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Title: Libertarian Self-Marginalization Author: Kevin Carson Date: March 10th, 2008 Language: en Topics: c4ss, libertarianism, critique Source: Retrieved on 1st September 2021 from https://c4ss.org/content/11798
Go to the average mainstream libertarian venue on any given day, and
you’re likely to see elaborate apologetics for corporate globalization,
Wal-Mart, offshoring, Nike’s sweatshops, rising CO2 levels, income
inequality and wealth concentration, CEO salaries, Big Pharma’s profits,
and Microsoft’s market share, all based on the principles of “the free
market”–coupled with strenuous denials of all of the perceived evils of
corporate power because (as Henry Hazlitt explained at some place or
other in Economics in One Lesson) the principles of the “free market”
won’t allow it.
The last item is what I call “vulgar libertarianism.” It refers to the
inability of some libertarian commentators to remember, from one moment
to the next, whether they’re defending free market principles as such,
or simply making a cynical apology for the interests of big business and
the plutocracy cloaked in phony “free market” rhetoric. The vulgar
libertarian comentator will often tip his hat, in principle, to the
existence of corporate-state collusion, and admit that the present
economy deviates from a free market in many ways that work to the
benefit of big business. But shortly after, he will switch gears and
proceed to defend the existing size and wealth of big business on the
basis of “how our free market system works.” The vulgar libertarian
argument depends on taking an equivocal position as to whether or not
the existing corporate economy is a free market, and then shifting
ground back and forth in a such a way as to make the argument come out
in big business’s favor.
A good example of this appeared recently on Mises Blog: “A Marketplace
to Loathe.” I should mention, up front, that the author himself
(Christopher Westley) has acknowledged corporate rent-seeking in other
posts. He acknowledged in the comment thread that corporations in league
with the state could be a menace, and apologized for having possibly not
made that clear in his post. He also explained to me, in a very civil
email, that the target of his attack was the unquestioned liberal
assumption that corporate power is the normal product of a free market,
rather than of government intervention in the market. And he reassured
me that, unlike many commenters in the discussion thread under the post,
he did not regard my objections as nit-picking. So let me be clear that
I don’t regard his argument as either malicious or deliberately
dishonest (although I have considerable reservations about some of the
commenters).
Nevertheless, his original article itself does not include any of the
nuances that he stipulated to after the fact. It does not even raise the
question of whether or not this is a free market, or treat it as the
point at issue between libertarians and liberals. On its face,
therefore, his original argument is a vulgar libertarian one.
The subject of his post was a commentary on NPR’s Marketplace program.
Here is the bit he quoted:
I have one plea. Could you please do what is necessary to restore our
faith in the corporations of business, a faith that has been so damaged
in recent years? The tall towers that house our corporations are the new
palaces of our day, the places where real power resides, but those
towers are full of paradoxes. Made of glass, you can’t see inside.
They’re pillars of our democracy, but they are run as totalitarian
states. Their names are reduced to a set of initials. Their leaders are
unknown to those outside. They are accountable, for the most part, to
other institutions that sit in similarly anonymous towers. To the
average person, they are foreign entities shrouded in mystery. It is no
wonder that we look at them with suspicion, touched with envy.
Westley’s response:
…[E]ven the largest corporation has no power over the individual unless
the individual grants it, so… the consumer can thumb his nose at General
Motors and GM can do nothing but try harder to please him in the future
if it wants his business.
Even though it’s tangential, by the way, I can’t refrain from commenting
on Westley’s characterization of Marketplace as a “Marxist business
show” and his reference to the commentator–Charles Handy–as
“commie-of-the-day.” According to the “Marketplace” homepage, Handy is a
“London Business School founder and Claremont Graduate University’s
Drucker School of Business Professor…” This leads me to believe that
however much Handy may support the interventionist state, he’s not doing
so from a Marxist perspective. (Just as the British propertied classes
who argued for Enclosure, on the grounds that the laboring classes could
only be forced to work harder if they were kicked off their land,
probably weren’t Marxists either.) Roy Childs’ observation that liberal
intellectuals have been, historically, the running dogs of Big Business,
is probably closer to the mark. I think it’s safe to say that Handy
views as normal a society in which large corporations are “the pillars
of our democracy,” and simply wants to stabilize that corporate rule.
And for all his no doubt sincere belief in his own progressive
motivation, most of the “reform” measures he advocates amount in
practice to what New Leftist Gabriel Kolko, in The Triumph of
Conservatism, called “political capitalism”:
Political capitalism is the utilization of political outlets to attain
conditions of stability, predictability, and security–to attain
rationalization–in the economy… [By rationalization] I mean… the
organization of the economy and the larger political and social spheres
in a manner that will allow corporations to function in a predictable
and secure environment permitting reasonable profits over the long run.
I’m sure Handy does see the bad aspects of corporate power as resulting
from the unregulated marketplace (as opposed to seeing all corporate
power, and the state intervention that causes it, as bad in themselves).
But the issue didn’t even show up in Westley’s post. He simply quoted a
reference to totalitarian corporate power, and then argued that it can’t
exist because that’s not how the “free market” works (that’s works,
present indicative, not would work). His later clarifications
notwithstanding, his original post simply quoted a reference to
corporate power and responded with a counter-assertion that corporate
power cannot exist–because the “free market” won’t allow it.
At any rate, that was the gist of my comment under the post:
GM and other corporations can (and DO!) also act in collusion with the
state, to erect market barriers and limit the range of competition.
So in fact what you should be saying is not that the largest corporation
“has no power,” but that the largest corporation “WOULD have no power in
a free market.”
And since this isn’t a free market, but rather (as Rothbard said) a
corporate state that subsidizes the accumulation of capital and the
operating expenses of big business, the radio commentator was entirely
correct about the power exercised in those corporate towers.
You should figure out what your actual purpose is: defending free market
principles as such, or just defending the profits and power of big
business under the guise of “free market” principles.
Several regular Mises Blog commenters immediately reacted to my
criticism, in the same way they’d react to a turd in the punchbowl. One
of them came up with this gem:
When are you going to get past this same, tired argument? Must the
authors qualify every statement? Is this a scholarly journal or a blog
article?
Yes, Kevin, we don’t live in a free market.
Yes, Kevin, many (if not all) corporations do lobby for and accept
handouts.
Oh wait, whats that? Its a Wal-Mart article you haven’t chastised for
its lack of “this isn’t a free-market” qualifications. Go chase it Fido!
Bye.
While I think it’s justifiable to credit Westley for his honesty and
good intentions, the commenters are a different matter entirely.
I’m utterly amazed that 1) a commentator can make a reference to
corporate power; 2) a critic can dismiss him as a “Marxist” on the
grounds that corporate power can’t exist in a “free market”; and 3) the
critic’s defenders can dismiss the question of whether a free market in
fact exists as a quibble and distraction, and accuse the person raising
it of marring the symmetry of the critic’s pretty argument with a bunch
of nasty old facts. When Party A refers to the existence of corporate
power, and Party B makes the counter-assertion that corporations can’t
have (not “couldn’t have”) any power in a free market, the question of
whether in fact a free market even exists is not a mere quibble. It is
the central point at issue in determining whether Party A’s contention
is right or wrong, and whether Party B owes him an apology.
But let’s look at all this in broader terms. Although Handy did not–in
the passage quoted by Westley–explictly treat corporate power as the
natural outcome of the market, or argue for state intervention as the
only way to prevent it, he did strongly imply it in the full commentary
from which it was excerpted. But Westley did not make the extent of
government’s role in corporate power the subject of his post; he simply
denied, flat-out, that corporate power existed, based on the way the
market operates.
But what if Handy does, as I think likely, implicitly assume (what I
regard as the typically vulgar liberal assumption) that the free market
results in corporate power unless the state intervenes to prevent it:
what, then is the most effective response, if our goal is to promote
libertarian ideas in society at large? Not, as Westley did, to
reflexively defend the honor of big business and deny that corporate
power exists.
The most effective response would be something like this:
I agree with you that corporate power exists, and share your concern
with its evil effects, but I believe you’re mistaken about its causes
and remedy. The evil effects of corporate power result, not from
government’s failure to restrain big business, but from government
propping it up in the first place: this government support includes
subsidies to the operating costs of big business, and protection of big
business from market competition through market entry barriers,
regulatory cartels, and special privileges like so-called “intellectual
property.”
A libertarian movement that dismisses the public’s concerns about very
real problems, apparent to anyone with eyes in their head, with
doctrinaire denials that they exist or can exist, is a libertarian
movement doomed to irrelevance.
Here’s what Mises wrote, in Epistemological Problems of Economics, about
apparent conflicts of theory with experience:
If a contradiction appears between a theory and experience, we must
always assume that a condition pre-supposed by the theory was not
present, or else there is some error in our observation. The
disagreement between the theory and the facts of experience frequently
forces us to think through the problems of the theory again. But so long
as a rethinking of the theory uncovers no errors in our thinking, we are
not entitled to doubt its truth.
The vulgar libertarians, however, question neither their application of
Mises’ theory nor their understanding of the facts. Instead they
challenge us: “Who’re ya gonna believe: Mises or your lying eyes?”
We all know that corporate power exists. Any libertarian movement that
hopes for anything more than self-marginalization must directly address
the common sense perception that corporate power exists, and the public
concerns that stem from the fact, and explain why the market is the good
guy and the state the bad guy on the issue.
The approach I see in all too many mainstream libertarian venues is the
moral equivalent of saying to someone whose house is burning down, “Your
house can’t be burning down because houses can’t burn down without
oxygen, you dirty commie!”–and then dismissing as “quibbling” the
question of whether there is in fact oxygen in the air.
We live in a society where the evils of the state-corporate nexus,
resulting directly from the corporate size and power it promotes, are
the central issues of concern to the average person. Far too large a
portion of the current libertarian movement dismisses these concerns as
motivated by “economic illiteracy” (although their own pro-corporate
apologetics are, if anything, more open to that charge), and then passes
on to what it regards as the real problems of injustice crying out for
solution: uppity union workers, welfare moms wallowing in luxury on
their food stamps, and “trial lawyers.”
For too many mainstream libertarians, the evils of corporate-state
collusion are something to tip one’s hat to, and corporate welfare is
kinda sorta bad, in principle, I guess, and maybe we oughta do something
about it someday…. But welfare that helps the poor, instead of the rich,
is Flaming Red Ruin on Wheels!
And as historically illiterate and illogical as some of the commenters
at Daily Kos can be, when they make their facile “pot-smoking
Republicans” dismissals of libertarianism, when you get right down to it
mainstream libertarians have only themselves to blame. Rather than
addressing the historical illiteracy and illogic with reasoned arguments
along the lines I described above–the role the state has played in the
creation and preservation of corporate power, and how the market
threatens it–mainstream libertarianism simply denies that corporate
power exists at all, and backs up that position with equal historical
illiteracy and illogic of its own. If I thought “free markets” and “free
trade” really meant what neoliberal talking heads mean by them, I’d hate
them too.
Indeed, there is a great deal of mirror-imaging between the vulgar
libertarian and vulgar liberal interpretation of history. Both the
typical denizen of Mises Blog, and the typical Daily Kos commenter,
would agree that the giant corporations of the twentieth century emerged
from the “laissez-faire” market of the nineteenth, and that the
twentieth century mixed economy emerged as an attempt to restrain big
business. Their only area of disagreement is over whether big business
or big government is the “good guy.”