this tendency). Consider libertarian icon Ayn Rand's description of big business as a "persecuted minority," or the way libertarians defend "our free-market health-care system" against the alternative of socialized medicine, as though the health care system that prevails in the United States were the product of free competition rather than of systematic government intervention on behalf of insurance companies and the medical establishment at the expense of ordinary people.

The whole article is here. Watch the Cato Unbound site for response essays by the liberal writer Matthew Yglesias, the leftist writer Dean Baker, and the libertarian writer Steven Horwitz.

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  • ||

    If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing

    Fuck you Roderick Long.

  • ||

    Roderick Long is now officially the David Brooks of libertarians.

    Cato must have had to dig deep to find that good of a left wing fluffer.

  • Yeah....||

    So,....

    Anything substantial to say Corning?

  • ||

    Blame the corporations for taking advantage of corrupt politicians?

  • ||

    Corporate power depends crucially on government intervention in the marketplace. This is obvious enough in the case of the more overt forms of government favoritism such as subsidies, bailouts, and other forms of corporate welfare; protectionist tariffs; explicit grants of monopoly privilege; and the seizing of private property for corporate use via eminent domain (as in Kelo v. New London).

    All of which are opposed by True Libertarians.

    In a free market, firms would be smaller and less hierarchical, more local and more numerous

    I don't see why. Just to take one example of a market that is pretty free of overt government intervention of the kind listed above: Bookstores. Most "smaller, less hierarchical" local bookstores are now histoy, replaced by Big Box Bookstores and on-line booksellers that have huge inventories and lower prices.

    If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing

    Only if you filter out about 90% of what libertarians say.

  • ||

    Yeah.... | November 10, 2008, 2:23pm | #
    So,....

    Anything substantial to say Corning?


    RC Dean explained it pretty well....but I think my "Roderick Long is now officially the David Brooks of libertarians." already covered it.

  • classwarrior||

    Perhaps one day mainstream libertarians will wake up to the nonsense that corporations have the same rights as flesh and blood human beings. They shouldn't because:

    1) They can't be held to the same level of responsibility as a person because you can't put a company in prison.

    2) They have a mandate to be amoral- maximizing profit by whatever means they can get away with, with the resources to hire the best lawyers and purchase the best democracy money can buy.

    The wreckage of this farcical system is now on display for all to see. Happy bailouts everyone!

  • CLS||

    Long is right. The difference between a conservative and a libertarian, on this issue, is that libertarians favor free markets while conservatives support corporate interests. Big Business has a history of pushing through regulations and controls in order to reduce competition in favor of themselves. The reason that the regulatory state continues on is because the Left thinks it strips business of power, business knows it gives them power, and conservatives sutpidly think business is a bastion of free markets. Against that Iron Triangle of regulation, greed and stupidity (socialists, business and conservatives) only free market libertarians stand in opposition.

    That tends to mean the regulatory state moves ahead. Socialists get the regulations they want. Big Business gets richers and limits competition using the regulations. And conservatives think that supporting special business interests is the same as supporting free markets.

  • ||

    In a free market, firms would be smaller and less hierarchical, more local and more numerous.

    Not in the case of, say, car dealerships. In that industry, the power of government is entirely on encouraging smaller, less hierarchical, more local, and more numerous firms.

  • Seward||

    R.C. Dean,

    With regard to your bookstore example it would helpful to know if indeed their growth was free of such intervention. I don't know enough about the book industry to say yea or nay.

  • ||

    Its somewhat tempting to cater to the lefty hatred for "corporations". God knows, it would make me more popular in the hipster circles I travel in. But then I'd feel like a hack and shill just trying to make libertariaism more popular amoung people who never will really accept it.

    Businesses may get big. So what? It should not matter how big they get as long as they aren't getting any kind of government assistance. Buying into the whole anti-big-business line would be carrying water for the other side.

  • Seward||

    R.C. Dean,

    On the other hand, there is nothing wrong with a monopoly, so even if the market produced a big, etc. firm, I don't think that would be a problem.

  • ||

    Joshua Corning-

    You don't doubt Mr. Long's premise that corporate power depends upon, and is greatly enhanced by, government intervention in the marketplace, do you?

  • concerned observer||

    Hear the sound of libertarians loudly denouncing anybody who suggests that they might have some interest in common with the left. Which confirms my theory that libertarians are just conservatives who hope one day to smoke pot.

  • concerned observer||

    Then again, it's probably best that anti-corporate ideas aren't associated with you people. That would probably make them look like massive cranks.

  • concerned observer||

    @Hazel Meade-so you think that being against the special privileges of corporations makes you a "hack"? Wow. you've even betrayed your own insane ideas.

  • ||

    "All of which are opposed by True Libertarians."

    "Only if you filter out about 90% of what libertarians say."

    RC, you realize that long is criticizing the rhetoric of some libertarians in defense of libertarian ideology, yes? Not suggesting that libertarianism caters to corporate thievery. Because if you RTFA, he is agreeing with you on both these points.

  • Lester Hunt||

    I know Rod Long. Rod Long is a friend of mine. And he is no David Brooks. He is a good, solid anarchist. So there.

  • Reformed Republican||

    With regard to your bookstore example it would helpful to know if indeed their growth was free of such intervention. I don't know enough about the book industry to say yea or nay.

    Well, they do use public roads for shipping.

  • ||

    "Businesses may get big. So what? It should not matter how big they get as long as they aren't getting any kind of government assistance. Buying into the whole anti-big-business line would be carrying water for the other side."

    Seriously, did anyone actually read Long's article?

    There is nothing wrong with businesses getting big, provided they do not manipulate the power of the state to do so (which, if you've been paying attention to developments of the past few weeks, many do).

  • ||

    Perhaps one day mainstream libertarians will wake up to the nonsense that corporations have the same rights as flesh and blood human beings.

    No, they don't. They can't vote. They have very limited free speech rights. They can be bought and sold. Etc., etc.

  • ||

    If it weren't for government intervention (ie: social welfare spending) WalMart and their ilk would be forced to pay their workers a real living wage.

  • Thomas||

    1) They can't be held to the same level of responsibility as a person because you can't put a company in prison.

    Seriously?...

    You can imprison the people who run that company though.

    Are you one of those people who believes in sentient, rogue SUVs running people off the road? I guess that example is dated now...but I'm sticking with it.

  • ||

    Regarding capitalism, Roderick Long said:

    "Since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business."

    I couldn't agree more. If we define capitalism to be our current political system, as most people do, then I am certainly opposed to capitalism. Which is why I don't even bother to defend that term anymore.

  • ||

    Thomas,

    He thinks Maximum Overdrive was a documentary.

  • ||

    R C Dean,

    The bigbox bookstores get the same sort of "breaks" as mentioned in the article as Wal-Mart does, although probably not to the same extent.

    On-line book sellers are using the
    [sarcasm]
    completely un-regulated and government-free
    [/sarcasm]
    Internet as the backbone of its business. And they get the advantage--good for us consumers, by the way--of not having to collect sales taxes for out-of-state purchases. (This is not to be construed as a call for taxing Internet-based purchases!)

    I really don't know whether the author's statement about having smaller and more localized companies would neccessarily be true. But I think it would be hard to find a large corporation today that does not enjoy a fair amount of government "help."

  • egosumabbas||

    "Not in the case of, say, car dealerships. In that industry, the power of government is entirely on encouraging smaller, less hierarchical, more local, and more numerous firms."

    HAHAHA! Did you know that if you personally sell your used car by parking it in your driveway and putting a for sale on it, the One State requires you to get a used car license? Seriously. Even if you're just selling one car.

    Also I must me one of those minority libertarians who's extremely skeptical of corporate personhood. A business should be inseparable from the reputation of the person who heads it. I think the market would offer something similar to malpractice insurance in response to a lack of corporate personhood.

  • ||

    I also think corporate personhood is unnatural and problematic.

  • ||

    I'm sure there are plenty of corporations that think government involvement is a net negative. Also, strict regulations give an advantage to larger entities, who can afford compliance staffs. Big companies aren't always the bad guy, though some definately are.

  • ||

    Dear Roderick Long,

    Next time you disapprovingly cite Ayn Rand and one of her essays, please be sure that the philosophical premise of said essay actually supports your thesis. There is no way you could fairly construe "America's Persecuted Minority" as apologia for corporatism.

    Thanks!

    The Literate.

  • ||

    HAHAHA! Did you know that if you personally sell your used car by parking it in your driveway and putting a for sale on it, the One State requires you to get a used car license? Seriously. Even if you're just selling one car.

    I also know that state-by-state car dealership regulations make it illegal for car companies to run their own dealerships or sell cars directly. You may think that in the absence of regulations that firms would be smaller and less hierarchical, but I highly doubt it. I suspect that the car manufacturers would own their network of dealerships, and it would be more hierarchical than currently.

    Used car markets, for all their regulation, have less regulation than new car markets. I suspect that if new car markets were less regulated, you would see larger, CarMax-type corporations along with car manufacturer owned dealership networks. This would increase the size of operations and increase hierarchy.

  • ||

    The bigbox bookstores get the same sort of "breaks" as mentioned in the article as Wal-Mart does, although probably not to the same extent.

    Do they? I've never seen one in a stand-alone facility that would have been condemned for it. Just what government support are they really getting? Using infrastructure that is open to your competitors (like the roads and internet) is not the kind of anti-free market government involvement that we are supposedly talking about.

    Why is it inconceivable to believe that big-box bookstores displaced small local bookstores because they offer more books at lower prices?

    So, I'm still asking: what favors has the State done for Barnes & Noble? Borders?

  • ||

    It's obviously the case that government regulation in car dealership protects the incumbents. That squeezes out both the ordinary person wanting to sell one car or start a new dealership, but also people wanting to form larger multi-state companies. On balance, it's my strong belief that in the absence of regulation, we would see more large car dealership networks than new small ones, especially in the area of new cars.

  • egosumabbas||

    "It's obviously the case that government regulation in car dealership protects the incumbents. That squeezes out both the ordinary person wanting to sell one car or start a new dealership, but also people wanting to form larger multi-state companies. On balance, it's my strong belief that in the absence of regulation, we would see more large car dealership networks than new small ones, especially in the area of new cars."

    Since there are a far greater number of used cars than new cars, I would say that on the whole, the art of selling cars would become much more decentralized than it is today. Take for instance the car sales on craiglist, which are arguably black market (free market?) sales since the sellers probably have no used car permits.

  • ||

    I think many of the above comments demonstrate why libertarianism isn't more popular. Somebody dares to suggest that part of the reason libertarianism is popular and/or misunderstood is because we do a poor job of selling it and everybody jumps all over him as Judas, Benedict Arnold and the guy who canceled Arrested Development all wrapped into one.

    Look, libertarian ideas are still lagging far behind the ideological left and right. As far as I can tell, there are two explanations for it: 1.) most people understand libertarianism and don't like it or 2.) most people don't understand libertarianism because we suck at explaining/marketing it. The correct explanation seems pretty clear to me.

  • ||

    Since there are a far greater number of used cars than new cars, I would say that on the whole, the art of selling cars would become much more decentralized than it is today. Take for instance the car sales on craiglist, which are arguably black market (free market?) sales since the sellers probably have no used car permits.

    Actually, the craigslist sales point against your argument, to me. An individual person is easily able to sell a car via classifieds or craigslist, regardless of the technical legality. There's no rush to crack that down. However, someone who wanted to start a large new car dealership would definitely run into trouble, and a car manufacturer wanting to own their own dealers and run it on an interstate basis would absolutely have problems.

    So it seems to me that current regulation on used cars, regardless of technical legality, creates more of a barrier to large operations than to individual private sellers. Anyone would wants to sell their own car through craigslist can do it. Hence, without the regulation I still expect that the more dramatic change would be in more large, hierarchical operations across several states.

    ("A far greater number of used cars than new cars?" A far greater number of used car sales than new car sales, I could believe, yes. "More cars currently owned by someone other than their first owner," sure. But all used cars were once new cars.)

  • ||

    In any case, FindLaw claims that private car sales are legal and except from Used Car Dealer licensing requirements in most states. There could be exceptions, I grant.

    OTOH, actual car companies have had tremendous problems when they've even thought about setting up their own dealerships (or when GM's tried to close down one of their many brands.)

  • ||

    "It's obviously the case that government regulation in car dealership protects the incumbents. That squeezes out both the ordinary person wanting to sell one car or start a new dealership, but also people wanting to form larger multi-state companies. On balance, it's my strong belief that in the absence of regulation, we would see more large car dealership networks than new small ones, especially in the area of new cars."

    I simply can't see how this would be the case, as most large dealerships would begin as smaller dealerships, and be forced to compete with other smaller dealerships. Companies in such a situation, with such a competitive economy, would likely not have the opportunity or resources to expand. OTOH, it is entirely possible that such a company may find that administrative costs are reduced by consolidating.

    Ultimately the debate is largely irrelevant, since the consumer would stand to benefit exponentially from either situation.

  • ||

    For example, Wisconsin sets the limit at five cars a year until you need a license. This is a common limit, as seen in Tennessee, West Virginia, and elsewhere.

  • ||

    It's a little surprising that more here haven't read any of Long's writing before. As for the subject matter, although worthy of intense debate, it's hardly as if the ideas of corporate personhood, limited liability etc. have never been attacked on libertarian grounds before. There's a long history of such.

    Simply put, it's probably unlikely that corporations could actually grow to their current size without the help of government. After all, at a certain point diseconomies of scale play a huge role, and the costs of running such a large, unweildy operation are prohibitive without being able to socialize them through the government.

    As for big-box book stores, I don't know any specifics, but they certainly benefit from eminent domain abuse, a corporate income tax that they can afford but smaller competitors can't, socialized shipping costs etc. These sorts of gov't favors are at the heart of every major corporation and yes, there are benefits from that, but there are also drawbacks. It really is hard to argue that the corporations we see today could actually exist in a market free from gov't interference. Hey, if they could, more power to them, but as it stands they don't.

    As for car lots, as someone who was responsible for opening several there are 2 major problems. 1.)Local zoning- no small town petty bureaucrat wants anything to do with a car lot (so you have to pay them off--I mean pay to have "studies" done about the viability of auto sales in the area). The local stuff is way worse than any federal rules. 2.) Banks simply don't want to finance a recently opened car lot...they got burned in the late 90's selling bad paper for cars like they just did for houses (no, they never learn). You need to be in business for years before they'll seriously consider running paper for you.

    As far as PA goes, anyone can sell up to 5 cars a year without a license.

  • Roderick T. Long||

    All of which are opposed by True Libertarians.

    Well, sure. I never denied that libertarians oppose these things. What I claimed was that many libertarians fail to see the extent to which the firms they regard as exemplars of free-market success depend on these things.

    Most "smaller, less hierarchical" local bookstores are now histoy, replaced by Big Box Bookstores and on-line booksellers that have huge inventories and lower prices.

    And tax-subsidized transportation costs, and regulation-imposed oligopsonistic labour markets (to say nothing of IP protections). I talk about all this in my article.

    Not in the case of, say, car dealerships. In that industry, the power of government is entirely on encouraging smaller, less hierarchical, more local, and more numerous firms.

    So the government didn't bail out Chrysler, and they're not about to bail out GM? I'm glad to hear it.

    But then I'd feel like a hack and shill just trying to make libertariaism more popular amoung people who never will really accept it.

    a) Don't underestimate the possibilities of success here. I know lots of lefties who were converted to free markets by reading all-left.net kinds of stuff. b) Whether or not incorporating anticorporatism makes libertarianism more popular, it makes it more true.

    Businesses may get big. So what? It should not matter how big they get as long as they aren't getting any kind of government assistance. Buying into the whole anti-big-business line would be carrying water for the other side.

    But if they wouldn't (ordinarily) get so big without govr. assistance, what's wrong with pointing that out?

    Next time you disapprovingly cite Ayn Rand and one of her essays, please be sure that the philosophical premise of said essay actually supports your thesis. There is no way you could fairly construe "America's Persecuted Minority" as apologia for corporatism.

    Next time you criticise someone for accusing Rand of supporting corporatism, please make sure that the person you're criticising actually accused Rand of supporting corporatism. I didn't.

  • Sam Grove||

    It's impossible to specify how a real free market would look, but there may be reason to suppose that one of the efficiencies of scale is access to legal resources. Large corporations have legal departments. Small businesses have to hire legal assistance on a need basis. There is a similar issue with tax paperwork.


    The issue with the left is that their opposition to corporations is so reflexive and emotive that they are only happy in bashing corporate power rather than thoughtful about how to deal with the problem.

    The left actually seems to believe Republicans only when they claim to be proponents of limited government and free markets.

  • ||

    I simply can't see how this would be the case, as most large dealerships would begin as smaller dealerships, and be forced to compete with other smaller dealerships.

    Huh? What would that have to do with the end result being more large dealerships than the current situation? As you note, dealerships might merge. If a car company started its own owned-and-operated dealer network, which it cannot do legally now, then it would not necessarily start out as a smaller dealership.

    There has been a proliferation of chain dealerships recently, but the patchwork of state regulations prevents a lot of expansion across state lines. And car manufacturers have wished to have company-operated dealerships. See this FTC speech (with footnotes) for a brief discussion.

  • ||

    Not in the case of, say, car dealerships. In that industry, the power of government is entirely on encouraging smaller, less hierarchical, more local, and more numerous firms.

    So the government didn't bail out Chrysler, and they're not about to bail out GM? I'm glad to hear it.



    Roderick T. Long, do you not know the difference between a car manufacturer and a car dealership? Chrysler and GM don't own their car dealerships, much as they'd like to.

    Car dealership laws are designed to protect the incumbent local car dealers. They are regulated on a state-by-state level, and protect local franchise holders at the expense of the national companies. Perhaps things would be different were they regulated on a federal level, but they are not.

    It is folly to pretend that in every situation regulation leads to larger, less local, more hierarchical companies. There are certainly exceptions.

  • Scott Bieser||

    Watch out for "concerned observer." I think he's a narc.

    The argument that government benefits big-box stores generally is based on the observation that the government's interstate highway system allows large firms to keep their warehouses "on wheels," in effect, which benefits them disproportionately compared with the small shops.

    I don't know if I buy Long's assertion that a true free market would result in mostly smaller and less hierarchical businesses, or not. I do think it would result in a greater variety of types of businesses.

    And the main point, that too many self-described libertarians have erroneously conflated free-market principles with good-for-corprations principles, is valid. We need to cut that shit out.

  • Roderick T. Long||

    To John Thacker -- Sorry, I read the car dealership reference too quickly. (Just as you apparently read my reference to Rand too quickly.)

  • ||

    So, I guess the free market solutions to big business is to disband them when they reach a certain size because inevitably they will only become a leech off government?

  • Anon||

    The issue with the left right is that their opposition to support of corporations is so reflexive and emotive that they are only happy in bashing promoting corporate power rather than being thoughtful about how to deal with the problem.

  • ||

    And tax-subsidized transportation costs, and regulation-imposed oligopsonistic labour markets (to say nothing of IP protections). I talk about all this in my article.

    Those aren't advantages enjoyed by big-box bookstores but not smaller bookstores. Everybody in the book biz gets the same IP laws, roads, and internet.

    Even the labor costs - most of the positions in big-box bookstores are frontline retail - those people can stock shelves and man a cash register anywhere, so Borders competes with all the other retail for their services.

    I will say that some internet businesses have an advantage in not being required to act as tax collector for state sales taxes. For super-high-taxed commodities like tobacco, this is major.

    If you do away with limited liability corporations altogether, will we see fewer big firms? Sure. Nobody will let their money out of their sight, so to speak, if they are going to be personally responsible for everything done by any firm that they have invested in. The capital markets will be seriously restricted by a personal liability rule, and big firms will be hardest hit.

    Of course, I've never understood why my investment should create personal liability for me when takes the form of equity, but not debt. But that's a debate for another day.

  • ||

    Another extra s, what's wrong with me today.

  • Roderick T. Long||

    Oops to John Thacker -- I confused you with Angry Optimist. More over-swiftness.

  • Roderick T. Long||

    So, I guess the free market solutions to big business is to disband them when they reach a certain size because inevitably they will only become a leech off government?

    I think that gets the direction of causality wrong.

  • adrian||

    classwarrior:

    2) They have a mandate to be amoral- maximizing profit by whatever means they can get away with, with the resources to hire the best lawyers and purchase the best democracy money can buy

    are you saying maximizing profits is amoral?

  • ||

    You don't doubt Mr. Long's premise that corporate power depends upon, and is greatly enhanced by, government intervention in the marketplace, do you?

    Of course not...my doubt is how he presented the opinion that this positions is not a consensus opinion of most libertarians.

    Do you poeple even know who David Brooks is?

    Long took the leftist position that libertarians are shills for corporations. Which is complete and utter BULLSHIT!

    Also more bullshit (although smaller less important bullshit) is that there is some sort of perfect size of corporations to be. My opinion is that libertarians in general could give a rats ass if corporations are big or small so long as government is not choosing which are winners and which are losers depending on who is in power in DC. Rather libertarians prefer that winners and losers (corporate or otherwise) are determined by the free market.

  • concerned observer||

    I masturbate to teletubies and have only 5 brain cells.

  • classwarrior||

    It is if it's done with no regard to the consequences others face as a result. Ask those decision makers how it would feel to be on the receiving end of their actions. Think of pollution and corruption of the political process to name two.

  • ||

    R C Dean,


    Using infrastructure that is open to your competitors (like the roads and internet) is not the kind of anti-free market government involvement that we are supposedly talking about.




    Actually, that's exactly what we are talking about, if we're talking about what Roderick Long said. From the article...


    But not only is Wal-Mart a direct beneficiary of (usually local) government intervention in the form of such measures as tax breaks, but it also reaps less obvious benefits from policies of wider application. The funding of public highways through tax revenues, for example, constitutes a de facto transportation subsidy, allowing Wal-Mart and similar chains to socialize the costs of shipping and so enabling them to compete more successfully against local businesses; the low prices we enjoy at Wal-Mart in our capacity as consumers are thus made possible in part by our having already indirectly subsidized Wal-Mart's operating costs in our capacity as taxpayers.



    I am sure that the big box bookstores receive the things mentioned: tax breaks and use of infrastructure.

  • ||

    I have the distinct feeling that Long will not be addressing my posts =)

  • ||

    Yerbaff,

    Last time I checked local businesses used roads to ship in their merchandise the same as Wal-Mart.

  • adrian||

    classwarrior: Why stop there? How dare a company become so efficient that they put competitors out of business and those employees out of work! By what right can they callously put people out of work by creating a better product? These robber barons must be stopped!

    If the people owned all companies we could put an end to all the terrible greed.

  • ||

    The best comment so far in response to Long is Peter Klein's post on the Mises Blog: Long on the Corporation, which states:
    The current issue of Cato Unbound features Roderick Long's critique of "Conflationism," defined as the "pervasive conflation of corporatist plutocracy with libertarian laissez-faire." As Roderick rightly points out, in the mixed economy large corporations are among the prime beneficiaries of government largess, such that a wholesale defense of "big business" is silly and counterproductive for libertarians. However, Roderick spoils (for me, anyway) an otherwise excellent summary by jumping to the unwarranted conclusion that today's corporations are, on average, larger, more hierarchical, and more diffusely owned than the firms that would emerge under laissez faire:



    In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles.



    As I've pointed out many times (1, 2, 3) to Roderick and to Kevin Carson, from whom Roderick draws much of his analysis on this point, this is a purely speculative counterfactual, and an unconvincing one at that. Roderick and Kevin do a fine job documenting a slew of government policies that favor large, complex, vertically integrated firms: direct subsidies, of course, but also indirect benefits from intellectual property law, bootlegger-and-baptist-style restrictions on market entry, transportation subsidies, various aspects of the tax code, etc. From this they conclude that smaller, more "egalitarian" enterprises, such as worker-owned cooperatives, would tend to flourish under the free market.

    The problem is that their argument cuts both ways. Certainly large firms benefit from the state. But so do small firms. Corporations are under stricter antitrust and regulatory scrutiny, are more likely to be the victims of political rent extraction (in Fred McChesney's sense), and are subject to stricter disclosure requirements (SOX being only the most visible, recent example) than their smaller competitors. Small firms benefit from state-funded incubators, SBIR awards, regional development grants, and a host of other interventions designed to foster "entrepreneurship." Trade barriers, war, state control of education, and a host of other interventions retard the international division of labor, reduce stocks of human capital, and lower the marginal product of labor, all of which reduce the scale and scope economies that favor large-scale production.

    Which set of effects outweighs the other? It is impossible to say, ex ante. The firm on the purely free market could be larger, more vertically integrated, and more hierarchical than the typical corporation under the mixed economy. Moreover, the worker-owned cooperative, the partnership and proprietorship, the decentralized "open-production" system, all suffer from serious incentive, information, and governance problems, almost none of which are mentioned in the anti-corporation libertarian literature. I suspect this literature's preference for small-scale production is based primarily on aesthetic, rather than scientific, grounds.

  • Roderick T. Long||

    Long took the leftist position that libertarians are shills for corporations

    Nope, not what I said. Try again.

  • ||

    Joshua Corning-

    Yes, you are right about the notion that libertarians are just shills for big corporations. Lord knows, I have been on the receiving end of that nonsense in many a debate/argument/bs session.

  • ||

    "So, I guess the free market solutions to big business is to disband them when they reach a certain size because inevitably they will only become a leech off government?"

    Now do you guys see the fallacy of the anti-immigration libertarian argument?

  • Roderick T. Long||

    For those who doubt the reality of "vulgar libertarianism," check out Kevin Carson's regular feature "Vulgar Libertarian Watch": http://tinyurl.com/5f7f36

  • Roderick T. Long||

    the notion that libertarians are just shills for big corporations

    Since I am a libertarian, I obviously do not hold that "libertarians are just shills for big corporations."

    But the perception that libertarians are shills for corporations has a real basis in the tendency of many libertarians to treat the case for free markets as though it justified various features of the existing market. If you doubt that, then again, read through the various entries of "Vulgar Libertarianism Watch" -- there are a lot of examples collected there.

  • ||

    Nope, not what I said. Try again.

    Perhaps then you could parse this sucker as saying otherwise?

    If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing (though here, as above, there are plenty of honorable exceptions to this tendency).

    Are problem is that we "sound" like we carry water for corporate interests...not that we are mischaracterized by the left? Give me a break.

  • ||

    Kinsella,

    You want to tell us again how a state is not a government?

  • ||

    "In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles."

    You know, H&R regular fluffy has eloquently argued this quite a bit here. Just saying...

    This is a neat article. If I could buy that libertarianism wouldn't just result in rule by the wealthy or corporate rule I think I could buy more into it...

    But as I've said there are two kinds of libertarians, and one can run into both of them on H&R regularly. The first kind opposes government interventions because they suspect that it will in the end harm the overall good, maintain inequality of opportunity, and harm the very people it proposes to help. The second kind opposes government intervention because they suspect it will promote the overall good, erode inequality and help the very people it proposes to help.

  • OGRE||

    This was an excellent and well-reasoned article. The 'objections' posted above seem to either be from those who didn't read or comprehend the article, or those who are just simply swinging ideological axes from the left and right.

    I've seen this conflation of terms too much. My leftist friends decry 'capitalism' and 'free markets' due to the power of corporations (although they willfully neglect to decry that uber-corporation which is government), while my rigth leaning friends sing the praises of 'free market' monetary interventions and privatized monopolies.

    Its a shame, though, that in order to compete in the marketplace of ideas one must either spend an inordinate amount of time cleaning up the mess of confusion fostered by one's opponents, or adopt the same techniques of purposefully confusing rhetoric.

  • Roderick T. Long||

    Perhaps then you could parse this sucker as saying otherwise?

    Yes. Once again: It's the difference between a) advocating corporatism and b) praising, as though they were the results of the free market, features that are actually the result of corporatism.

  • ||

    Perhaps one day mainstream libertarians will wake up to the nonsense that corporations have the same rights as flesh and blood human beings.

    I didn't realize they did! So I can marry one then? Because, as a libertarian, that's how much I love corporations: so much that I want to marry them.

  • Fluffy||

    Using infrastructure that is open to your competitors (like the roads and internet) is not the kind of anti-free market government involvement that we are supposedly talking about.

    RC, that's not the point.

    If the state creates infrastructure that would not exist in a market-driven environment, and that infrastructure makes it easier to build and administer large firms, then the state intervention is favoring size.

    The fact that the infrastructure is open to everyone is irrelevant. That just means that everyone has an equal chance to be the victorious firm that assumes an unnaturally large size due to the state's intervention. The victor's position of dominance is still based on the state, because in the absence of the infrastructure in question the entire nature of competition would be different.

  • ||

    Stephen Kinsella-

    "Cutting both ways"

    The items that you have set forth in support of the proposition that state intervention also aids small firms actually undercut, to some extent, your position. The state funded incubators of which you speak are often gold mines for larger, state favored enterprises such as banks, mortgage companies, economic development organizations and the like. Take, for example, SBA loans. IMHO, an SBA loan is a state funded incubator in that the federal government guarantees the loan made by a bank to the SBA borrower. Sure, the SBA borrower may be a start-up or a small mom & pop concern, but, the bank is guaranteed it will not lose, whereas the borrower has no such guarantee. I submit that the banks would scream loudest if the SBA regime was seriously threatened.

  • ||

    http://tinyurl.com/5f7f36

    Keylogger?

    to be safe i would use this one:

    http://mutualist.blogspot.com/2005/01/vulgar-libertarianism-watch-part-1.html

  • ||

    Consider the conservative virtue-term "privatization," which has two distinct, indeed opposed, meanings. On the one hand, it can mean returning some service or industry from the monopolistic government sector to the competitive private sector-getting government out of it; this would be the libertarian meaning. On the other hand, it can mean "contracting out," i.e., granting to some private firm a monopoly privilege in the provision some service previously provided by government directly.

    Two Words: Walter Reed.


    Privitization without competition is a farce.

  • ||

    Because, as a libertarian, that's how much I love corporations: so much that I want to marry them.

    Marc wins

  • Fluffy||

    Yes. Once again: It's the difference between a) advocating corporatism and b) praising, as though they were the results of the free market, features that are actually the result of corporatism.

    Mr. Long:

    I have been thinking about this exact issue for some time, but it leads to a further question.

    Since so many features of "late capitalism" can be blamed on "corporatism" and not on the market, at what point do we have to start to wonder whether or not our prosperity is the result of corporatism and not the market?

    I've gone looking for state interventions in the historical record in a quest to "blame" many aspects of modern US life on the state. But in the course of doing so I started to wonder if the influence of the state is so pervasive that it's no longer possible to determine where we'd be without it.

  • ||

    Yes, both large bookstores and small use the same roads, but that's hardly an argument. The point is that the large bookstores could not offer their massive inventory at drastically reduced prices without taking full advantage of transportation subsidies.

    They get a discount because they buy books in bulk, which is fair enough, but in order to move all those thousands of books they need to use the trucking industry and highways, both of which depend upon the socialization of costs to the larger population. In other words, their advantage is magnified due to their size, which is at least partially due to gov't help. The bigger you are, the more the government helps you.

    Or to put it another way: the corporate income tax is 35% for both large and small corporations. It's the same, so there's no advantage right? Wrong. That obviously benefits the larger corporation, which can absorb the hit and hurts the smaller corporation which can no longer afford to compete.

    The system is set up to favor larger, more powerful corporations at the expense of smaller businesses, which only makes sense...after all, if you were a politician looking to maintain and aggregate power for yourself while appearing otherwise, how would you do it?

  • ||

    "Since so many features of "late capitalism" can be blamed on "corporatism" and not on the market, at what point do we have to start to wonder whether or not our prosperity is the result of corporatism and not the market?"

    I was thinking something crudely similar. If we did not have these corporatist features would we be the first rate powerhouse we are? We could be someplace more free but also poorer overall perhaps.

  • ||

    Fluffy,

    There is no wondering necessary. Read up on your Hazlitt. State interference a priori distorts the market and decreases prosperity.

  • ||

    "State interference a priori distorts the market and decreases prosperity."

    I'd be wary of anyone who talks about a priori explanations of empirical realities...

  • ||

    Crow Eating Dumbass-5:01 pm

    Names, please.

  • Fluffy||

    There is no wondering necessary. Read up on your Hazlitt. State interference a priori distorts the market and decreases prosperity.

    Right, but the plausibility of libertarian arguments about the utility of freedom rests on the historical performance of polities we are now saying are "corporatist".

    If we discard the historical data from states that are marked by corporatism, what's left? Nothing.

    I am not a "utility libertarian" for this reason, among others.

  • JP||

    This may be a little OT, but I hope people will take it up.

    I'm a corporate lawyer, and no one is second to me in appreciating the wealth that the corporate form has enabled modern Western economies to create. However, talking with people about the recent election has caused me to consider one ugly possibility: Will corporations be the victim of their own success?

    By that I mean the following: Corporations have been such a successful form of business organization that they have grown much larger than other forms (historically, mostly sole proprietorships and partnerships). By the 1920s, corporations had succeeded in "making America corporate," to borrow an apt phrase from historian Olivier Zunz. More and more Americans became life-long employees, widely separated from the concerns of ownership, and fewer and fewer Americans were entrepreneurs and active owners.

    As a result, we have the American of today -- someone who is accustomed to having things "taken care of" by a large bureaucracy, someone who imagines that goodies just "come from the central office" and that costs are just "written off," someone who sees the economy as a zero-sum game in which the more money the boss makes, the less the worker makes. No wonder people are so deaf to the small-government message.

  • ||

    If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing (though here, as above, there are plenty of honorable exceptions to this tendency). Consider libertarian icon Ayn Rand's description of big business as a "persecuted minority,"

    Mr. Long,

    You're forcing me to agree with joshua corning here. You cite Ayn Rand's above-mentioned article as a "reason" that libertarians are perceived as carrying water for corporatism, even though the subject-matter of the article has nothing to do with that whatsoever.

    So, in citing this as "evidence", you're perpetuating the mischaracterization of the content of this article rather than taking the time to refute it.

    Also, most attacks on "big business" do not come from legitimate libertarian gripes or free-market premises, they come from airheaded buffoons who just hate to see "inequality", even if the inequality is a matter of bad personal life choices made by the poor and good ones made by the wealthy.

    Frankly, I'm beginning to suspect that the label "libertarian" is intellectually bankrupt. Anytime anyone defends the action of a business, some "left-libertarian" is going to point to the existence of some infrastructure and say "ah ha! The Merger of Big Business and Big Government!"

    At some point, you need to say "look, we're not arguing about this any more. "Where do we go from here?"

    Prime example of what I am talking about is this silly, silly Barnes and Noble argument. "Stretch" is appropriately nicknamed, because arguing that Big Business's interference in the marketplace extends to the building of infrastructure...well, it's down the path of the ridiculous at this point.

  • Roderick T. Long||

    I'd be wary of anyone who talks about a priori explanations of empirical realities...

    So you don't believe in the application of mathematics to reality? Or is your objection only to a priori economic theory and not to mathematics?

    In defense of economic apriorism see:
    http://praxeology.net/antipsych.pdf

  • Roderick T. Long||

    You cite Ayn Rand's above-mentioned article as a "reason" that libertarians are perceived as carrying water for corporatism

    According to libertarian anticorporatist analysis, big business is the chief beneficiary of government regulation. According to Rand's article, big business is the chief victim of government regulation. How is this disagreement not relevant?

    Incidentally, I talk quite a bit about the details, and the merits/demerits, of Rand's views re corporatism in the piece I linked to in footnote 14.

  • ||

    "According to libertarian anticorporatist analysis, big business is the chief beneficiary of government regulation. According to Rand's article, big business is the chief victim of government regulation."

    Of course, big business (like almost everyone) is both the victim of and the beneficiary of government intervention. But if anyone here is seriously arguing that corporations (who lobby for and often even draft the very regulations we are discussing) are more the victim than the beneficiary then I would argue that their perceptions of the current marketplace are skewed.

  • ||

    Mr. Long,

    I saw the footnote, but America's Persecuted Minority has a quote that undermines the entire mischaracterization of it!:

    All the evils, abuses, and iniquities, popularly ascribed to businessmen and to capitalism, were not caused by an unregulated economy or by a free market, but by government intervention into the economy. The giants of American industry-such as James Jerome Hill or Commodore Vanderbilt or Andrew Carnegie or J. P. Morgan-were self-made men who earned their fortunes by personal ability, by free trade on a free market. But there existed another kind of businessmen, the products of a mixed economy, the men with political pull, who made fortunes by means of special privileges granted to them by the government, such men as the Big Four of the Central Pacific Railroad. It was the political power behind their activities-the power of forced, unearned, economically unjustified privileges-that caused dislocations in the country's economy, hardships, depressions, and mounting public protests. But it was the free market and the free businessmen that took the blame.


    "America's Persecuted Minority: Big Business."

    When Ayn Rand writes about "America's Persecuted Minority", she is discussing and condemning the attitude that so many hold: that those who are wealthier and more successful must have somehow lied, cheated and stole their way to the top. She was decrying the "crab-bucket effect" of tearing the successful down.

    That article was in no way a defense of corporatism and no fair reading of it would find that it should be uplifted as such.

    Specifically, do you really believe "big business" is the primary beneficiary of antitrust regulation, which was one of the main topics of the essay?

    How does "big business" benefit from that regulation?

  • ||

    "Frankly, I'm beginning to suspect that the label "libertarian" is intellectually bankrupt. Anytime anyone defends the action of a business, some "left-libertarian" is going to point to the existence of some infrastructure and say "ah ha! The Merger of Big Business and Big Government!""

    I've long argued that the only real difference between left-libertarians and right-libertarians are what they spend their time bitching about.

  • ||

    Few of us here are happy with the system when large interests and government mutually benefit themselves at the expense of the little guy. Hell, I'm a sole proprietor competing against some of these guys. The crux is we just can't abide by the violation of liberty that would be required to stop it.

  • ||

    To extend further, there is almost a non-falsifiability problem with the left-libertarian analysis. If there's something that offends our sensibilities (i.e. Wal*Mart's wages), then lo and behold! we'll just directly attribute that to the fact that Wal*Mart more directly benefits from infrastructure! It's the merger of Big Business and Big Government that causes these low wages:

    "Don't worry, lefty friends, I'm really on YOUR side. Damn that evil Wal*Mart and it's rent-seeking ways!"

    And how is anyone going to prove you wrong about that? Like Fluffy said, there is such a mixture of business and state that isolating one factor (infrastructure) as the cause for something we reflexively don't like (low wages) is borderline dishonest.

  • ||

    I should say keeping government to a minimum would help, but that goes without saying around here.

  • Roderick T. Long||

    I saw the footnote

    But I'm not talking about the footnote, I'm talking about the article I link to in the footnote.

    America's Persecuted Minority has a quote that undermines the entire mischaracterization of it!

    I discuss precisely that quote in detail in the article I link to in the footnote. It's a perfect example of Rand's confusion on the subject.

    do you really believe "big business" is the primary beneficiary of antitrust regulation

    Yes, absolutely -- which is why big business lobbied so vigorously in favour of it. Antitrust law has always been applied selectively to help crony business by crushing their competitors. That's its purpose. (Rand described the process rather wll in Atlas.)

  • ||

    This is why, politically, libertarians are never going to get anywhere. Just imagine a libertarian was in the Presidential debates and was asked a question:

    "Q: What should be done about the price of gas?"

    "A: Well, we have to start with the fundamental problem of the government's overintrusion into the marketplace of transportation. Had we not so heavily subsidized roads 70 years ago, we would have free-market trains crisscrossing this great land of ours. The only reason the United States is so heavily dependent on petroleum is because of the subsidization of roads that continues to this day. The subsidization of roads is a direct subsidy to the automobile industry and an indirect subsidy to Big Business."

    "Q: Erm...yeah, but 100 million people own cars and rely on driving, so what the fuck do we do right at this moment"

    "A: ummm...."

  • Roderick T. Long||

    there is almost a non-falsifiability problem with the left-libertarian analysis

    Why does this apply to us but not to you -- given that Rand also claimed that the apparent problem with capitalism were caused by govt. intervention?

  • ||

    The 'objections' posted above seem to either be from those who didn't read or comprehend the article, or those who are just simply swinging ideological axes from the left and right.

    Bullshit. Long did not have to accuse libertarians of praising features of corporatism in order to make a well reasoned libertarian argument that corporatism is not libertarian.

    The question is not the ax I have to grind but what ax is Long grinding.

    I get to hear from the left all the time how my politics are shill for corporations I don't need to hear it from libertarians as well. Especially when that argument depends on Utopian notions of libertarianism...Yeah it would be great if Walmart had to compete for roads....but the Interstate is not going to become private anytime soon. I am sorry we do not live in a libertarian society and i am sorry that all we have to use is what Long calls corporatism examples when comparing relatively free markets to un-free ones, because true free markets do not exist.

    But the last people to blame for this is fellow libertarians.

    "in a perfect libertarian world we would not have big corporations and anyone who says other wise is vulger" is a bullshit argument and calling him on it does not mean i do not understand what he wrote and does not mean i am grinding a left and right ax.

  • ||

    TAO,

    Couldn't you argue the same thing about any libertarian analysis? This shit's all theoretical, but with a prexeological approach, we should be able to determine how such a society would function.

  • ||

    Antitrust law has always been applied selectively to help crony business by crushing their competitors.

    So what crony business egged the Government in its persecution of Microsoft? I'm aware of Google's involvement, but I really feel like the motivation behind that prosecution was way more populist than the machinations of behind-the-scenes actors.

    According the left-libertarian analysis, there are always behind-the-scenes businessmen manipulating the criminal justice and political systems to meet their own wily ends.

    Me? I say sometimes people are just jealous hicks who don't like seeing others succeed.

  • Roderick T. Long||

    Long did not have to accuse libertarians of praising features of corporatism

    Have you looked at Carson's list of examples? It's pretty long.

  • Roderick T. Long||

    I never said everything bad that govt. does is driven solely by big business. (That's Chomsky's view, not mine.) Like I said in the article, big business and big government sometimes jostle each other because each one wants to be the dominant partner. But they work together a lot more, on the average, than they fight.

  • Fluffy||

    If there's something that offends our sensibilities (i.e. Wal*Mart's wages), then lo and behold! we'll just directly attribute that to the fact that Wal*Mart more directly benefits from infrastructure!

    Sam Walton's original business plan was to place his stores along interstate highways in locations that allowed him to draw customers from several surrounding small towns.

    It's really beyond dispute that Wal-Mart was a creation of the interstate highway system. We don't have to wonder about Wal-Mart at all. Sam Walton knew what made his business possible. We can no more doubt Sam Walton was a beneficiary of state social engineering than we can doubt that Levitt or Ray Kroc was.

    Erm...yeah, but 100 million people own cars and rely on driving, so what the fuck do we do right at this moment

    That's a dishonest question. The answer is: Having completely fucked up our transportation system and land-use nationwide, you don't get to demand that libertarianism produce a solution for you, and it's not an argument about liberty if it can't. You're arguing like an Ayn Rand villain.

  • Jesse Walker||

    So what crony business egged the Government in its persecution of Microsoft?

    Sun.

  • ||

    Carson's very first example is the exact kind of "non-falsifiability" I am talking about. Taco Bell offers low wages, and this is bad, ergo, there must be something anti-libertarian and pro-corporatist in there somewhere.

    The reason that Third-World countries' labor options suck is because they have corrupt governments that do not enforce individual property rights...and one can safely say it's because a Western-style Enlightenment has not arrived or developed there yet.

    We can no more doubt Sam Walton was a beneficiary of state social engineering than we can doubt that Levitt or Ray Kroc was.

    A beneficiary? Perhaps indirectly, but my point is that (assuming that what you're saying is true), that would make it OK to file Wal*Mart under "Unintended consequences of the road system", not "the original intent of the Interstate Highway System because Wal*Mart a priori recognized what it could do".

    You could argue that Big Business is a beneficiary of military protection, because, hey, they got more shit to protect than poor people.

    Having completely fucked up our transportation system and land-use nationwide, you don't get to demand that libertarianism produce a solution for you

    Bzzt. The proper libertarian response needs to be "privatization of the road system". It is entirely irrelevant to 99% of the body politic how the road system evolved. The question is, how do we make it freer than it was?

  • ||

    "You could argue that Big Business is a beneficiary of military protection, because, hey, they got more shit to protect than poor people."

    This would actually be a valid point.

  • ||

    left-libertarian analysis

    I am confused about this term..if a left-libertarian believes that a true free market will displace all big corporations with small ones does that mean i am a right-libertarian for not knowing (or caring) what size of the resulting corporations will be?

    What do you call libertarians who just don't like 700 billion dollar bailouts?

  • ||

    Claiming that "but-for government subsidies in the form of regulation and infrastructure, big business would not exist" completely disregards the notion of "economies of scale".

  • ||

    So what crony business egged the Government in its persecution of Microsoft?

    And Oracle.

  • ||

    "I am confused about this term..if a left-libertarian believes that a true free market will displace all big corporations with small ones does that mean i am a right-libertarian for not knowing (or caring) what size of the resulting corporations will be?"

    No. A left-libertarian is simply one who sees libertarianism as a logical extension of what has traditionally been seen as the "left" politically (before socialism co-opted the term). Murray Rothbard wrote about this frequently.

  • ||

    Sam Walton's original business plan was to place his stores along interstate highways in locations that allowed him to draw customers from several surrounding small towns.

    I guess I should ask this more clearly (because I realize I wasn't clear before), but do you believe that:

    A) Roads were built with the best intentions in mind "for the people", and taking advantage of those government subsidies is a side-effect (called unintended consequences) OR

    B) Big business manipulated the United States government the body politic to dump billions of dollars into the road system?

  • ||

    TAO-

    Look at the construction of the trans continental railroads as an example of state intervention favoring both bigger corporations and business cronies of those in power. Of course, James J. Hill gave us the counter-point that is not taught in the government schools.

  • ||

    Math is used to explain empirical phenomena for sure. But what was referenced above is deducing a law of human behavior or an explanation of a social phenomena from a priori principles.

    Many people when they talk about the effect of minimum wage laws will say "given that people are self interested and rational and given that self interested rational people will buy less of something when it is more expensive and given labor is something to buy therefore when the minimum wage is raised there will always be a drop in employment."

    It strikes me that someone who took this as establishing this as a fact is out there on a limb. The only way to know if minimum wage laws result in lower employment is to go back and look at employment rates when it is raised (of course figuring for many other factors).

    So when someone says that government interference results in inefficiency arguing solely on "a priori" principles, that strikes me as a risky argument to accept.

  • ||

    Well TAO, of course you're a right leaning libertarian. Shit, I could have told you that before you started all this blah blah blah :)

  • ||

    "I guess I should ask this more clearly (because I realize I wasn't clear before), but do you believe that:

    A) Roads were built with the best intentions in mind "for the people", and taking advantage of those government subsidies is a side-effect (called unintended consequences) OR

    B) Big business manipulated the United States government the body politic to dump billions of dollars into the road system?"

    I'm not sure the differentiation matters. You seem to be caught up in the idea that people are "blaming" big business for big government. That's not exactly the case. Whatever the motivation, big business has benefited (disproportionally) from government intervention.

  • Fluffy||

    Claiming that "but-for government subsidies in the form of regulation and infrastructure, big business would not exist" completely disregards the notion of "economies of scale".

    This is very true.

    It's particularly true of commodity businesses.

    I would definitely not be someone who would say that all big businesses are the result of state intervention and manipulation.

    The point is that some of them are.

    And the point is that many libertarians tend to greet critiques of certain features of American life with the all-purpose response, "Well, the free market produced these things, and they reflect the preferences of the public," and that response isn't true if the item under consideration wasn't actually the result of the free market.

    Virtually every aspect of the consumer society and suburban American life bears the marks of a century of state social engineering. But libertarians identify the products of that society with the market, and reflexively leap to their defense when they are attacked. And we shouldn't.

  • ||

    TAO-6:20

    As Marvin Dorfler, Josh Ashton's character in Midnight Run, asked the flight reservationist in a scene at the Las Vegas airport in response to her question as to whether he would prefer smoking or non-smoking, "take a wild F..............ing guess."

  • ||

    Claiming that "but-for government subsidies in the form of regulation and infrastructure, big business would not exist" completely disregards the notion of "economies of scale".

    good point...but i also wonder why we should care at all what size a corporation is so long as it does not get special treatment or protection from competition from government.

    I fail to see why a "Big Corporation" could not survive so long as it competed. I also really fail to understand why a "big Corporation" is such a horrible thing.

    It is almost as if Long wants to say "OK if we get medium corporations rather then small ones then libertarianism is a failure and the government should get in there to make those big meanies small."

    Since when was the size of a corporation our concern?

  • Fluffy||

    A) Roads were built with the best intentions in mind "for the people", and taking advantage of those government subsidies is a side-effect (called unintended consequences) OR

    B) Big business manipulated the United States government the body politic to dump billions of dollars into the road system?


    Some people were motivated by A and some people were motivated by B.

    The Big 3 absolutely lobbied for the interstate highway system. And real estate developers nationwide did too.

    I may be biased in my perception by the fact that I grew up on Long Island, where real estate interests were totally in the driver's seat for transportation policy decisions in the mid-20th century, via their creature Robert Moses. A more clear example of the state intervening in a massive way to benefit particular interests, and that intervention fixing the parameters of life for millions of people for decades to come, would be hard to come by.

  • ||

    Watch this as I, the magic libertarian, solve all of the Left's big grievances with One. Fell. Swoop!:

    "Globalization and the exploitation of Third-World Workers: The United States Government and its Big Business cronies helped propel Taco Bell to levels of power that libertarianism never would have allowed for. This is directly attributable to the fact that Taco Bell's grandfather corporation was part of the landed gentry and that the United States subsidizes Taco Bell with infrastructure and regulation! Voila!"

    "Pollution: Government and Big Business collude to prevent the penalization of negative externalities! Go libertarian, my lefty friends! Oh yes, and the car is the biggest polluter around, and guess who conspired to vault it into prominence?"

    "Low Wages? It's the Government and Big Business's fault, for encouraging the subsidization of infrastruture! Wal*Mart wouldn't be 'exploiting' Grandma were it not for the USG's tight relationship and Big Business's conspiracies!"

    I mean, does this end at some point?

  • ||

    TAO-

    Decentralization. Down size. Small is beautiful.

  • ||

    Virtually every aspect of the consumer society and suburban American life bears the marks of a century of state social engineering.

    See? Non-falsifiable, but it will get you mad artistic cred. "Were it not for Big Recording Industry's machinations, we'd never have Britney Spears".

  • ||

    Decentralization. Down size. Small is beautiful.

    No problem, but it's not going to happen until the jealous and irrational in this country are disabused of the notion that "profit = evil".

  • ||

    Look at bank fees. In a purely free market, any bank that charged a fee for overdrafts, telephone inquiries or incoming wires, would go the way of Rico Suave. The only reason that banks can get away with this crap is because the state allows it. Guess who has the ear of the state?

  • ||

    But libertarians identify the products of that society with the market, and reflexively leap to their defense when they are attacked. And we shouldn't.

    OK, next time someone opens their mouth about "Big Oil and its manipulative scheme for profit" are you going to

    A) Defend their right to make profit and point out all the good that ExxonMobil does in this world or
    B) Go right along with them because at some point, ExxonMobil's corporate personhood benefited from government largesse at some point?

  • ||

    TAO-

    Yes. No quarrel on your last point. Profit is good. Profit obtained by state intervention favoring one over another is not so good.

  • ||

    looks like libertymike answered my question.

    libertymike - do we get to defend a bank's business practices at all...ever? Or is it going to be this constant refrain of "Bad thing X (in this case, fees) wouldn't happen were it not for Regulation Y and the government's deference to Big Bank!"?

  • ||

    TAO-

    What do you think of Kinsella's points?

  • ||

    I think they're excellent. Thanks for pointing them out to me.

    I feel like part of this is that some libertarians have a yen to be relevant. Usually, we're the lone voice going "Hey! Exxon's profits are OK! Leave them alone!" while the rest of the world is getting out the pitchforks and torches 'cause, hey, Exxon's just got too much money.

    Now libertarians can do this "me too" stuff and go right along with the mob.

  • ||

    TAO-

    Sure, I could defend an individual bank's business practices. A bank that does not charge any fees for overdrafts, telephone inquiries, incoming wires, cashing a check made payable to a non-depositor, bank checks and the like is a bank whose policies I would praise. Since almost all banks charge fees for such things, I do not have a problem with making the general criticism that banks benefit from state intervention that permits the aforsaid fee charging.

  • ||

    I may be biased in my perception by the fact that I grew up on Long Island, where real estate interests were totally in the driver's seat for transportation policy decisions in the mid-20th century, via their creature Robert Moses. A more clear example of the state intervening in a massive way to benefit particular interests, and that intervention fixing the parameters of life for millions of people for decades to come, would be hard to come by.

    So the American Planners Association is a secret organization of libertarians set out to fix all the injustices propagated upon us by the auto industry and land developers?

    Joe is a libertarian!!!

  • ||

    TAO-

    You know the anarcho individualists like me would not let the mob run amok.

  • ||

    So, because it's something you don't like, it MUST come from state intervention?

    shit, man, no one likes bank fees. No one likes paying their bills. But just because a thing sucks on an emotional level does not mean it must necessarily come from the merger of Big Government and Big State.

    Since almost all banks charge fees for such things, I do not have a problem with making the general criticism that banks benefit from state intervention that permits the aforsaid fee charging.

    So....all of them do it...and instead of thinking "hey, this is just the way that the banking business is", you say "hey, there must be STATE INTERVENTION here".

    Start your own bank and don't charge fees for these things. There must be a huge market for a service like that.

  • ||

    TAO-

    There is nothing wrong with making money and better yet, making big money. However, I do have a hierarchial ranking of my own when it comes to the accumulation of wealth. The highest level is occupied by those who made it in offering goods or services to businesses and consumers where such goods and services are not offered because the government requires them. In other words, no rent seeker could ever occupy my pantheon of wealth accumulators.

  • economist||

    I'm all for ending the special privileges that many corporations enjoy. Then we can see how they fare without the privileges. I would go so far as to say that this should come before any reduction of the welfare state. The problem is that if libertarians embrace leftists as fellow-travelers, the leftists will use it to impose heavy taxes and new regulations, and will justify it by pointing out the advantages that some corporations enjoy due to government privilege, rather than eliminate those privileges. What matters to 3/4 of the left is creating more government control, not less.

  • ||

    "OK, next time someone opens their mouth about "Big Oil and its manipulative scheme for profit" are you going to

    A) Defend their right to make profit and point out all the good that ExxonMobil does in this world or
    B) Go right along with them because at some point, ExxonMobil's corporate personhood benefited from government largesse at some point?"

    So is the libertarian be like the kid at the playground who, after stealing the game ball and is then chased by the others, suddenly declares "stealing is wrong, no more stealing?"

    There should be no attempt to right the imbalances created by government intervention in the first place?

  • economist||

    TAO,
    In a way, joe was right about the "one-drop fallacy". The difference is that it's used more by left-libertarians, whose view of an ideal society leans more towards what the left supports, and they want to think that all the things they don't like would go away if the government were minimized/eliminated. I myself understand that many things I don't like would still exist in a libertarian society.

  • Charles||

    TAO and joshua corning,

    I'm not clear on why you're getting so upset about this. It seems to me that the argument Long is making is:

    government regulations have favored some big businesses (obviously true),

    that I don't like (a value judgment you can't really disprove),

    smaller corporations would result with less government intervention (probably true in some cases),

    and this would be a good thing for a variety of mostly aesthetic and cultural reasons (a value judgment that can't really be disproven).

    I fail to see what the huge terrible deal about this is.

  • ||

    There should be no attempt to right the imbalances created by government intervention in the first place?

    That's such massive collectivism, I don't know where to start.

    If the regulations that currently exist spring out of 70 or 80-year-old regulation, you're going to penalize ExxonMobil for that?

    Frankly, that sounds like the same rationale for slavery reparations.

    And what would that look like, MNG? You'd just tax the hell out of ExxonMobil for something they didn't do and didn't create and do...what with the money, exactly?

  • ||

    I'm not down on corporations. I see them as just these nexuses of contract agreements where people invest capital which is then governed by others (management) (with liability then limited to the amount invested) who have a duty to maximize return. I always think it's funny when leftist buddies of mine say "but those corporations, all they think of is profit." Well, no shit. They have a duty to their shareholders to think "only" of that*.

    *Of course ones that break the law to maximize that return are who make decisions contrary to their holders actual interests (the whole agent-principal stuff) are doing wrong, duh.

    N

  • ||

    TAO-

    No. Please. My comments on the banking fees are predicated upon the reality that the banking industry has lobbied to get these fees either enacted into law or approved by the courts. Take finger printing of one, not being a depositor, who seeks to have a check cashed drawn on another's account at a subject bank. Should the person who seeks to have the check cashed have to submit his fingerprints in order to get the check cashed? If you answered in the negative, you would be wrong as there have been several decisons permitting BANK OF AMERICA to do just that.

  • economist||

    CED,
    It's amazing how every time the government sets out to fix something it originally broke, it ends up making it worse. Let's look at the Great Depression, or perhaps U.S. foreign policy for the last century.

  • ||

    TAO

    You just answered me with a question of your own.

    But why shouldn't the government be used to balance out past uses by the government that have created imbalances?

  • ||

    I mean, isn't it a bit retarded to let the kid keep the ball because, well, "stealing" is wrong?

  • Geotpf||

    In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles.

    Bullshit.

    There are a lot of services where a monopoly, or maybe a duopoly or the like, would be the natural outcome without government regulation, and in those cases, prices are higher, wages are lower, and the product is inferior than when there is competition. Anti-trust laws exist for a reason.

  • economist||

    libertymike,
    So are those things permitted by law, or required by law? There's a big difference between the two.

  • economist||

    The Vatican Law cannot be changed, so sayeth the spider.

  • ||

    It is very hard to figure out who benefited how much from what and try to equalize all that.

    But you can address the overall conditions that created and sustain the imbalances.

    This will of course reward some people who don't deserve to be rewarded (people who are at the low end of the imbalance because of their own poor mistakes) and penalize some who don't deserve to be rewarded (the largely mythological self made men of Rand's feverish imagination). But doing nothing will of course have the same effect, it just ratifies the past interventions...

  • ||

    But why shouldn't the government be used to balance out past uses by the government that have created imbalances?

    Again, MNG: From whom would the money be taken, to whom and to what would it be given, and, given that none of the individuals involved in this were responsible for the current state of affairs, does that sound like justice to you?

    For example: Long cites United Fruit as a beneficiary of Big Government. I'll admit that's true...but now what? You want to penalize Chiquita Banana and all the people that work for that company because of shit that happened almost 60 years ago?

  • ||

    the largely mythological self made men of Rand's feverish imagination

    You know, I don't even know why I bother trying to have a serious conversation with you.

  • Roderick T. Long||

    Claiming that "but-for government subsidies in the form of regulation and infrastructure, big business would not exist" completely disregards the notion of "economies of scale".

    In my article I talk about both economies of scale and diseconomies of scale, and how current laws enable big business to take advantage of the former while socializing the latter.

    Perhaps indirectly, but my point is that (assuming that what you're saying is true), that would make it OK to file Wal*Mart under "Unintended consequences of the road system", not "the original intent of the Interstate Highway System because Wal*Mart a priori recognized what it could do".

    Certainly many corporations have lobbied for special privileges. But in any case, so long as such privileges do in fact exist,w ho cares whether business intentionally lobbied for them or just ended up with them by sheer luck The effects are the same, and the injustice is the same.

  • ||

    TAO-

    BOA also charges $6.00 for a non-depositor to cash a check. You have missed a broader point-namely, that the banks would not be able to survive in a brutally free competitive marketplace if they charged such fees. You are not addressing the underlying economics of the matter. The banks do not "lose money" when a check is overdrawn or if you happen to make a telephone inquiry concerning one of your accounts. Banks charge these fees becasue the state permits them to do so-not because the marketplace permits them to do so.

    Moreover, your suggestion to start a bank that would not charge any such fees only underscores the position of many of the posters. There are literally thousands of regulations that serve as a tremendous, UNNATURAL barrier to entry. Why should one have to navigate around, between and through these regulations, at the cost of millions of dollars, just to go into the banking business?

  • ||

    "There are a lot of services where a monopoly, or maybe a duopoly or the like, would be the natural outcome without government regulation, and in those cases, prices are higher, wages are lower, and the product is inferior than when there is competition. Anti-trust laws exist for a reason."

    I agree.

    Let me give you a strange example. Pro wrestling. There were lots of little wrestling organizations back in the day. The WWF (WWE) had a brilliant business model of using the relatively new media of cable TV and it also broke these old strange old boy agreements of organizations to not compete with each other on each other's turf. Eventually it gained such an advantage over other organizations that it could lock most noted names in wrestling into long term contracts or if any smaller org developed a new name they could easily match and better any salary to that person. They existed without any competition for years.

    Ted Turner came along and dumped a ton of money into competition with the WWE and for a while there really was good competition. But it was artificially maintained (Turner used money from other areas of his empire to make things competitive, he actually went into the business not so much to make money but b/c he was pissed at the WWE owner for not selling him a controlling interest). When Turner sold out to Time-Warner they cut this shit out and boom, you had only one organization again. It's been years and years and still no real competition, and now the product of pro wrestling is pretty much what the family that owns the business wants it to be.

  • Roderick T. Long||

    A) Defend their right to make profit and point out all the good that ExxonMobil does in this world or
    B) Go right along with them because at some point, ExxonMobil's corporate personhood benefited from government largesse at some point?


    So my choices are either a) defend the results of fascism, or b) cheer for the proponents of socialism? No thanks.

  • ||

    libertymike - I'm not saying there isn't grave injustice in a lot of regulation, but why should a small business have to compete with Wal*Mart when Wal*Mart has a built-in advantage in terms of the infrastructure system?

    What's the solution? Tear up the roads?

    Banks charge these fees becasue the state permits them to do so

    Permits them? Or mandates that they do? Now I'm confused, libertymike...the State permits them to charge fees...so that somehow means that the banks are benefiting? How does that follow?

    The State permits me to smoke and drink...doesn't mean I should do it.

  • ||

    TAO-My answer is in my 7:05 post, I imagine we cross posted

    And I'm sorry I don't believe the self-made man mythology. I just don't. Most wealthy people simply are and were not, and even those who can claim this, many you cite, used government rent seeking on the way up and to keep themselves up there when they got there.

  • Roderick T. Long||

    Anti-trust laws exist for a reason.

    They sure do. That's why big business demanded them in the first place. Read Childs on this:

    http://praxeology.net/RC-BRS.htm

  • ||

    So my choices are either a) defend the results of fascism, or b) cheer for the proponents of socialism? No thanks.

    Alright, Mr. Long, what would YOUR response to be to "Damn those evil oil companies and all their profit!"?

    I mean, if you think the airheaded lefties with whom you just happen to agree share your dedication to intellectualism and have the same intent as you...

  • economist||

    "This will of course reward some who do not deserve to be rewarded...and penalize those who do not deserve to be punished"
    You see, MNG, that's pretty much the end of the conversation for me. Either find and punish the individuals responsible, and leave alone those who did not push for the system, or give up on it. All justice is properly individual justice, protestations of the left aside.

  • ||

    Most wealthy people...used government rent seeking on the way up and to keep themselves up there when they got there.

    Don't mouth that *bullshit* at me, MNG. You don't just get to say the *magic words* of "government rent-seeking" and think I'm going to bob my head up and down and agree with you like a drooling moron.

    You want to expand government MORE and give even more opportunities for rent-seeking, so don't come at me like that.

  • ||

    economist-

    See my point at 7:11.

    No, the law does not require BOA to fingerprint those non-depositors who seek to cash a check. The law just supports BOA's policy. Just try and sue them.

    However, the law does require that every bank obtain the social security number of any person who opens up a new account. The law also requires banks to hand over to the IRS and state departments of revenue that amount of money the IRS or state taxing authority claims is due them pursuant to a notice of levy. What doe the banks do? Do you think that they go to bat for you against the IRS? They just freeze your account and give the money to the parasites.

  • ||

    Don't worry, economist, it'll just happen to be some bad ol' rich "individuals", anyway...they're worthwhile collateral damage in the War for Fairness.

  • economist||

    Roderick T. Long,
    You have some good points here. However, for the reasons I pointed out in my 6:52 post, the left is, at best, a wildcard on most issues of importance to libertarians, especially in the economic realm.

  • ||

    MNG-

    Are you also CED? Whither consistency in thy handle?

  • ||

    "does that sound like justice to you"

    It's funny that often libertarians reply to liberals, when we point out we would like to help smooth over imbalances created by, say, the fact that some people are born with disablities, or that they age and their capacities falter as they do, or they don't have parents that love them, etc. with "well life ain't fair." But if we are talking about taking from more "fortunate" folks to help these less fortunate they suddenly think fairness is really important too. Go figure.

    See TAO, the liberal thinks that the advantage that one man might get over another b/c of the use physical strength is unfair, but so is the advantage that one man gets over another b/c he happened to be born without the disability of the latter or into a family that nurtured him more, and ESPECIALLY if he happened to be born into a family with more $$$ (and double especially if that $$$ was gotten through rent seeking or simply imbalanced bargaining power because yet a further ancestor happened to have a lot of dough).

    And I hate to break this to you, but a majority of people over space and time (historically and geographically) have this wider view of fairness that does not stop at physical coercion.

  • ||

    libetymike - what should BoA do? Throw itself in front of Juggernaut?

    This is the government people want...so we blame the businesses that cooperate?

  • ||

    libertymike

    One night in a long thread debating with BDB and joe I made a wager, inspired by the fact that I lived there for 20+ years of my life, that Virginia would not go for Obama. I said that if it did I would post as "Crow Eating Dumbass" for the next month. Well, he won and I'm manning up (the whole thing is long to type so I usually post first with the whole thing and then go with CED downthread).

    I'm pleasantly shocked Obama carried VA (partly because I don't like when one party wins an area for decades, partly because of what it says about the improvement of race relations in my old stomping grounds, and yes partly because I favored Obama), but I'm still shocked.

  • economist||

    libertymike,
    Not deciding in favor of a plaintiff in a lawsuit over something doesn't count as "support of the law" for a particular price. That would be like saying that because the state refuses to penalize a retailer for price-gouging, that it is equivalent to the state mandating the practice.
    As for the machinations of the IRS, I would suggest that since they're the ones with the government (and therefore massive force) behind them, you should direct your indignation at them, rather than at the banks. Note that I definitely don't love banks, but I also think people should be careful about where they assign blame.

  • ||

    but so is the advantage that one man gets over another b/c he happened to be born without the disability of the latter or into a family that nurtured him more

    So...seize the healthy person's income and give it to the handicapped person...whose situation he had no influence over!

  • economist||

    CED,
    There's a difference between some things just being unfair by chance, and using force to impose something that's not fair.

  • ||

    TAO-

    Do you see any banks advocating an end to the income tax? An end to bailouts for banks? An abolition of the IRS? An abolition of the federal reserve? Of fiat money?

    When was the last time a bank advocated intra-national currency competition?

  • ||

    See, MNG, you "fairness" involves seizure of assets to ameliorate problems that were not the fault of the one who is having his stuff seized.

    OTOH, when the libertarian is talking about "justice", he's talking about refraining from using force to seize income from those who aren't responsible.

    We're moral. You're a monster.

  • economist||

    And, CED, I'm pretty sure at some point you learned that appeals to popularity are a logical fallacy, right?

  • ||

    libertymike - do you see hardly ANYBODY advocating that?

  • ||

    "or give up on it."

    The people who won the first round of stealing, like the kid I noted above, will be happy with that economist.

    "You want to expand government MORE and give even more opportunities for rent-seeking, so don't come at me like that."

    I don't think every government interference is bad, no, but I'm not sure I want more government per se. I do want government to redress some of the shit it already did.

  • ||

    you want government to redress it...by punishing people who weren't responsible and giving the "spoils" to those who weren't harmed.

    Amazing. You have a really, really messed up sense of justice.

  • economist||

    libertymike,
    Some banks are refusing bailout money. Despite the fact that this will get them screwed over compared to the banks that take it. As for the other things, banks are profit-making entities, not political activists. Some banks and bank executives probably do lobby for special privileges. And other banks and executives support organizations that advocate the policies you support.

  • ||

    "Oh goody! I hope I can get some of the taxes back that the Government took from my grandfather to help out United Fruit. It doesn't matter that my grandfather is dead and United Fruit doesn't exist any more...we have to redress this injustice!

    Oh yeah, and I want to give Manhattan back to the Indians and 40 acres and a mule to all black people."

  • ||

    Economist-7:27

    That is a very good way of phrasing that phenomenon. Naturally, I'm with you and TAO on that. MNG and I do not agree-although I find MNG to be sincere.

  • economist||

    CED,
    This would be more like a situation where there's multiple kids with a balls, and there's multiple kids without. And you would say "Okay, everyone with a ball must hand it over to the kids without". Even if a significant number brought their own. I would rather have the kid who stole the ball get away with it, than steal a ball from somebody who has a right to it.

  • economist||

    libertymike,
    I've no doubt MNG is sincere. Why not be sincere on a blog? It's not is if (in most cases) anyone can find out who you are.

  • ||

    CED,

    "When Turner sold out to Time-Warner they cut this shit out and boom, you had only one organization again. It's been years and years and still no real competition, and now the product of pro wrestling is pretty much what the family that owns the business wants it to be."

    As opposed to real competition? And WCW and WWF weren't the only games in town at the time. The ECW was around as well. Let's not forget the many independent wrestling circuits that thrive and flourish. You say that "there is only one organization again." But is this actually the case? What do you think many pro wrestlers in the WWE were doing before they got their big breaks?

  • ||

    economist - even better: my great-grandfather stole your great-grandfather's ball, so I have to buy YOU a house.

  • economist||

    AO,
    Bad example. Some people actually support those things.

  • ||

    economist-Of course such appeals don't prove anything, but I should think libertarians need to account for why most people don't have the restricted view of what is "fair" that they think is so self-evident...

    "We're moral. You're a monster."

    I imagine that helps you sleep better at night or something, but I'm not sure what else it buys you.

    Here's an old example of mine: TAO, economist and fluffy are stranded on an island. TAO takes up hunting wild boar, economist takes up spear fishing and fluffy takes up bird hunting. At the end of a week or two TAO had done great and has enough boar meat to feed himself for months (let's stipulate that he killed every boar on the island for the sake of the hypo). economist has only been able to muster a bare substinence for himself. fluffy was, through no fault of effort or brains, unable to kill any birds and is starving. If he does not get food soon he dies. TAO declares that his food is his and tuff. economist and fluffy overpower him and fluffy takes enough to save himself.

    Well, there you got some force and a violation of property. But I bet most people would say that only a moral monster would think this was the improper outcome and that the magical property rights of TAO should have been respected.

    And now this was an example of a person simply making a wrong choice, we don't even have any accidents of birth or history or rent seeking in the past I could have thrown in.

    Coercion is not the starting or ending point of what is right or fair for most folks.

  • ||

    TAO-7:29

    Yeah, me. It would be supercalifrigalisticexpialidocious, if not terrafantasplendelicious (I made up this word in 1983 to describe this girl that I had dated twice).

  • ||

    "by punishing people who weren't responsible and giving the "spoils" to those who weren't harmed."

    By taking spoils from those who have benefited from the unfair taking of spoils down the line and giving to those who are disadvantaged by said previous unfair takings.

    Yeah, I do.

  • economist||

    I have yet to find the people who took my ancestors' homes and farms, and yet to determine whether any part of their estate derives from it. So, naturally, I'm advocating that all white people in Georgia pay a special tax to Cherokee Indians, in compensation for stolen land. Because it would just make me feel so much better.

  • ||

    Shorter MNG:

    "Property rights matter ---- until we say otherwise and the hungry mob takes you down by force!"

    Thanks, MNG. We all knew that about you already. And, by the way, I'm a pretty destitute student and you're a well-off Ph.D....but it's not my fault that I'm this way! Maybe I'll buy a gun and come around to your house and take some stuff tonight.

    That would be WAY just.

  • economist||

    Damn, I went off on a rant again.

  • ||

    By taking spoils from those who have benefited from the unfair taking of spoils down the line and giving to those who are disadvantaged by said previous unfair takings.

    Again, MNG, how is it MY debt to pay for what my ancestors did?

    You know what? This conversation is over. You'll never be convinced...collectivism is your faith.

  • economist||

    AO,
    Nothing that leftists advocate actually applies to them. Look at the Kennedies for examples. Yes, tasteless, I know, but true.

  • economist||

    Even more salient: Why is it my debt what someone else's ancestors did?

  • ||

    "This would be more like a situation where there's multiple kids with a balls, and there's multiple kids without. And you would say "Okay, everyone with a ball must hand it over to the kids without". Even if a significant number brought their own."

    At my kids daycare when one kid brings something for show and tell and other kids did not they actually do make the former share with the latter. Yeah, most people think fairness demands this actually.

    "I would rather have the kid who stole the ball get away with it, than steal a ball from somebody who has a right to it."

    What gives them this right to it? That they have it? I mean, if I take it I have it.

    I'm guessing you'll say if they got it "voluntarily." But my point is that if they got it b/c their fathers had rent seeking agreements, or took the ball from the other kids father by force, or yes was just smarter than the other kids father and thus found or made the ball, then I'm not sure why he has some magical "right" to the ball at all...

  • economist||

    I just hope no Confederate apologists show up on this thread...

  • ||

    unfortunately, economist, this is how people like MNG view their fellow humans: twisted, irrational creatures who are nothing but victims to circumstance. It's not THEIR fault THEY turned out the way they did...but look over there! Some people succeeded! It must be the wealthy's fault....they did it! Let's take their stuff.

  • economist||

    "At my kid's daycare..."
    Really? Wow, that would piss me off. Mostly because little kids seem to have an amazing habit of breaking everything they get their little paws on. Especially if it's not theirs.

  • ||

    See, economist? If I'm ahead, it couldn't be because of something I did...it must have been purely fortunate circumstance that placed me as as the Rich White Son of Privilege! (note: I am neither rich nor privileged)...it's my rent-seeking father's fault (maybe!)...best to take my money (just in case!) and give it to someone (who didn't even get his stuff taken!).

  • ||

    Economist-7:35

    Good point. I'm glad that you qualified your comment about being identified as, IMHO, I don't think it would be that difficult for folks like Elemenope, Joe and others who live in Rhode Island or Massachusetts to match my handle (Michael is my real name) to my voice on the radio (I am a frequent caller to WEEI, WRKO and WBZ in Boston).

  • economist||

    I can already tell this thread's going downhill. When we start using schoolyard examples, you know we're screwed.

  • ||

    "Again, MNG, how is it MY debt to pay for what my ancestors did?"

    Because you benefited from it. That's really all there is to it. If you stole my necklace and gave it to your girlfriend and the police took it back from her your gal can say she's not responsible for what you did, why are taking my the necklace?

    And I'm not sure what is gained by you huffing "well you're just a collectivist I'm leaving" since the majority of your fellow citizens disagree with you and agree with me and in a democracy I should think you'd be focused on convincing that majority. Libertarianism is only going to advance by convincing folks whom you may think are collectivists...

  • ||

    Actually, I bet that Joe has heard me go at Gerry Callahan.

  • ||

    At my kids daycare when one kid brings something for show and tell and other kids did not they actually do make the former share with the latter.

    What a great lesson...share things with people, even if they hate you! Even if they push you down when the teacher isn't looking...you have nicer stuff, so share with the little snot who calls your names.

  • economist||

    What a beautiful day to spend away fightin' round the world!

  • ||

    "When we start using schoolyard examples, you know we're screwed."

    Hey, I used a deserted island one too, what else can I do ;)

  • ||

    TAO and joshua corning,

    I'm not clear on why you're getting so upset about this. It seems to me that the argument Long is making is:

    government regulations have favored some big businesses (obviously true),

    that I don't like (a value judgment you can't really disprove),

    smaller corporations would result with less government intervention (probably true in some cases),

    and this would be a good thing for a variety of mostly aesthetic and cultural reasons (a value judgment that can't really be disproven).

    I fail to see what the huge terrible deal about this is.


    After actually going back and reading the whole article rather then ranting about the small parts posted here at reason I am less annoyed. That being said I still do not like how Long framed his argument as a critique of libertarians acting like corporatists.

    I can appreciate the desire to have libertarians say more often "do not conflate capitalism with free markets", but I did not need a slap in the face to pick up that point.

  • economist||

    CED,
    You would actually have to prove a specific thing he inherited from his ancestors was stolen.

  • ||

    "If I'm ahead, it couldn't be because of something I did...it must have been purely fortunate circumstance that placed me as as the Rich White Son of Privilege! (note: I am neither rich nor privileged)...it's my rent-seeking father's fault (maybe!)...best to take my money (just in case!) and give it to someone (who didn't even get his stuff taken!)."

    You know, there's a famous quote about how folks who have benefited from some advantage are always the one's who deny it the most, but I don't have time to look it up...

  • ||

    And I'm not sure what is gained by you huffing "well you're just a collectivist I'm leaving"

    There's nothing to be gained in this conversation with you, MNG. You have a messed-up sense of collectivist justice...somewhere, somehow, SOMEBODY got an unfair advantage and it doesn't matter who gets in the way, we have to correct it....somehow! Even if it means punishing the wrong people and giving to the undeserving!

  • economist||

    I don't like deserted island examples, either.

  • ||

    Let's say for the sake of argument, MNG, that you are fifty years old. Does it necessarily follow that, because my fifty-year-old father is not a Ph. D. and you are, that you owe him something?

    Would it follow if we proved that your 100-years-back ancestor (just one of them!) screwed over my father's 100-year-ancestor?

    Better pay up...I'm going digging.

  • ||

    "What a great lesson...share things with people, even if they hate you! Even if they push you down when the teacher isn't looking...you have nicer stuff, so share with the little snot who calls your names."


    Uhh, whoa TAO, I don't know what daycare you went to, but most of my kids cohort plays nicely with each other. And you say I see people as twisted?

    You might want to talk to a counselor about whatever issues you got from your dark daycare days...Nathaniel Branden perhaps?

  • economist||

    Connections of government interventions and subsequent interventions to "remedy" the consequences.
    World War I
    to
    World War II
    to
    Cold War
    to
    The "War on Terror"

  • economist||

    Well, CED, I remember going to school with a bunch of little snots who acted the way AO describes. Of course, you wouldn't see it, since children are also little brown-nosers around adults.

  • ||

    CED - psychologizing is the last bastion of the asshole.

    There's nothing wrong with me. There is something wrong with forcing a child to play with other children whom he might not even like. Let him pick his friends.

  • economist||

    One might draw the conclusion from my posts that I hate children.

    And this thread has degenerated to the point where I must transform into Lord Xenu XXV!

  • Lord Xenu XXV||

    Lord Xenu XXV demands the fealty of Earth!

  • ||

    Certainly many corporations have lobbied for special privileges. But in any case, so long as such privileges do in fact exist,w ho cares whether business intentionally lobbied for them or just ended up with them by sheer luck The effects are the same, and the injustice is the same.

    injustice.

    I thought we were talking about economic efficiency?

    What kind of Justice are we talking about here?

    Left wing nuttery economic justice that decides outcomes or 14th amendment libertarianish everyone is equal under the law justice?

  • Lord Xenu XXV||

    Lord Xenu XXV would also like to point out that the Scientologist version of history is completely off. The souls trapped on earth only were put here because they were galactic terrorists.

  • Lord Xenu XXV||

    LORD XENU XXV DEMANDS SATISFACTION!

  • Lord Xenu XXV||

    Lord Xenu XXV has put this thread out of its misery!

  • ||

    Lord Xenu XXV has put this thread out of its misery!

    there was a 400+ thread last week and that one had way less merit then this one.

  • ||

    http://www.reason.com/blog/show/129990.html

    Here it is....i think it was about the end of racism or history or the world or something...

    Pretty boring stuff if you ask me.

  • economist||

    joshua corning,
    I know about that thread. I don't think it merited 400+ comments, either.

  • ||

    Although i found this to be Epic

    ed | November 8, 2008, 9:54am | #
    Isn't there anyway to block that damn bot?

    Libertarianism is a big tent, Miggs.
    Bots, trannies, fisters, dog-fuckers, joe...they're all welcome here.

  • Nick||

    Wondering: why, if 90% of libertarians believe that corporations are bad, does the LP Platform say "We defend the right of individuals to form corporations"? Since when did forming a corporation become a right? Aren't corporations legal statuses granted by government?

    In a "truly free market" every business would be a non-incorporated proprietorship, a partnership or a cooperative. Businesses would have less incentive to conglomerate because the owners would be fully responsible, legally and financially, for the actions or misdeeds of the business. By entrusting the business into the hands of others, the owner increases personal risk. Thus the market would be close to perfect competition, with many individual shops instead of big boxes. Adam Smith despised corporations.

    While libertarians need to recognize that corporations exist and are here to stay, as our economy is built upon them, we must also recognize that conglomeration of corporations results in numerous negative economic effects and moves markets further from competition towards oligopoly or monopoly (and thus towards government welfare). By replacing the entire tax code with corporate value and land value taxes, the government could naturally limit corporate growth without market interference or regulation (which as another commenter pointed out, actually helps big corporations by limiting small business competition - because only big businesses can afford to hire the professionals to deal with overly complex regulation and tax structures). By eliminating personal income taxation, the government could spur entrepreneurship via non-incorporated partnerships and proprietorships by eliminating personal income taxation.

  • ||

    TAO 7:58: "CED - psychologizing is the last bastion of the asshole."

    TAO 7:45: "this is how people like MNG view their fellow humans: twisted, irrational creatures who are nothing but victims to circumstance."

    I love it when a person's writing contradicts their own writings. Is that like "deconstruction" or something?

  • ||

    TAO 7:45: "this is how people like MNG view their fellow humans: twisted, irrational creatures who are nothing but victims to circumstance."

    Who is MNG?

  • ||

    "Let's say for the sake of argument, MNG, that you are fifty years old. Does it necessarily follow that, because my fifty-year-old father is not a Ph. D. and you are, that you owe him something?

    Would it follow if we proved that your 100-years-back ancestor (just one of them!) screwed over my father's 100-year-ancestor?"

    Well, no, but you're caricaturizing my position. We can't have an exact remedy of every wrong (and I don't even submit that there are necessarily "wrongs" in every case). I would support making conditions so that your ancestor's falling to mine 100 years ago would not unduly keep you from many of the opportunities that I would have gained from my ancestor's victory.

    So I would support your taxing me a bit to subsidize a school loan for you to get your PhD if you did not have the familial means to pay for one.

    See the difference?

    And Lord Xenu, screw you and the thetan you rode in on ;)

  • ||

    This is where I part company with the urge to jump on the anti-corporate/big-business bandwagon, just for the sake of making libertariasm more popular with leftwingers.

    I don't think it's necessarily true that business wouldn't get that big without government aid. Nor do I think it's neccesarily a bad thing if they do. There are many industries where huge corporations may indeed improve efficiency. Say, anything that involved the manufacture of large complex transportation vehicles, like Boeing 777's, supertankers, and cruise ships. All these industries are, at present, currently heavily intertwined with the government, via the defense industry. But that doesn't mean that a bunch of small businesses would be perfectly capable of taking over. Building something like a Boeing 777 involves so many layers of engineering and manufacture of specialized parts that it's difficult to imagine how a collection of small businesses are likely to do a better job producing aircraft than one large company. IMO, it's necessary to reach a certain scale before it's even possible to make certain things (like launching spacecraft into orbit) economically viable.
    Motorola can afford to blow $5 billion launching the Iridium system, and survive.

    And there's obvious examples like Microsoft. I suppose someone can come up with an example of how Microsoft benefits from government largess. But I don't see how Microsoft wouldn't have gotten there anyway. How windows took over the market can be debated. But it's fairly clear that having a single operating system produces efficiencies and that is the main reason why one system tends to dominate.

    In other words, there are cases where the market may produce monopolies or near-monopolies, or huge monolithic corporations,and that it's actually more efficient and better for everyone if they do.

  • ||

    jc-MNG, Mister Nice Guy, is my usual handle
    See my 7:25 post, it explains the temporary handle change

  • Seward||

    CED,

    So I would support your taxing me a bit to subsidize a school loan for you to get your PhD if you did not have the familial means to pay for one.

    That's fine, but why does everyone else have to pay the tax?

    Furthermore, this assumes that the government is the most effecient means by which to garner and disburse this benefit, which is a questionable (at best) assumption.

  • Seward||

    CED,

    BTW, your island hypo is flawed: the other two would likely quickly switch to some other type of food source or perhaps create items to trade with the boar hunter.

  • Sam Grove||

    The issue with the left right is that their opposition to support of corporations is so reflexive and emotive that they are only happy in bashing promoting corporate power rather than being thoughtful about how to deal with the problem.

    That is an acceptable restatement if one wishes to address the problem of the right, however, I was addressing the problem of the left with this issue.

    In their reflexive support of "regulation" the left ends up supporting an even greater binding of corporate power to state power...as evidenced by the recent bailouts, among other things.

  • ||

    MNG: you assumed my attitude about your preschool story was a result of something that happened to me. It's not.

    I assumed that your attitude towards your fellow man was ugly because...it is ugly.

  • ||

    Let's also keep in mind that modern civilization is not an island. Isn't it funny that a certain someone said that statists will always resort to "lifeboat ethics" when they're in a corner?

  • jk||

    In their reflexive support of "regulation" the left ends up supporting an even greater binding of corporate power to state power...as evidenced by the recent bailouts, among other things.

    Republican president George W. Bush did this, not the ethereal left.

  • Jeremy||

    Wait a minute.

    Left libertarians believe in abolishing force and fraud from human relations. Other libertarians believe in abolishing force and fraud from human relations. Both sides agree on the means to a libertarian end. The disagreement is purely on what the superficial characteristics of that end look like.

    So we have disagreements on how we think a libertarian society will manifest. So what? There's only one way to find out who's right; for us to work together, using our agreed upon principles, to realize a voluntary society and a genuinely freed market. That's the most important goal; everything else is a "Coke or Pepsi" issue.

    The ferocity of some of the comments here suggest that some libertarians are more interested in defending their personal attachment to the superficial trappings of capitalism as we know it than finding out what a free society looks like. If you're serious about libertarianism, work together with all libertarians to answer the question - instead of fighting about personal preferences!

  • ||

    Not that I care about "RED TEAM BLUE TEAM", but, jk, which party was it that showed a modicum of reluctance about the bailout and which one was wholeheartedly in favor of it?

    Not that it matters, because the one side pussed out, but still...

  • ||

    Jeremy - one of the main problems, as I see it, is that trying to go down the rabbit-hole of "which corporation receives the most benefits and is therefore deserving of derision" is a fool's exercise.

    If we do that, what's our argument against a windfall-profits tax? After all, we certainly cannot argue that ExxonMobil's profits were well-earned and deserved because, hey, they might have inordinately profited from government benefits at some point in time! And they should pay "their fair share" of infrastructure and the military because "they're bigger and they once received preferences from the government".

    Where does it end?

  • Jeremy||

    In other words, there are cases where the market may produce monopolies or near-monopolies, or huge monolithic corporations,and that it's actually more efficient and better for everyone if they do.



    Then you shouldn't be threatened by Long's argument. You'll be vindicated when/if we arrive at a truly free market.

    But until then, it's simply another opinion - just like the left libertarians'.

  • Jeremy||

    Jeremy - one of the main problems, as I see it, is that trying to go down the rabbit-hole of "which corporation receives the most benefits and is therefore deserving of derision" is a fool's exercise.



    As a left libertarian, I hardly engage in this, nor do I know many fellow left libertarians who do. We may use certain corporations as examples, but the goal is to arrive at a consistent application of principle, no?

    Again, there is a difference between saying "I predict that a free market would favor small over large firms" vs. "it's not a free market unless there's no large firms".

    Not only do I not recall any left libertarians ever saying something like the latter statement, I specifically recall the most studied among them (including Long) openly stating that some industries would probably be more favorable to large scale enterprise than others. As long as it's an issue for the free market, we're willing to take a wait and see approach. That doesn't mean we don't have an analysis that's informed by our opinions, suspicions, and yes, preferences - but that's ideology. We're willing to submit it to the test of the market, and we're willing to work with those that will get our society there.

  • Sam Grove||

    In their reflexive support of "regulation" the left ends up supporting an even greater binding of corporate power to state power...as evidenced by the recent bailouts, among other things.

    Republican president George W. Bush did this, not the ethereal left.


    Sadly, this is true but it is also true that most of the Democrats voted for the bailouts as well.

    For the government to assume management of business is to acknowledge that government is responsible for business, hence bailouts are an extension of that responsibility.

    Regulation of the economy is a left/progressive theme. That the GOP has hopped on board shows just how far the GOP has ventured from its rhetoric.

  • ||

    Forgive me if I seem to have misstated your position, but I didn't mean to imply that it was some kind of bastardized Cargo Cult one (wherein the dominance of small firms must equal free market success). My point was that, once you take away any modicum of "these enterprise's profits are their own and they are entitled to keep them", I'm not sure what arguments remain?

    Specific example: windfall profits tax. I would suspect (in all likelihood) that ExxonMobil is where it is today because somewhere down the line (and it may have been yesterday, for all I know) it received favorable treatment from the government that the residual effect of squashing new entrants to the oil-procurement market.

    Now, given that, should the government take all of those "ill-gotten" profits back? If so, why and if not, why not?

  • Sam Grove||

    CED, I understand the problem you would like to fix, but I suggest that it can't be fixed, as a government with the power to do so will become a government just as we have, an oligarchy of interests that will use the power to protect its interests even at the expense of those you seek to alleviate.

    Attempting to solve this problem by the means you seem to prefer makes the problem intractable.

  • Ebeneezer Scrooge||

    Roderick Long,

    Excellent article, and I largely agree. Though like others here, I'm not at all convinced that companies would be smaller, prices would be lower, and wages would be higher, as you assert.

    But as one who's spent his career working for large corporations, I have another beef with them that you didn't talk about. It's the fact that corporations are highly prone to "go along" when the government wants to impose legal stupidities, whereas one man empires are far more likely to fight it.

    Example: affirmative action requirements. I work in the aerospace industry. It's almost trite to say, but people die when we screw up. So I have a HUGE beef with pushing the promotion and advancement of "women and minorities" by slight of federal regulation. The first, the middle, and the last requirement for promotions in this industry must be competence, and nothing should be allowed to over ride that.

    Yet, I'm watching it happen right now. Yes, there are quotas that I know mangement is trying its best to meet, to promote more women and minorities, especially into the upper technical and management ranks. We're watching incompetents get promoted way above their merit. What blows my mind though, is that our VPs are on board with and jamming it down our throats.

    Corporations do not think like, or work like, a personally owned company. When the government wants to impose stupid rules, corporate boards say "you want to do *what*? oh, well, okay......" Contrast this with Howard Hughes telling congress just where the bear goes in the woods.

    Corporations today are nothing like the rational actors that free market theory is based upon, and it's a direct consequence of the T's & C's that corporations are allowed to operate under -- in other words, the way governments have written corporate law.

    I'm not a lawyer so I don't know how it would be done. But corporations are going to continue doing damage until we change the T's & C's, so that corporations function more like rational actors in the market place.

    Are you aware of any work that's been done along these lines?

    OTOH, we need to not do away with corporations. Aerospace is not the only industry I've worked in, but all of them have been highly capital intensive. There is a need and place for big corporations and they do confer great economic benefits.

  • Jeremy||

    Now, given that, should the government take all of those "ill-gotten" profits back? If so, why and if not, why not?



    Well, most left libertarians would see no role for the state, whether or not the ill-gotten profits should be given back or not. And there's debate about this within our own circles. No less a libertarian heavyweight than Rothbard suggested that workers homestead corporations that receive more than 50% of their income from the government (see Confiscation and the Homestead Principle).

    Similarly, I wrote an essay where I argued that a genuinely free market would be far more egalitarian and redistributionist than any commie might dream, through purely market mechanisms. I could be totally, flat out wrong, but this is an example of the kind of thinking we're doing. Also check out Carson's Libertarian Property and Privatization for more ideas.

    In a way, wouldn't you expect that honest and intelligent leftists and egalitarians, for instance, to find ways to realize their values and preferences in a voluntary setting? This is precisely the kind of "live and let live" attitude that libertarians of all stripes should be embracing - the possibility that we can all do our own thing, bear our own costs, and finally stop fighting the class / culture war. From that point of view, can you not see why the nitpicking just seems like "Coke vs. Pepsi"?

  • ||

    I, personally, am in the spirit of "let what was unjust lie. Let it never happen again."

    It may not be satisfactory, but it's kind of like the rationale behind pardoning Nixon.

  • Ebeneezer Scrooge||

    JP,

    As a result, we have the American of today -- someone who is accustomed to having things "taken care of" by a large bureaucracy, someone who imagines that goodies just "come from the central office" and that costs are just "written off," someone who sees the economy as a zero-sum game in which the more money the boss makes, the less the worker makes. No wonder people are so deaf to the small-government message.

    Amen to that. Working inside a large corporation can really warp your sense of how the world works. And not just the real cost of resources, which you mention.

    A corporation, because it belongs to "the shareholders", effectively belongs to no one. It's a funny little world and it's a lot like socialism. :) There I said it, now everybody can skewer me. But I believe that this environment does mess up people's sense of perspective on many things.

    And there's another aspect to this, which I think libertarians are prone to miss. We need our mega-corporations today, to handle our many capital intensive industries (auto, aerospace, etc). But as these big corporations get bigger, they get stronger, and this necessitates an inherently larger government to control them. Especially since they've grown into international congolomerations.

    Unless Uncle Sam wants to wake up one morning, and find out that Corporation X "just said no" to obeying some laws, because they don't feel like it anymore. [if you're an anarchist I guess that would be okay, but I'm not]

    Big strong economies require big strong governments to impose the rules of fair play on them. Yes I'd like government to be as small as possible, but sometimes I wonder how much smaller we could really get away with. Are we talking 10% smaller, or 20% or 30%?

    If libertarians ever want to get serious about being a real political force, it would behoove them to think about how much they could get away with shrinking government down. "Smaller, smaller, smaller!" is not clear, and at some point it's not really advisable anymore.

  • Ebeneezer Scrooge||

    fluffy,

    Since so many features of "late capitalism" can be blamed on "corporatism" and not on the market, at what point do we have to start to wonder whether or not our prosperity is the result of corporatism and not the market?

    I've long said that capitalism is a victim of its own success. There's so much money around to borrow now days, that corporations can just keep buying up their competitors until we effectively get cartels (and I would argue that's happened over the past 10-15 years). Then things start going down hill.

  • Ebeneezer Scrooge||

    Hazel Meade

    In other words, there are cases where the market may produce monopolies or near-monopolies, or huge monolithic corporations,and that it's actually more efficient and better for everyone if they do.

    I largely agree with you, but would argue that we The American People should be making a distinction, that we historically have not made. When are free market conditions possible, and when are they not possible? When they are not possible, we might want to consider alternate approaches.

    A free market functions according to theory only when you have multiple producers and multiple customers. If this condition does not hold on either or both sides of the equation, then you don't get free market behavior according to the theory -- and I for one question whether we should, under such conditions, continue to follow free market principles.

    But then, to me free markets are a tool, a means to an end, and not a religion.

    Example: streets and roads. You can have 25 restaurants competing within a four block square in a big city. But are we really going to have 25 different competing systems of streets, to get us to and from these restaurants? No way, there isn't enough real estate. You're simply never going to get the kind of competitive environment in streets and roads, that you get with restaurants.

    I've never been convinced that private ownership of our streets and highways, would be catagorically better than what we've got now. Though some combination of public and private might be better in some circumstances.

    Another example: public utilities. We're not going to have 25 competing companies trying to sell us gas and electricity, house to house. Not anytime soon. This is another place where free markets will never operate according to free market theory.

    The Europeans have done some really smart things with public utilities, that you can't find anything like here in the US. For example district heating and cooling systems, that are smarter from both and engineering and economics perspective. The improved efficiencies cut pollution too, for those who are into Gaia worship.

    We should draw lines, as clear as possible, between where free markets can and cannot function (and yes there will be grey areas too). Then consider our options, because free markets may not be the best option. The defense industry is another good example where things are never going to work along the lines of free market theory.

  • Ebeneezer Scrooge||

    ClubMedSux

    I think many of the above comments demonstrate why libertarianism isn't more popular. Somebody dares to suggest that part of the reason libertarianism is popular and/or misunderstood is because we do a poor job of selling it and everybody jumps all over him as Judas, Benedict Arnold and the guy who canceled Arrested Development all wrapped into one.

    Uh huh. Libertarians would much rather refine their theoretical purity, than become relevant.

    Becoming a relevant political force is a hell of a lot more work.

  • Ebeneezer Scrooge||

    James Ard,

    I'm sure there are plenty of corporations that think government involvement is a net negative.

    It sounds to me like you haven't worked inside one of our modern behemoth corporations very much, have you?

    The corporate mentality is a curious creature in its own right.

  • Ebeneezer Scrooge||

    Seward, RC Dean

    With regard to your bookstore example it would helpful to know if indeed their growth was free of such intervention. I don't know enough about the book industry to say yea or nay.

    I remember when the last of independents was going under back in the '90's. The market changed then in more ways than one. Suddenly if you found a book you liked, you better buy it now because six months later, it could be out of print and unavailable.

    I remember something about the government taxing inventory, and that hurt bookstores especially. I'm not sure but maybe the take over of the Borders and B&N's coincided with the government taxing store inventories -- ??

  • ||

    Jeremy and Ebeneezer:

    The key point of libertarianism, as I see it, is voluntarism, not capitalism. Capitalism is just what *tends* to happen when the government gets out of the way. But there may be situations where people will devise something more efficient. I'd still classify that as "free market", just not exactly what we normally think of as "capitalism".

    I have no problem with workers collectives, co-ops, or voluntary mutual aid societies, or any number of other things that people can come up with to deal with issues like roads and schools. If a workers collective can survive in a free market without government aid, more power to them.

    There's probably a lot of creative ways that local communities could find to maintain roads, as well. In a few instances, there might be a justificication for some kind of fees to deal with the free rider problem.

    My problem is that the left tends to think that co-ops and such should be institutionalized by the state, given favorable tax status, subsidized, and/or made mandatory. That's where I think that libertarians and the left part ways. Buy your fair trade coffee and your co-op chocolate all you want. Just don't make it mandatory for me to do it or tax me to subsidize it.

  • Kevin Carson||

    Angry Optimist:

    Gabriel Kolko argued that the Clayton Act's "unfair competition" provisions created a hospitable atmosphere for trade associations to restrain price wars:

    "The provisions of the new laws attacking unfair competitors and price discrimination meant that the government would now make it possible for many trade associations to stabilize, for the first time, prices within their industries, and to make effective oligopoly a new phase of the economy."

    "It was during the war [i.e. WWI] that effective, working oligopoly and price and market agreements became operational in the dominant sectors of the American economy. The rapid diffusion of power in the economy and relatively easy entry [i.e., the conditions the trust movement had failed to suppress without government help] virtually ceased."

    Hazel Meade:

    The Boeing 777 is an unfortunate example. According to Frank Kofsky, the aircraft industry was spiraling into bankruptcy as a result of the post-WWII demobilization, and was saved by Harry Truman's increase in spending with the escalation of the Cold War in 1948. And according to David F. Noble, the heavy civilian jet airliners would have been uneconomical to produce without the heavy bomber program, because the production runs would have been too short to fully utilize the extremely expensive machine tools.

    As for Microsoft, it's questionable whether the industry it serves would even have existed without the military economy. Most of the work in microelectronics and cybernetics came out of Air Force R&D and the military contractors serving the Air Force, and government procurement played a major role in providing a market for large mainframes when they were too expensive to find a civilian market.

    And you really think Microsoft would have its present market share without copyright law?

  • ||

    In a free market, firms would be smaller and less hierarchical...



    I was arguing this point over dinner with a visiting socialist from Canada. He was somewhat flabbergasted that a radical free-market libertarian wasn't defending corporations. The reasons firms are larger in our present system is:

    "When you need an army of lawyers to do business in the US, only firms large enough to afford those armies of lawyers will do business."

    Small businesses may innovate more, and run rings around the behemoths in many ways, but when it comes to negotiating the swamps of D.C. the behemoths rule.

  • ||

    ...and government procurement played a major role in providing a market for large mainframes when they were too expensive to find a civilian market.



    Ever hear of the LEO?

    http://en.wikipedia.org/wiki/LEO_computer

  • Ebeneezer Scrooge||

    My problem is that the left tends to think that co-ops and such should be institutionalized by the state, given favorable tax status, subsidized, and/or made mandatory.

    Well, yes, I'm with you there.

  • ||

    Then you shouldn't be threatened by Long's argument.

    We are not threatened by his argument...it seems pretty standard libertarian play book stuff.

    We are pissed that he is being a dick to libertarians for no good reason.

    Jesus how hard is it to simply say "I am working on getting the left to start thinking like us, so start curtailing your free market writing to emphasis its anti-corporatism nature"

    But no he could not do that...he had to take a huge shit on us first.

  • Jeremy||

    My problem is that the left tends to think that co-ops and such should be institutionalized by the state, given favorable tax status, subsidized, and/or made mandatory.



    You should really take it up with those leftists then, huh?

  • ||

    Yes, but I think he is saying that there are libertarians who defend what they think is "the free market" when it is in fact corporatism.

    Also, why does the article personally offend you so much?

  • ||

    I don't understand Long's use of the word "fascism." In fact, I'm really tired of that word in general. It doesn't really have any meaning except as a disparaging remark for things one doesn't like. Calling collusion between certain businesses "corporatism" makes sense, but "fascism"? Give me a break.

  • Sergio Méndez||

    I´ve been reading this exhausting discusion, and I think is pointless to respond to every argument (and "argument") given against Long piece.

    I just wanna say this to many of the libertarians worried that we "left winger airheads" are going to be bad traveler compagnions to the inmaculate libertarian movement: you don´t even understand the idea of this alliance. Long is not proposing that libertarians turn into collaborators of the already stablished "progresive" or political left. What people like Long are proposing is to make left wingers see that many of the evils they denounce are real, just that they denounce it by the wrong reasons. It is not "free market" which causes the pervasive power many corporations and big buisness posses. It is precisly the grants of goverment and state power, and the close relationship both seem to have. On the other side, it is libertarianism which represents the left true and autentic philosophy, as it was conceived 200 years ago. And it is the fact that liberty is a prime value, and that there is nothing incompatible between liberty and cooperation and fraternity (and that those other two values have more chances of flourishing in a free market, rightly understood). So is not about making an alliance with big goverment leftists, is about getting allied with leftists, like myself, who are willing to accept the core of libertarian philosophy.

  • Jeremy||

    Well said, Sergio. One thing Long didn't mention is that many left libertarians feel that libertarianism belongs on the left anyway - that it is at its core a radical, left-wing, revolutionary movement.

  • Fluffy||

    See? Non-falsifiable, but it will get you mad artistic cred.

    It's only non-falsifiable in the sense that all claims about history are ultimately non-falsifiable.

    If we accept a reasonable and common sense standard of proof, all we have to do is look at the historical record.

    We can start by looking at the physical record. Look at towns built in the 19th century, and then look at towns built in the 20th century, and observe the differences between the two. Although the 19th century was not libertopia and had its own set of state interventions, they were much less all-encompassing than those of the 20th. It is certainly not merely an attempt to gain "artistic cred" to say that the life patterns of the 19th century more closely reflect what would arise in a free market than the life patterns of the first inhabitants of Levittown, NY. You're acting like this is a controversial assertion, or one that is so arbitrary that we can't even examine its truth value, and that's just silly.

    And I don't think I'm applying the "one drop" rule here, either. When every detail of the physical environment is micromanaged by planners, when the entire society is built around a mode of transportation that required, and received, massive state support to take root, when something as basic to everyday life as electric power is delivered in a centralized mode that was specifically chosen and favored by planning and legislation, when entertainment spends a century dominated first by broadcast media whose structure was put in place by law and then dominated by state-sponsored monopoly cable media, etc. etc. etc., I think we've gone well beyond "one drop".

    By the way, with regard to the argument that arose here about how one corrects this problem, I am probably on your side. I don't think massive tax and regulatory punishments are the proper way to proceed. I would say the best way to proceed would be to say that if we're in a "corporatism hole", we should stop digging. But to correct what's already happened - I don't know if we can. At some point you have to apply the Hobbesian principle that you have to stop the cycle of expropriation at some point, and if that leaves some unjust advantages in place you have to hope they'll go away over time. There's no way to restore a starting position of perfect justice, and attempts to do so will run into the Proudhonistic fallacy.

  • Jeremy||

    It's only non-falsifiable in the sense that all claims about history are ultimately non-falsifiable.



    Precisely. As a human being, I reserve the right to hold values, preferences, etc. that are non-falsifiable.

  • ||

    You have the right to hold them, but if they're non-falsifiable, nothing can be gained by discussing them.

  • Sam Grove||

    Ebeneezer Scrooge,

    Are you related to George?

  • ||

    "Again, MNG, how is it MY debt to pay for what my ancestors did?"

    Because you benefited from it.


    There is an excellent case to be made that it is better to black in America in 2008 than to be black in Africa in 2008. Would we not say that the current generation of African-Americans benefitted from the slave trade? If not, why not?

  • b-psycho||

    "There is an excellent case to be made that it is better to black in America in 2008 than to be black in Africa in 2008. Would we not say that the current generation of African-Americans benefitted from the slave trade? If not, why not?"

    Because by that logic, if someone enslaves you & your family, and hundreds of years later someone descended from you is rich, that means they did you a favor...

    It's a logical fallacy. There's no way of telling how we would've turned out had our ancestors not been enslaved because they WERE enslaved. For all I know they could've turned out to be Africa's best & brightest, bound to advance their society, until some people decided to make them pick cotton overseas instead.

  • blueski||

    "So I would support your taxing me a bit to subsidize a school loan for you to get your PhD if you did not have the familial means to pay for one."

    And what of the unintended consequences of this seemingly innocuous notion?

    The direct result of state subsidized college loans is that college tuitions rise. The college premium also decreases as degrees become ubiquitous. This results in college grads that are saddled with large debts yet have dim prospects for employment. Already some 25% of college grads earn less than high-school grads. Then you have to take into account all those that dropped out because it turned out that the weren't suited for the rigors of university, yet still have thousands in student loans to repay.

    The law of unintended consequences is one that leftists need to pay far more heed to.

  • ||

    "I don't understand Long's use of the word "fascism." In fact, I'm really tired of that word in general. It doesn't really have any meaning except as a disparaging remark for things one doesn't like. Calling collusion between certain businesses "corporatism" makes sense, but "fascism"? Give me a break."

    So you're arguing that the word should be used as a vague derogatory instead of in its precise application? Fascism, a nationalized formalization of socialist principles, has always involved an alliance of government and corporate interests. As Long points out, corporations are not necessarily the same as "business," and the gulf becomes wider the more the government institutes industry regulations, which always favor the larger businesses and corporations to the detriment of small businesses and the free market. In a fascist system, government trades this form of regulatory protectionism for the corporations' advocacy and implementation of programs for 'social and economic justice.'

  • ||

    "So you're arguing that the word should be used as a vague derogatory instead of in its precise application?"

    Heck, no! Just the opposite. I appreciate your attempt at giving a more precise definition, but I think that even serious thinkers apply the word to wide variety of different societies and movements. How do you distinguish fascism from authoritarianism or corporatism, for example?

  • ||

    I think Long is being misconstrued. (Possibly he is guilty of doing the same thing to Ayn Rand, but I'm not qualified to say.)

    I'm familiar with Long due to his previous work the Richard Hammer's Free Nation Foundation, now called the Libertarian Nation Foundation and dormant, although its archive of articles at http://www.libertariannation.org/a/index.html (scroll down a lot) is an invaluable resource for libertarians, especially their more extreme anarcho-capitalist brethren. Long himself is an anarcho-capitalist, IIRC and am not conflating his position with Hammer's. Anyway, no lefty himself.

    I'm not optimistic about any kind of libertarian-lefty alliance, but I think that many points by Long are valid.

    I think it is true that:

    1) Corporations have certain government-granted or -created privileges that may not be favorable to free-market competition.

    2) Certainly big influential businesses will attempt to buy favors from the government rather than try to compete in a truly free government. The problem is not that these businesses are unwilling to leave these "opportunities" solely to their competitors and suffer disadvantages as a result; the problem is that the government has so much market-warping power to whore out.

    3) For sure, many libertarians are not good at presenting their ideas to non-libertarians and can readily lend themselves to charicature by libertarianisms enemies.

  • Jeremy||

    OK, I didn't want to bring this up, but I'm just going to come out and say it now that discussion has died down.

    In the essay, Dr Long writes:

    This is especially true if, as some libertarians argue, the corporate form itself (involving legal personality and limited liability) is inconsistent with free-market principles. ... For the purposes of the present discussion, however, let us assume the legitimacy of the corporation.



    I think Dr Long does a marvelous job of making his case without bringing this point into the equation. But my view is that you really can't directly attack the privileged structure of our economy without discussing entity status.

    In a voluntary society, it's possible that people will, of their own free will, agree to perceive, for instance, the thousands of employees of GE as comprising one "entity". But it's not at all guaranteed. The state provides an enormous stabilizing force for business merely by allowing them to form organizations, and the integrity and identity of those organizations are not subject to our voluntary consent.

    Limited liability is a huge privilege, too, but I think entity status - and the corporate personhood doctrine that accompanies it - is the root. There was once a time when the state was ok with calling whole sectors of the population less than human, turning people into property. Now the state turns property into people - magically.

    Granted, I can't prove people wouldn't of their own free will treat corporations as if they had equal rights with flesh and blood humans in a totally voluntary society. But I don't see any reason why they would, and I don't see how the corporation can do business as an entity without expressly getting the voluntary consent of even most people, which is dubious. There might be some industries where people are willing to acknowledge the identity and integrity of firms, but in most cases people want to do business and live around other people, not abstractions of contracts and assets.

  • ||

    Hazel Meade wrote

    "The key point of libertarianism, as I see it, is voluntarism, not capitalism. Capitalism is just what *tends* to happen when the government gets out of the way. But there may be situations where people will devise something more efficient. I'd still classify that as "free market", just not exactly what we normally think of as "capitalism".

    I have no problem with workers collectives, co-ops, or voluntary mutual aid societies, or any number of other things that people can come up with to deal with issues like roads and schools. If a workers collective can survive in a free market without government aid, more power to them.

    There's probably a lot of creative ways that local communities could find to maintain roads, as well. In a few instances, there might be a justificication for some kind of fees to deal with the free rider problem.

    My problem is that the left tends to think that co-ops and such should be institutionalized by the state, given favorable tax status, subsidized, and/or made mandatory. That's where I think that libertarians and the left part ways. Buy your fair trade coffee and your co-op chocolate all you want. Just don't make it mandatory for me to do it or tax me to subsidize it."

    my response:

    if the left-libertarians prescription of Long and Carson are correct that it is privileges handed out by the state to protect profits as a positive feedback loop to allow corporations to grow so large then by removing privilege so that the price of goods are it's costs which includes negative externalities (privilege allows costs to be externalized) and thus no room for profits then what we will have is not *capitalism* but rather *laborism* where labor will always get it's just due!

  • ||

    "Heck, no! Just the opposite. I appreciate your attempt at giving a more precise definition, but I think that even serious thinkers apply the word to wide variety of different societies and movements. How do you distinguish fascism from authoritarianism or corporatism, for example?"

    Yes, there are different meanings and interpretations of fascism. But I think we can give Long the benefit of the doubt when he makes reference to fascist Germany in a specific economic context, namely its corporatism.

    And I think if we extend the connection to Nazi Germany's... progressivism, we begin to see the problem.

  • Jeremy||

    if the left-libertarians prescription of Long and Carson are correct that it is privileges handed out by the state to protect profits as a positive feedback loop to allow corporations to grow so large then by removing privilege so that the price of goods are it's costs which includes negative externalities (privilege allows costs to be externalized) and thus no room for profits then what we will have is not *capitalism* but rather *laborism* where labor will always get it's just due!



    I can't speak for all left libertarians, but this is how I see it. For example. mutualists define profits as excess income deriving from privilege. Legitimate income from labor is just "wages" or rather market-found compensation for one's labor. So if you have a successful business selling widgets, a free market will TEND to drive the price of those widgets towards cost, with your labor being part of that cost.

    In a way, the whole idea of profit is a subjectivist concept designed to legitimate the phenomenon of monopoly pricing. "I'm not privileged - this is just what the market will bear!" Of course, in any market prices go up and down, and sometimes people will stand to earn more than their due if, for example, demand for their labor is excessive. But the market will eventually correct for that (for example, with more laborers entering your industry, driving prices back down). When you see sustained high profits over a long period of time, that's the sign of privilege.

  • Sheldon Richman||

    Wow, Roderick. You've hit a nerve. You might be on to something.

    History is on Roderick's side. For example,as I've written:

    "[T]he corporate elite pushed for what became the Federal Trade Commission (FTC) in 1914. The officers of the largest companies wanted a counterpart to the Interstate Commerce Commission, a government entity that would exercise control 'even as to prices,' said J. P. Morgan associate and U.S. Steel chairman Elbert H. Gary. He told a congressional committee, 'I would be very glad if we knew exactly where we stand, if we could be freed from danger, trouble and criticism by the public.' He wanted to be able to approach 'a responsible government authority, and say to them, "Here are our facts and figures . . . now you tell us what we have the right to do and what prices we have the right to change." This was a sure way to protect his company from competitors; the marketplace offered no such protection. (Source: James Weinstein, The Corporate Ideal in the Liberal State: 1900-1918, p. 84.)

    "The FTC was opposed by the National Association of Manufacturers (NAM), an organization of smaller firms. But to conclude that the NAM wanted laissez faire instead would be hasty. On the contrary, it wanted vigorous enforcement of absolutist antitrust laws against its larger competitors. The 1911 Standard Oil antitrust case had created a quandary for business. Although the case went against Standard Oil, the Supreme Court accepted the principle that big was not necessarily bad. But if companies had to wait until the courts sorted Bad Big from Good Big, life would be highly uncertain. For most businessmen, that left only two alternatives: the NAM approach, which condemned anything big, and the corporate elite's approach, which sought advance certainty from a trade commission that would let businessmen know, in Perkins's words, 'where we stand?'

    "Who of prominence in the business world wanted laissez faire? No one."

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