International Economics

A Libertarian Counterpoint on Naomi Klein

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Measured praise for Naomi Klein's Shock Doctrine comes from an unusual source: the longest-lasting journal of modern American libertarian thought, The Freeman. See Joseph Stromberg, an old movement hand, review the book (scroll a bit down in this page of the book reviews from the October Freeman).

An excerpt summing up his case for Klein:

She makes a complex argument dealing with what are, indeed, complicated matters. Some reviewers complain that Klein forces the evidence into a pattern. They say her treatment of the views of certain psychologists, economists, and military planners and her comparative account of how those views are (were) implemented, are "unfair," especially to the economists. But Klein rightly pursues the ideas in question across these fields of knowledge (and action) by analogy—a perfectly good Aristotelian and Thomistic procedure. "Hooding" a captive and "blacking out" an entire city by bombing are analogous, because they are done for the same reason—to disorient and confuse, and so on, through further stages of comparison.

The said psychologists, economists, and military planners dwell endlessly on certain themes because they see the world as a manipulable object and proceed from shared mechanistic, Hobbesian, positivist premises, whereby actual people are mere atoms, objects, or empty ciphers on indifference curves. We cannot be surprised that these experts' activities complement one another in real life and reveal an indifference to "unforeseen consequences," while a kind of mathematical Platonism underlies the supposedly "empirical" performances. Shared themes include "shock," "shock therapy," crises as experimental opportunities, and "clean slates" (Hobbes's "clean paper") on which to plot out new worlds. They talk this way; Klein makes nothing up.

Klein follows these common threads from the "free-market" Chilean tyranny, through Mrs. Thatcher's rather mixed reforms, phony "privatizations" in Poland and Russia, the half-mad U.S. invasion of Iraq, with more phony "privatizations," dispossession of small-holders in Sri Lanka, and "state failure" in New Orleans, where school vouchers were imposed while the city rotted.

The Sri Lankan case must suffice here. There, long-established fishermen, having survived the tsunami, were barred from their beach holdings, so that resort hotels favored by the World Bank, U.S. operatives, and investors might expand. This is precisely what a Chicago Law and Economics (Coasean) judge would do. The fishermen are "socially inefficient." They got no "growth." Away with their land! They may come back in the reformed "free market" as waiters and busboys.

One key to the new order, I would add, is this: By excluding war-making capacity ("defense") from the concept of "state" by implicit definition, Republican "anti-statists" create a desert mirage. We can wrangle over smaller government any time; no one can reasonably hold that we are getting such a thing now from those in power, sundry "privatizations" notwithstanding.

Current Freeman editor Sheldon Richman (an old colleague and old friend) has been far more open than previous Freeman editors to what is sometimes called "left-libertarian" thought, a complicated locution that in at least one of its meanings indicates a willingness to recognize and discuss how many of the existing facts of quasi-market capitalism in America deserve not commendation, but strict and constant condemnation, from libertarians.

This mode was more common in the libertarian movement mainstream in the 1960s and 1970s (with Stromberg even then a recognizable voice for it) than it has been since. (In a very, very rough metric, the libertarians of this type tended to love Murray Rothbard a lot more than they loved Milton Friedman, who is in Klein's own view the prime villain of the modern world.)

These types of libertarians are the ones who tend to poke at me for choosing that Randian phrase "radicals for capitalism" as the title of my history of the libertarian movement, since they see "capitalism" as being best defined as not true free markets but the complicated realm of corporate/state privilege we now live in. (To me, and Rand, capitalism merely meant a system where people can freely and justly own and trade private property.) For a good blog that waves the flag commendably for this variety of libertarian thought, see frequent Hit and Run commentor Kevin Carson at his Mutualist blog.

Our October issue featured a far more critical review of Klein's book, from Johan Norberg. Jesse Walker here dissects her misunderstandings, and misrepresentations, about the extent to which the Current Crisis does, and doesn't, reflect failures of the free market.

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  1. (somewhat unrelated) Question – why have liberals never embraced federalism? It seems like a great way for them to implement their ideas in some states, to “show others that it works”, while not having to deal with all the rubes in the rest of the country.

    I’m asking mainly because i’m sure Naomi’s solution to all these problems is more (benevolent aka liberal) federal govt involvement.

  2. This is precisely what a Chicago Law and Economics (Coasean) judge would do. The fishermen are “socially inefficient.” They got no “growth.” Away with their land! They may come back in the reformed “free market” as waiters and busboys.

    That is flat out bullshit. Quintessential Kleinian bullshit at that. The Chicago School emphasizes optimization of capital through property rights and free trade. Most often the focus of their work is on the consequences of policy on the most disenfranchised segments of the population. They would argue that land holders must be allowed to sell their land for development, but would never argue that property may be confiscated for development.

  3. Question – why have liberals never embraced federalism?

    Because all the liberal victories have been of the nature of codifying liberal ideology into law and imposing it on everyone. They’re not interested in “show others that it works”. They want racial diversity in college enrollment, employment, etc. If that means normalizing SAT scores, and affirmative action, then so be it. It doesn’t matter if “it works” because it can not be allowed to fail.

  4. Thanks, Warren. I was about to post something similar about the “Coasean judge” remark. I’m surprised to see a libertarian misusing Coase the way lefties so often misuse Friedman.

  5. Ditto on Coase.

  6. The “capitalism” Naomi Klein derides is more reminiscent of the European Rhineland model than of Anglo-Saxon capitalism. In America, there is still the opportunity to grow rich on one’s own merit. In Europe, people only become rich by using the state as device.

  7. Question – why have liberals never embraced federalism?

    The actual history of modern liberalism (in the sense we mean it now) really flowered in the Civil Rights movement. Most of the work done there to improve voting and accommodations access and clamp down on segregation took place contra many states.

    And it is, I think, still difficult to envision Mississippi or Alabama coming to the conclusion *all on their lonesome* that lynching blacks, blasting them with fire hoses, and denying them access to civil society at nearly every level weren’t the best ideas in the world.

    They are, I think, rightly suspicious of states due to the history of the last century. It’s an awfully big leap from having to use the Fed to end segregation shenanigans to suddenly embrace state’s rights.

  8. For those interested in an extended explanation/defense of Stromberg’s aside about Coaseian judges, see:
    http://www.allbusiness.com/legal/3585812-1.html
    Text of a Harvard Journal of Law and Public Policy article by Walter Block that tries to make the case for that interpretation of Coase.

  9. lmnop,

    Okay, better question – why havent liberals pushed for subsidiarity then? That handles the state problem by pushing things even further down to the local (or further) level, in which case black communities in AL and MS would have to worry abuot white state powers.

  10. also I think liberals may be reluctant to decentralize power because they understand that were an individual state to try to pursue unmoderated liberal goals, there would be nearby states to absorb all the businesses and tax revenues they would immediately start to hemorrhage. thus do they prioritize making programs universal.

  11. These types of libertarians are the ones who tend to poke at me for choosing that Randian phrase “radicals for capitalism” as the title of my history of the libertarian movement, since they see “capitalism” as being best defined as not true free markets but the complicated realm of corporate/state privilege we now live in.

    This is closely related to the discussion we periodically have here about whether one should try to justify libertarianism by reference to utility – i.e. “Does it make sense to try to argue that free markets produce good economic outcomes?”

    I grew up on Long Island in the 60’s, 70’s and 80’s. And I think about life on my street at that time: We lived in zoned and planned suburban housing built according to fairly strict building codes; commuted to school and work on a massive public road network, usually in cars built by three companies in an oligopoly supported by the state in a myriad of ways; watched three television networks that were another oligopoly put into place largely by the efforts of the state; went to work for Grumman or some other defense contractor, or maybe took the public railroad into NYC to work trading government bonds; etc. And this is looked at now as, in many ways, a golden age for the United States [although I experienced mainly the tail end of it]. This means that a fairly obvious problem with utility arguments for libertarianism is that you have to untangle whether our prosperity was the result of the “market” part or the “state” part of our political economy, and every last detail of that untangling will be hotly disputed by the statists. Except by a “Galt’s Gulch” standard, “the complicated realm of corporate/state privilege we now live in” is, in fact, “capitalism” – or at least it is made to be so every time some Cato economist says that the economic success of the US argues for the free market.

  12. I don’t know from Coaseian judges (maybe I’ll read Brian’s link if I have the time), but I hate reading about injustices like the one cited in the middle of all this mind bogglins jargon. I mean, if the fishermen were unjustly kept off their land to promote tourism, well FUCK, GIVE ‘EM BACK THEIR LAND! I don’t need all this damn jargon and conspiratorial bru-ha-ha to say that’s a damn miscarriage of justice and it’s plain WRONG. Couching it in all these vague worldwide evil psychological patterns just obfiscates the issue and makes me wonder (without having any corroborating evidence offhand) if it’s just made up! Of course, it could easily be true too. If so, I wish I didn’t first read about it in such a convoluted context that seems to use it to justify wacky theories rather than to focus on the injustice itself!

    And Brian, must we dismiss all attempts at liberalization short of out and out anarchy as merely more of the same? I hope not, cause I’m gonna grow old and die waiting for anarchy….

  13. Thanks, Brian. I just call them as I see them.

    This, by the way, is very good: “a willingness to recognize and discuss how many of the existing facts of quasi-market capitalism in America deserve not commendation, but strict and constant condemnation, from libertarians.”

  14. Okay, better question – why havent liberals pushed for subsidiarity then?

    Because a proper application of the principle of subsidiarity would push most relevant decisions down to, at best, the state level.

    IIRC, subsidiarity is the principle that a task should not be undertaken by an entity if the same task can *adequately* be provided by some autonomous subdivision of that entity. Much of the stuff that matters, both to liberals and to statists in general, fall outside the practical purview of a town or even a county.

  15. US Libertarians, urged on by rightists who mean the movement no good and are often simple fascists, disastrously conflate any Libertarian-direction processes of Liberalism (small government) or anarchism (really small and non-punitive government) with Libertarianism (voluntary governance based on conscious adherence to rights). Klein is more than happy to muddy the waters further in the usual leftist style of un-researched assumptions, so denouncing serious problems as being the result of too much freedom.’ Libertarians’ who describe themselves as left or right, and the lazy scholars who enable them, thus look back like Lot’s wife left to Sodom or right to Gomorrah from whence they came instead of focusing on where they say they’re going.

    What is really ironic but iconic is that Dr. Friedman advised a Libertarian project to help establish the rights of these self-same expropriated Sri Lankan fisherman, a fact that neither Klein nor her Libertarian critics register but certainly should have suspected, and could have researched, with one or two phone calls. Friedman was also highly active in working to diminish the militarist state, notably in advising projects that have removed the draft in many countries, while many leftists only complained.

    M. Gilson-De Lemos
    Libertarian International Organization

  16. Fluffy,

    Unfortunately, there are no controlled experiments in macro economics. We’re facing the same thing in the financial meltdown thing. Whatever bad shit goes down can be attributed to too much regulation or not enough. Ask 10 experts, get 10 answers.

  17. lmnop,

    While I agree with your definition, I disagree. Most of the stuff that matters can be handled at the town or neighborhood level.

    Well, maybe that isnt the stuff that matters, to liberals and statists.

  18. Unfortunately, there are no controlled experiments in macro economics. We’re facing the same thing in the financial meltdown thing. Whatever bad shit goes down can be attributed to too much regulation or not enough. Ask 10 experts, get 10 answers.

    Exactly.

    But this precisely why utilitarian arguments will never be a stable basis for the advancement of freedom, and we should probably stop wasting our time with them.

    Freedom can only be advanced by persuading the public that freedom is just. And that may be very, very difficult to do, but it still seems easier to me that the utilitarian argument, which people run away from screaming every time some large company closes or the stock market goes down.

  19. The liberal obsession with centralizing power in Washington predates the civil rights movement. It originates in the Progressives of the late 19th/early 20th century. The original idea with Progressivism, though you’ll never hear it now, was having society run by “experts” in government who would impose the best and most efficient way of doing things on every one(i.e., “expert-led reform”). So it makes more sense from that perspective to gather all your best experts in one place to run the whole country rather than to have 50 groups running 50 states, since then you can get all the best and the brightest without diluting them among the states. It’s the same reason they wanted to concentrate power in the Presidency. Woodrow Wilson explicitly stated in one of his books that the way the Constitution divides and diffuses power was a “mistake” because it’s “inefficient”. On a more concrete level, there was also an issue with the courts striking down some Progressive state-level economic controls as being an exclusively Congressional power.

    Gene Healy’s book touches on all this, particularly focusing on Wilson and TR, since these same Progressives are the guys who basically invented the Cult of the Presidency as we know it.

  20. While I agree with your definition, I disagree. Most of the stuff that matters can be handled at the town or neighborhood level.

    I do too. I’m not a liberal. The question was “why don’t/haven’t liberals…”

  21. 19th century/ early 20th century progressivism != mid-20th century to present liberalism

    This is like the perennial keynesian != socialist that annoyingly has to be brought up over and over again.

  22. The point that the status quo is not wholly or even mostly the product of a free market is an absolutely necessary point. It’s the defense against the inevitable “libertarians just want to turn society over to the big corporations!” argument. If anything, an implementation of libertarianism would upset the economic power structure a lot more than it would the society and culture as a whole, since government is so much more entwined with the economic sphere.

  23. lmnop,

    Keynesians are socialist.

    🙂

  24. Elemnope-

    They’re not the same thing, correct, but modern liberalism absolutely does have its intellectual roots in progressivism, and is heavily influenced by that history.

  25. I’m not a liberal

    That’s surprising to read. Not that I care about trapping anyone into an ideological box but based on your posting, it doesn’t seem like you put much stock in libertarianism as a political philosophy.

  26. If anything, an implementation of libertarianism would upset the economic power structure a lot more than it would the society and culture as a whole, since government is so much more entwined with the economic sphere.

    Say what? I’m pretty sure that the “economic power structure” is heavily entwined with the social sphere and culture-production. Media is an economic beast, to say nothing of the fact that our very values and definitions in the legal and moral spheres are heavily informed by the central role of property and the dominant narratives of corporate and government behavior.

  27. Im pretty sure if we charted lmnop on a Nolan chart he would be in the libertarian quadrant* but hugging that liberal line.

    *It aint a quadrant, there are five of them. Pentant?

  28. ~20 yrs. ago in The Freeman, Clarence Carson pointed out that Marx invented the term “capitalism” and used it to mean a regime in which the owners of capital rule. And Carson said that was etymologically correct by analogy with other -isms, so he much preferred terms like “free enterprise”.

  29. The biggest problem with the link Brian provided is that whole “mix your labor with the land” Lockian bullshit. Im generally a fan of Locke’s, but that wasnt one of his brightest ideas.

    Property is initially gained by taking it from the weak and then instantiating a government to enforce your property rights before the weak can take it back.

  30. LMNOP,

    Huge swaths of the rent-seeking upper middle class would be devastated by the implementation of libertarianism.

    And in cities and towns across America, the local elite in real estate development, retail, food service, banking, etc. are hugely subsidized by state barriers to entry in these areas.

  31. BTW, that version of initial property rights is a me paraphrasing Mises.

  32. Fluffy,

    Huge swaths of the rent-seeking upper middle class would be devastated by the implementation of libertarianism.

    Sweeeeeeeeet.

  33. Elemnope-

    Of course it’s all intertwined. Any attempt to draw a line between the “economic sphere” and the “social/personal sphere” is going to be fuzzy at best. My point was that government exercises much more direct and intrusive control over the economy that it does the culture. There would be an upheaval in both, no doubt, I’m just saying that I think the economic shift would be bigger than the cultural one.

  34. They’re not the same thing, correct, but modern liberalism absolutely does have its intellectual roots in progressivism, and is heavily influenced by that history.

    And my point, essentially, is that is equivalent to calling Christianity merely a Jewish sect. Is it important to recognize the massive influence that Judaism has over Christianity in order to understand the latter? You bet. Does it allow us to conflate the two? Absolutely not.

    That’s surprising to read. Not that I care about trapping anyone into an ideological box but based on your posting, it doesn’t seem like you put much stock in libertarianism as a political philosophy.

    I put lots of stock in the political philosophy of libertarianism; it possesses a great deal of value to recommend itself. I agree that the ultimate goal of creating a sustainable situation of maximal human freedom is the most desirable political outcome. I have a problem with some of the proximate steps that orthodox libertarian thought (if there is such a thing) takes to get there.

    For example, I don’t treat the NAP as an axiom. I don’t think it is a given that a minimal state *necessarily* provides maximal freedom (though it is, ceteris paribus, *more likely to do so* than a larger one). I think the insistence on a moral basis to tax is somewhat silly and defeatist. I think that some allowance should be made for utilitarian concerns in the management of human affairs.

    I call myself a Libertarian, and when pressed on the point will call myself a “left-libertarian” or “heterodox libertarian”. How that serves by way of some explanation. 😉

  35. Fluffy,

    You may still have to convince people that libertarianism is not a utilitarian nightmare, or they may not care to be convinced that it’s just.

  36. This appears to be an argument in semantics. It seems to all come down to her misunderstanding what the words capitalism and libertarian actually mean.

  37. lmnop,

    I think the insistence on a moral basis to tax is somewhat silly and defeatist.

    I think that all human action, not just tax, not just government, requires a moral basis.

  38. “And my point, essentially, is that is equivalent to calling Christianity merely a Jewish sect. Is it important to recognize the massive influence that Judaism has over Christianity in order to understand the latter? You bet. Does it allow us to conflate the two? Absolutely not.”

    Fair enough. Though what I was getting at is pretty much exactly what you’re saying is OK.

    Pinnette-

    Welcome to libertarianism.

  39. “I think that all human action, not just tax, not just government, requires a moral basis.”

    I can think of a lot of actions that are amoral. In fact, most human actions have no particular moral dimension.

    There’s a difference between “don’t do anything immoral” (which, from the moral libertarian perspective, is any act of aggression against person or property) and “only do things that have a positive moral basis”

  40. I think that all human action, not just tax, not just government, requires a moral basis.

    I think that all human actions have a moral valence.

    What I do *not* think is that all human actions require a moral justification.

    Purchasing grapes instead of apples at the store is an active choice that has moral repercussions throughout the fruit market and every human being theretofore attached (if nearly imperceptibly). But one need not justify the choice in moral terms.

    There are practical adiaphoron, even if as a literal species of act they do not exist.

  41. Fair enough. Though what I was getting at is pretty much exactly what you’re saying is OK.

    ;). But on a practical note, I think it quite a temptation (to which many succumb regularly) to elide the distinction between the antecedent ideology and its modern progeny. That’s why I think it crucial to stubbornly maintain such distinctions.

    Might also have to do with me being stubborn.

  42. Back on to the “subsidiarity” tangent—

    Isn’t that what ACORN is doing with it’s community organizing, “affordable housing” agitation, electing progressive mayors, city council members, county supervisors, etc? They’ve gotten living wage laws passed that apply to any private firm working on a city contract and are trying to impose “exit visas” on private companies that want to move out of a high tax jurisdiction (sort of paying damages to the community for loss of jobs and tax revenue). Holy Creeping Socialism!

    As much as I think the agenda wrong-headed, it will be fascinating to see what works and what doesn’t. Much better than having things imposed top-down from D.C.

  43. The Sri Lankan case must suffice here. There, long-established fishermen, having survived the tsunami, were barred from their beach holdings, so that resort hotels favored by the World Bank, U.S. operatives, and investors might expand. This is precisely what a Chicago Law and Economics (Coasean) judge would do.

    Bullshit.

  44. “Bullshit,” he explained.

  45. Property is initially gained by taking it from the weak and then instantiating a government to enforce your property rights before the weak can take it back.

    This example presupposes that the weak have already established a property right to that which is illegitimately taken, which means Locke’s argument is still valid.

  46. I think the Block article is misinterpreting Coase as saying that the goverment should reassign property rights to achieve the maximum social value whenever it looks like they aren’t assigned that way when they’re actually saying that when property rights are ambiguous, the preferred assignment should be the one that looks most likely to achieve the maximum social value. The later seems a lot more consistent with what I’ve read on Coase regarding the need for standards to determine rights before bargainning takes place. If the courts will just give it to the user who will derive greater value, then there is no incentive for that user to bargain, just to sue – it doesn’t make sense for Coase to be advocating a policy that preempts the bargaining process. When there is a legitimate dispute about property rights, it doesn’t matter much overall efficiency wise which way the courts decide if transaction costs are low, but when they’re high, you get a more efficient outcome if you grant the disputed right to the party that would end up with it if transaction costs were small. If you consider initial property distribution rules to have no moral basis (a disbutable point, but I don’t see any moral basis to the homesteading rules, so Block isn’t giving a viable alternative, IMO), why not go with a rule that favors more efficient outcomes?

  47. I fall on Elemenope side of this matter. The progressives are not just the root cause of modern liberals and many of them would not have supported the expansion of civil rights which is the hallmark of modern liberalism, but they are responsible for most trends in the Republican party from TR, Hoover, Nixon, etc. in believing in the competence of a central managerial authorities be it finance, industries or defense. Perhaps, there claim to
    the Progressive mantel is even greater than the liberalism that grew out of the 60’s.

  48. competence of a central managerial authorities .

    Strike that ‘a’.

  49. Interesting. I was looking for a little info on Prescott Bush for that last post, but decided it was only a side matter, however, it seems the internets are ripe with Prescott matters,

    What the hell is this:

    Bush Hitler Nazi Death Camp Connections — Bush Family History …
    Bush Family Nazi Supporter image – Samuel Prescott Bush … It’s not a far step for son Prescott Bush managing Auschwitz slave labor worked to death. …
    ecosyn.us/Bush-Hitler/ – 27k – Cached – Similar pages

    How Bush’s grandfather helped Hitler’s rise to power | World news …
    George Bush’s grandfather, the late US senator Prescott Bush, … The debate over Prescott Bush’s behaviour has been bubbling under the surface for some …
    http://www.guardian.co.uk/world/2004/sep/25/usa.secondworldwar – 93k – Cached – Similar pages

    Reason should be all over this stuff.

  50. I see, it is coming up of late because it is mentioned in the movie ‘W’. Of course, one of my examples is not from recent postings.

  51. I think maybe original property rights were a matter of first come first served.

    Any unclaimed area may be subject to an initial claim. Afterwords there may be either consensual transferal or seizure.

  52. And if Naomi Klein is going to knock Friedman, then she needs to learn enough economics to qualify herself instead of tainting him with that Pinochet brush.

  53. Sam Grove | October 16, 2008, 8:14pm | #
    I think maybe original property rights were a matter of first come first served.

    Any unclaimed area may be subject to an initial claim. Afterwords there may be either consensual transferal or seizure.

    My favored analogy comes from Rothbard’s Ethics of Liberty where he uses Robinson Crusoe’s desert island as the example. Crusoe arrives as the sole proprietor, he builds his hut, a means of extracting well water, a fire pit, the whole paradise shabang. Mr. Friday arrives after Crusoe has established himself, and the question is asked, to what does Friday have title to in this framework, and as first inhabitant, does Crusoe hold sole possession.

  54. Can we get more left libertarian posts cause this is easily the most intelligent thread over 20 posts I’ve seen at reason in an age.

  55. No time to comment in details, but, yeah, damn good post!

  56. robc said: “Property is initially gained by taking it from the weak and then instantiating a government to enforce your property rights before the weak can take it back.”

    Great formulation. Actually, the Georgists or geolibertarians, among whom I count myself, speak of the Lockean Proviso: the idea that individuals’ rights to acquire private property from nature is conditioned upon leaving “enough and as good in common…to others.” If there is not enough “as good” natural property left for others, then those others must be compensated in some way.

    You say that your formulation is a paraphrase of Mises. I find that very interesting, because in my experience the Miseans believe Georgist leaning ideas to be anathema. They swallow the homesteading principle hook, line and sinker. Could you please point me to where Mises says something similar to your formulation, so I can use it against boneheaded self-styled Austrians like Stephan Kinsella?

  57. John K,

    It is somewhere in the early parts of Socialism. Basically, he said that property follows “might makes right” but at a certain point rule of law comes into play and from that point on, law is more important than might.

  58. Fluffy:
    that’s a tough question. Progressives would, of course, like to say that the 50’s-60’s model of government was responsible for broad-based economic growth. (Reminds me of a friend, very smart guy, who essentially wants to live in Johnson’s administration — one of the few Democrats I know who’ll cop to being a “classical conservative.” He wants power in the hands of the smart people. I tremble.)

    The thing is, economic growth stalled before big government did. Somewhere in the mid-seventies, inflationary expectations kicked in and it was no longer possible to trade inflation for unemployment. The “Golden Age” couldn’t have lasted, even if it did owe some of its luster to government interventions. Or at least that’s my take.

  59. Chapter 1, Section 2 – Violence and Contract

  60. This is closely related to the discussion we periodically have here about whether one should try to justify libertarianism by reference to utility…

    Seems like any rational ethics has to be founded in utility. Albeit utility nd informed by experience and wisdom, and a long-term outlook. And generalized into an abstraction that can cover novel situations. If your ethics isn’t based on utility, what would you base it on: an imaginary being in the sky? aesthetics? nothing?

    It follows that one should be able to give both ethical and utilitarian arguments. If your ethics make any sense, the two shouldn’t be in conflict.

  61. Property is initially gained by taking it from the weak and then instantiating a government to enforce your property rights before the weak can take it back.

    Dunno. Acquisition of property has a mixed history. There are lots of examples of property having been stolen, lots of it having been created or taken from nobody.

    Protection of property has a mixed history, too. There are lots of examples of it being enforced by governments, churches, tribes, families, gangs, etc. There are lots of examples of it being enforced by general agreement on a set of rules for a society’s mutual benefit.

  62. This appears to be an argument in semantics. It seems to all come down to her misunderstanding what the words capitalism and libertarian actually mean.

    We libertarians should just let it go and accept that the popular meaning of “capitalism” has become what we would call “a mixed economy” or “crony capitalism”. As has been pointed out, it’s Marx’s word, anyway.

    If you converse with a liberal using his meaning for the word, and hold your tongue when you get the urge to correct him, you’ll find that a lot of their complaints about “capitalism” are your complaints, too.

  63. Huge swaths of the rent-seeking upper middle class would be devastated by the implementation of libertarianism.

    Just think of the cries from the defense industry if we limited our defense spending to the combined total, about $185 billion (down from $711 billion!), of the next three highest spending nations. At the very least, rentals of “Falling Down” would skyrocket.

  64. At the very least, rentals of “Falling Down” would skyrocket.

    And by that you must mean homemade low-budget remakes of “Falling Down” would skyrocket.

  65. Mike: I’m with you on finding common ground. Most of our nineteenth-century laissez-faire thinkers were arguing against special privileges to corporate interests. But, silly as semantic arguments can get, words do matter. People like Naomi Klein will relentlessly conflate the two meanings of “capitalism” — they see unregulated markets as part of the same bad phenomenon as crony capitalism. We should be making the distinction clear.

    I like “corporatism” as a word for alliances of state and business. And maybe “commerce” is a better word than “capitalism” for a system where people can freely and justly own and trade property. The idea is to emphasize fairness (so often the left’s word), rather than greed. A competitive market is fair. Rent-seeking is greedy.

  66. I like “corporatism” as a word for alliances of state and business. And maybe “commerce” is a better word than “capitalism” for a system where people can freely and justly own and trade property. The idea is to emphasize fairness (so often the left’s word), rather than greed. A competitive market is fair. Rent-seeking is greedy.

    The problem really becomes that all words are fraught with history. Someone says “corporatism” and a substantial number of people who would care about such things immediately think “Italian Fascism”. “Commerce” is a word that is normally fetishized to include only the macro sense of trade and ownership.

    I agree that terms need to be refreshed. I think we might have to dig deeper to find ones that don’t immediately evoke something annoying and/or unrelated.

  67. Thanks for the link and the kind words, Brian.

    Re Stromberg’s remarks, I don’t know if it’s fair to attribute the Coasean position he describes to the Chicago school in particular, but I’ve seen essentially that argument used by more than one right-wing “libertarian” apologist for such abominations as the Enclosures.

    I’ve even seen it used by some of the hangers-on at Mises.Org, which is rather odd given that an Austrian should be fully aware that there’s no generic “social efficiency” in the use of a property apart from the ends of its owner. And whether or not the property ends up in the hands of the “most efficient” user, it makes a hell of a lot of difference that the property was stolen from the standpoint of the rightful owner, since HE is out the economic benefits he previously derived from it.

    From the standpoint of a Third World peasant, who was evicted by quasi-feudal landed oligarchs so the land he was working could be used to grow cash crops, it really doesn’t matter even if the agribusiness operation is “more efficient” (which it almost certainly is not, in terms of output per acre, as opposed to output per man-hour). He no doubt found it far more “efficient” when he was feeding himself on his own land, compared to a state of affairs where he squats in a shantytown and is unable to buy the corporate-grown food raised on his former land at any price.

    I repeat, Klein’s accusations against Friedman are mostly slipshod, and frequently reprehensible. Ditto for her uncritical generalizations about libertarians. And her theoretical incoherence when it comes to distinguishing between actually exisitng capitalism and the free market, or between neoliberal “free market” rhetoric vs. the reality, is quite unfortunate.

    But I’ll also repeat that her concrete description of the neoliberal policies that have actually been adopted under the Washington Consensus, country by country, is almost entirely on the mark. She’s just wrong to equate it to the free market, to blame on libertarians in general, and on Friedman in particular.

    As a documented account of the crimes committed by state-allied corporate hogs at the trough, from Pinochet’s Chile to Putin’s Russia, her book is a valuable reference source.

    If my philosophy could be put on a bumper sticker, it would be “Green ends with libertarian means.” The lefty and green types are generally correct about all the things they hate, but economically illiterate when it comes to assessing causes.

  68. And by that you must mean homemade low-budget remakes of “Falling Down” would skyrocket.

    Michael Douglas would join Marilyn Manson (he got Rose McGowan, lucky bastid!) and violent video games as another pop-culture villain. Although given how bad the reaction was to Boeing losing a tanker contract to a FOREIGN! firm, I can’t imagine the whole structure being reduced to a much smaller level.

  69. robc:

    Thanks for that citation. I read the section you referred me to. Mises clearly gives little currency to the homesteading principle, which Murray Rothbard and modern-day Miseians clearly do.

    I found persuasive Mises idea that law originated first and foremost to establish and maintain peace, without much regard for the justice of the distribution of property which it endeavored to maintain for the sake of peace.

    Where I find the Georgist idea to be valuable is precisely where Henry George found it to be valuable — in the realm of tax policy (i.e. Henry George proposed a “single tax” on the unimproved value of land and the abolition of all other taxes.). Taxation is necessarily an infringement on the property relations and distributions that the law is supposedly designed to maintain and secure in the interests of peace. So long as we have such taxation (and may there come a day when we don’t), principles of natural justice should be taken into account in the allocation of such taxes. One of the most fundamental of these principles is that everyone born into the world has an equal right to the earth — i.e. those goods which were not created by any man. The Georgist idea is that those who have been so unfortunate as to come of age without any such property, who have been dispossessed of their natural right, should not in addition be subjected to taxation in any form, while those who are so blessed as to find themselves in possession of more than their “fair share” of the earth should bear the burden of any taxation.

    I agree with Mises that it would be contrary to peace to try to physically and actually redistribute the ownership of such natural resources, or to take money from some in order to give it to others. But so long as we have taxation, taxes should be allocated to alleviate rather than aggravate the natural injustices that undoubtedly exist. Probably the government shouldn’t take from anybody, and probably it shouldn’t take from the rich to give to the poor, but so long as it takes, it should take from the rich instead of the poor.

    I believe the left-libertarian Karl Hess concurred with this view, saying that until taxes could be abolished entirely the Georgist single tax would be the next best thing to abolition. Milton Friedman likewise described the land value tax as the “least bad” tax from a purely economic perspective.

  70. This appears to be an argument in semantics. It seems to all come down to her misunderstanding what the words capitalism and libertarian actually mean.

    In a nutshell.

  71. No time to comment in details, but, yeah, damn good post!

    1. I agree with T. here.

    and

    2. At least here at the HitNRun libertarians don’t deny that the almighty military is a state function, but rather say that some military is necessary, so it is best not to be critical of state spending in this area. I think a lot of them have basically been co-opted by money in this area, which is why their outlook is so intellectual dishonest when it comes to spending on the warmaking capacity of the state.

    and

    3. I wish that K. Carson was a frequent commenter here. Good candidate to replace Mr. Gillespie, really.

  72. The Sri Lankan case, is in fact, “Bullshit”. Klein sort of makes the whole thing up. I was born in Sri Lanka and I live in the country.

    What happened in Sri Lanka was that after the Tsunami, the Sri Lankan government decided to enforce a long-standing, long-ignored law of having a buffer zone of 100 meters from the sea. The government claimed that if the law was respected, many lives would have been saved. Indeed, it could have.

    But everyone and their uncle opposed the move, and it was sucessfully reversed.

    The decision to introduce the buffer zone had nothing to do with the world bank, the IMF, or any of the other “evil doers”. In fact, had the law came into effect, most Hotelliers would have had to abandon their business, they were amoung the first to protest.

    The vacated land would have then belonged to the state, sure there was the possibility of the lands being transferred for tourism in the future, but that would be illegal and it never entered into the discussion. If at all, the law was disaster socialism, not capitalism.

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