Why I am Not a Libertarian

Kevin Carson has made an excellent case for the connection between Libertarianism and distributism. (Of course, I do not mean here the caricature of libertarianism that has predominated since Ludwig von Mises; that kind of libertarianism is simply silly.) Nevertheless, I do have some critiques which keep me from being a whole-hearted libertarian.

The first criticism I would offer has to do with the efficacy of the pure price system. Libertarians tend to believe that all externalities are the result of govmint action. (Externalities are the costs of a transaction not borne by the parties to the transaction, but placed on some third party who is not involved. Pollution is an example of an externality.) Yet I question that assumption. One can easily undercut the market by, say, developing a cheaper manufacturing process which merely dumps the hazardous wastes into the nearest stream, causing hardship for those down river. There is no reason, that I can see, to assume that such externalities are impossible without govmint, and many reasons to believe that the absence of a public authority will encourage such externalizing. Indeed, without monitoring, how is anybody to know that it is happening? And if monitored, how is anybody to put a stop to it without some sort of government? Now, I am a believer in market pricing, but I am not a believer in the theory that the market price encodes all information about a product. As long as their are externalities, or even the possibility of such, will there not be required a political process (call what you will) to arbitrate the externals and assign costs? But such a function turns out to be complex and hence problematic in terms of Libertarian anarchism.

The second critique is the absence of distributive justice. Mutualism, as Kevin presents it (and I may be wrong here) relies (as does neoclassical economics) on corrective justice only, on free contract. But contracts arbitrate power, not productivity, not a contribution to the productive process. That is the whole reason that the formulas of marginal productivity do not work: they marginalize not productivity but power. Any glance at the difference in pay scales between the CEO and the line worker, between the sweatshop seamstress and the owner confirm that power is the key, not productivity. earns 500 times more than the line worker not because he is 500 times more productive but because he is 500 times more powerful; the seamstress in a sweatshop will be given a pittance not because she lacks productivity but because she lacks power. A glance at the statistics on the increase in productivity compared to the flatness of the typical wage shows the same thing. A contractual system, apart from a prior notion of distributive justice, will end in power being arbitrated, for that is what contracts do. Now, you can reasonably reply that a notion of distributive justice is satisfied by usufruct of land, and that will be true to a large extent, but not completely, because land is not the only factor of production. There will be many opportunities to cheat, which brings me to the next critique: you have not accounted for sin.

I am not so dogmatic as to insist on a notion of sin in a theological sense, but I think we can all agree that people have a tendency to try and profit at the expense of others, a desire to earn a surplus profit. Oddly enough, this is not really a desire for gain in terms of money, but in terms of power. For it is easy to show that everyone would be better off in an economic sense in a mutualist system. However, economic betterment is not the issue; power is. The pure joy of being able to lord it over your neighbor holds an irresistible attraction for at least some people, and maybe more than we think.

All of these things are problematic, are they not, for anarchism. Men have always had govmints not because of flawed thinking, but because of practical problems. The community has a role in all these affairs for all of these reasons, but a freely contracting society would have difficulty in handling them, would it not, because they cannot be subsumed under contract. Therefore, corrective justice alone is insufficient, and economics must also be political economy.

Which brings me to by last critique, and that is that contract, social or otherwise, does not exhaust the nature of man; it is too individualistic, while man is social. We are called into being by the ready-made community of family, and we receive a series of gifts which are purely social in nature and not exchangeable: language, nationality, custom, moral sense, etc., are all gifts outside the exchange system and cannot be accounted for by that system. Yet the exchange system relies on them and cannot exist without them. Therefore, a better description is needed.

Having said all that, I do not wish to over-emphasize the critique; I do not wish to make distributivism and mutualism mutually incompatible, for they are largely variations on a theme, a theme of freedom. But I think it useful to point out that the vulgar libertarians, when they defend pure corporations and even monopolies (as they do), are not as inconsistent as some might think them. If free contract is all, then a group may freely contract to oppress or gain some non-market advantage. If absence of govmint interference is the only standard (and anarchism lends itself to that interpretation) then there can be no govmint or even community to put a stop to it. We begin (and end) in non-contractual communities, and this fact about humans, this social fact, has to be accounted for in the social systems, and economics is certainly a social system.

3 comments:

Kevin Carson Wednesday, September 5, 2007 at 12:10:00 PM CDT  

Thanks for inviting me to post, John, and for the thoughtful comments in your follow-up post as well.

A couple of points.

1) Re externalities, most market anarchists (including the anarcho-capitalist followers of Rothbard) see tort law as a powerful weapon against externalities. So the absence of a "public authority" (in the sense of a body that claims the sole right to initiate force on behalf of the public welfare) obviously does not, as market anarchists understand it, rule out the assignment of civil damages to polluters.

2) I fully agree that a great deal of marginal productivity, under
state capitalism, represents simply the power of privileged factor owners. In fact, I made a similar argument for the circular nature of theories of marginal productivity in the value theory section of Mutualist Political Economy. But the power you refer to came from somewhere, and that somewhere is not a free market. I would argue that in a genuine free market, absent the monopoly rents on land and capital resulting from privilege, those concentrations of power wouldn't exist in the first place. The monopoly power that defines the "marginal productivity" of land and capital is the direct result of state intervention in the market to enforce special privileges for land and capital.

Anonymous,  Sunday, September 9, 2007 at 1:43:00 AM CDT  

In general and in theory, governments aren't the only possible cause of externalities. However, they are naturally prone to it from their habitual practice of using unhypothecated taxes and consolidated revenue, which breaks any nexus in their activities between activity and beneficiary. Furthermore, where there is any other kind of externality, governments usually move in and so turn them into government externalities. For instance, other things being equal, large enough layoffs and downsizing create Vagrancy Costs, with vagrants roaming around seeking subsistence and often resorting to crime, which means costs to everybody else, both directly and from their costs of precautionary defence. Enter governments; police are used, prisons filled, and unemployment benefits paid out, in proportions varying with the culture. Vagrancy Costs are replaced with Social Security Costs, falling on the tax base because of government mediation. Vulgar Libertarians confuse this with government causation, partly because governments do cause externalities too. They then erroneously conclude that eliminating government intervention would eliminate the externalities, overlooking the possibility that the displaced externalities might return (perhaps after a deceptive time lag in which there were no apparent problems).

I may post more later on the other issues raised about anarchism, but time and space do not as yet permit.

P.M.Lawrence (temporarily anonymous while between ISPs).

Anonymous,  Monday, September 10, 2007 at 1:20:00 AM CDT  

"Indeed, without monitoring, how is anybody to know that it is happening? And if monitored, how is anybody to put a stop to it without some sort of government?"

That is an example of how we don't come to this as a blank slate, but that we come to this with preconceptions about how to handle things. In this case, your default idea is of a central governing body. But there are other possibilities that don't come so readily to the modern mindset, decentralised regulating bodies with limited remits like mediaeval guilds, for instance (and that's not the only alternative).

"Now, I am a believer in market pricing, but I am not a believer in the theory that the market price encodes all information about a product."

Actually, a time series of all prices does encode it, but deeply hidden. A fully functioning free market does respond - over time - to maintain optimality, unless of course that isn't fast enough because of being too far off optimum or if there is external distortion. Both of those exceptions apply today.

"The second critique is the absence of distributive justice. Mutualism, as Kevin presents it (and I may be wrong here) relies (as does neoclassical economics) on corrective justice only, on free contract. But contracts arbitrate power, not productivity, not a contribution to the productive process. That is the whole reason that the formulas of marginal productivity do not work: they marginalize not productivity but power. Any glance at the difference in pay scales between the CEO and the line worker, between the sweatshop seamstress and the owner confirm that power is the key, not productivity. earns 500 times more than the line worker not because he is 500 times more productive but because he is 500 times more powerful; the seamstress in a sweatshop will be given a pittance not because she lacks productivity but because she lacks power. A glance at the statistics on the increase in productivity compared to the flatness of the typical wage shows the same thing. A contractual system, apart from a prior notion of distributive justice, will end in power being arbitrated, for that is what contracts do."

Again, that only applies if you are away from the optimum as we are today. Near the optimum, most people have enough access to independent resources and the rest are few enough in number and materiality that independent associations, including charitable ones and individual charity, can cope.

"All of these things are problematic, are they not, for anarchism. Men have always had govmints not because of flawed thinking, but because of practical problems. The community has a role in all these affairs for all of these reasons, but a freely contracting society would have difficulty in handling them, would it not, because they cannot be subsumed under contract. Therefore, corrective justice alone is insufficient, and economics must also be political economy."

You are describing the fuel for combustion but the ignition source is indeed flawed thinking. People have indeed responded to lack of control by exploiting, but mainly because they had that option in mind, as with the looting during the 1920s Melbourne police strike; but that wasn't the norm in societies that didn't have centralised policing - ones that "policed" in other ways.

"Which brings me to by last critique, and that is that contract, social or otherwise, does not exhaust the nature of man; it is too individualistic, while man is social. We are called into being by the ready-made community of family, and we receive a series of gifts which are purely social in nature and not exchangeable: language, nationality, custom, moral sense, etc., are all gifts outside the exchange system and cannot be accounted for by that system. Yet the exchange system relies on them and cannot exist without them. Therefore, a better description is needed."

You might like to consider how the Feudal System really worked, in its early days when it was developing and its middle period before it got captured. Superseding barbarian clan systems and civilised central government, it was a non-cash contractual system backed by the sanction of honour (if you broke a promise, you wouldn't get another; also, you exchanged a promise for a promise, unlike the keeping of a promise for the keeping of a promise as understood by modern contracts - unless you specified that in your own promise). The myth of feudalism relates partly to the late captured version and partly to the post-feudal arrangements that bought out entrenched feudal interests.

"If free contract is all, then a group may freely contract to oppress or gain some non-market advantage."

Yes, e.g. Vikings or the East India Companies. So? Yet other possibilities exist, and have evolved in other times and places, so that is not the only form of free association - and the less short term exploitation variants outcompeted that. See discussions of strategies for iterated Prisoners' Dilemma, e.g. the tit-for-tat strategy.

"We begin (and end) in non-contractual communities, and this fact about humans, this social fact, has to be accounted for in the social systems, and economics is certainly a social system." No; not "and end", anyway. Not everybody is such a social animal as all that, and any approach that builds it in is as Procrustean - one size fits all, harshly - as any individualist anarchism that leans too far the other way and rules out any form of association.

P.M.Lawrence (temporarily anonymous while between ISPs).

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