2007-01-22

Libertarian Strikes Back

Here are my responses to a post by capitalistimperialistpig. The original post is accessible by clicking on the title.

The most pointed critique of social security and liberalism in general is the libertarian critique. The problem with libertarians, for a liberal, is that we have too much in common. We both believe in individual rights, tolerance of individual differences, and dislike government prescription of religion. The basic difference, it seems to me, is the different answers we give to Cain's (with thanks to the Captain - my original version had the corpse asking the question!) famous question: "Am I my brother's keeper?"

Actually, the question "Am I my brother's keeper" is a matter of personal conscience, not a political question at all. The question on which I differ with socialists and modern "liberals" is "should the state force me to be my brothers keeper above and beyond the dictates of my conscience". This comes down to your assumption below that libertarians are opposed to slavery. Yes, we are. It is nice to run across a liberal who actually states (rather than implying) that he is not. It clarifies things when you admit what you really believe: that you have the right to enslave your neighbor in order that his life can be spent in pursuit of your goals, rather than in pursuit of his own.

That's not really my basic bitch against the libertarians though. My real complaint is the same as my complaint against most religion - its premise is a fraud. For those who can't stand to wait for the punchline, I believe that trying to implement libertarian principles leads to tyranny or social disintegration. Demonstrating that takes some historical (and pre-historical) context.

The premise of libertarianism is as follows: you own yourself. In what way is that premise fraudulent?

For all but the last 15,000 or so of the 100,000 years the human species has existed, all humans lived in a sort of libertarian paradise - no government, no organized religion, and few social constraints on behavior. A few lived that way until very recently. In many places people were able to achieve a kind of equilibrium with their environment, with population naturally controlled through homicide, infanticide, and starvation.

I'm afraid you've mistaken us for anarchists. There are good arguments for anarchism, but I am not entirely convinced by them, so I will defend your target of record, Libertarianism, not your straw man, Anarchism.

Clearly, humans are well adapted to that kind of life, so its no wonder libertarians would like to recapture that. The catch - there's always a catch - is that they don't want to give up the comforts of civilization.

No, we want to completely realize the benefits of civilization by removing fraud, force, and the threat of force from human interactions except in self-defense. That process has been started, and the USA is (as of yet) the closest any human society has come to that ideal, but we are not there yet, and have been regressing since the Great Depression from Republican (not the party, but the type of government) limited government to "my gang is bigger than your gang" pure democracy.

Hobbes and Jefferson had somewhat different ideas about the proper role of government in civilization, but I think we now have some historical perspective on actual as opposed to theoretical development, so that will be my approach. The serpent in the above described libertarian paradise appeared in the form of horticulture and the settled life it required. Hunter gatherers have no property but that which they can carry with them, so their wives and daughters are almost the only things they have worth stealing. Farmers have property - stored food, dwellings, and tools too big to lug around much. They also develop population densities large enough to become a menace to their hunter gatherer neighbors and each other. Thus, the necessity for organized defense.

Of course.

It's doubtless natural to be willing to fight in defense of one family and property, but it's decidedly unnatural to lay one's life on the line for the neighbors. Consequently, tribal and larger societies develop an array of strategies to compel service in the common defense, including elaborate patriotic social structures, organized religion, professional armies, and, or course, the naked threat of violence against non-participants. Military organizations inevitably partially enslave their members.

Why are societies formed in the first place? The answer is that organized defense is more effective and more efficient than disorganized defense. Thus the best way to defend your family and property is to join in the common defense of your nation. This is unnatural, in that animals would not generally do it, but one must understand that humans have one natural defense that animals lack: reason. Without that, we are lost.

I'm pretty sure libertarians oppose slavery in principle, but how can you have armies without it. The

Yes, we do! You can have armies without slavery by making your society worth defending. Worth defending to whom? To those who are asked to defend it. I will agree with you, however, that a society not worth defending must resort to armies of slaves.

only good defense anyone has found so far is the republican form of government. Unfortunately, as the history of Greece, Rome, Florence and many others shows, the Republic is fragile. There are number of diseases that afflict the Republic, as Adams and others among the founding fathers noted. One of the most pernicious is the concentration of wealth and power in a few dynastic families. Libertarians, at least our current Rand influenced version, seem unwilling to address this problem. Several times our ancestors found it necessary to attack this problem, by eliminating primogeniture, instituting the income tax, and inheritance and gift taxes.

Primogeniture still exists: in the U.S., at least, you are permitted to leave your entire estate to your first born child if that is what you desire. People rarely desire that, so it is rarely done. As for the income tax, inheritance tax, and gift tax, the first thing that should be noted about them is they are not wealth taxes, they are transaction taxes. Thus they do not have any effect at all on those who are living off their fortunes: they effect people who are attempting to build fortunes, thereby protecting the positions of established fortunes. So such taxes protect "the concentration of wealth in a few dynastic families". The one that comes closest to the effects you seem to want is the inheritance tax, but that is easily evaded if you can afford the lawyers to make it happen. It is again a punishing tax for the middle class, but not so for the truly rich. Two taxes that would come much closer to the goal of reducing fortunes are land taxes (http://en.wikipedia.org/wiki/Geolibertarianism) and consumption taxes (see http://fairtax.org). Of course, a libertarian society would have very little governmental spending, so taxation would do very little to prevent concentration of wealth. That is not the purpose of taxation, the purpose of taxation is to fund your (hopefully minimal) government in it's efforts to defend you against crime from within and invasion from without. The advantages of these schemes of taxation is that, unlike those you listed, they would not increase the concentration of wealth.

The most important factor in keeping wealth concentrated is regulation. A relatively unsophisticated person can run a simple business in an unregulated economy. The only thing he needs to be able to do is create something -- anything -- that someone -- anyone -- values more it's creation cost him. That is not a particularly high hurdle. 10th century blacksmiths were able to run businesses. Crack dealers are able to run businesses. Pimps are able to run businesses. Why could your average American not run a business? Regulation. In order to run a business within the law in America, one would have to have a legion of lawyers on staff. As a matter of fact, I would be surprised if any businessman told me that his business never broke the law. There are 30,000 pages of regulation in the federal registry. Not to mention state laws. Nobody can be sure at any given moment that they are not breaking the law. They just hope that if and when they get caught, they have enough political pull to avoid the penalties, or enough money to bribe the official in question. Start-ups run by poor people almost never have those resources. Again, the position of the few is protected from encroachment by the many.

The second most important factor that keeps wealth concentrated is the shortage of capital. Every job that is created costs money. When there is more than frictional unemployment (see any econ text book for explanation), the price of labor tends to be low and the returns on capital tend to be high. The market will solve this problem very quickly, if left to itself, because those high returns on capital will cause people to make a greater effort to accumulate capital. Thus the returns will (largely) be reinvested, and those who earn more than subsistence wages will be more likely to invest. These investments will create more and more jobs. Eventually, there will be more jobs than there are people to do the jobs. Employers will have to pay more in order to get people to work for them. As this happens, more people will be earning more than subsistence wages. The high returns of capital will drive some of them to invest. More jobs will be created. And the cycle will continue. The rich will get richer, and the poor will get richer. The poor will get richer faster. And that is how it should be.

Unfortunately, Socialists have misinterpreted the high returns of capital as "exploitation". So instead of letting the increase in capital exceed the increase in population, they attempt to revenge themselves on capitalists for being successful. This makes capital grow more slowly, and prolongs the process. They have not entirely stopped economic growth, but they have slowed it down. Eventually, either socialists will reverse the trend of improvement by bringing the economy to a halt, and society will collapse (bringing about the anarchy you fear) or the free market will be welcomed and understood, and the conditions of workers will improve as they generally have since the transition from Mercantilism and Feudalism to capitalism started in the 1700's. As the level of capital investment balances the size of the population, the levels of wealth will equalize themselves.

A third important factor is mercantilist/socialist policies that attempt to control the economy to benefit some groups at the expense of others. For example, corporate bankruptcies that leave the same people in power that ran the company into the ground in the first place. Chrysler comes to mind, along with others. This means that incompetents get to continue wasting resources, and the taxpayer gets stuck with the bill. Failed companies should be allowed to cease to exist. This is a specific case of the general problem of subsidies. Any subsidy, whether paid to corporations, to farmers, to bums, or to anyone else, causes less valuable uses of labor and capital to replace more valuable uses of labor and capital. Moreover, subsidies go to those with the most political pull, who are generally the richest and most powerful members of society. Again, the richest are protected from encroachment by the poorer.

There is one more feature of the world economy (and economics in general) that will slow down the process of equalization in America. Since many countries have pursued mercantilist and socialist policies even more enthusiastically than we have in America, there are countries out there with huge populations of desperately poor people. As they abandon these policies, it will be most profitable to do business where there are the greatest concentrations of poor people, and the least capitalization. But this is a self liquidating phenomenon. As people invest in poor countries in order to take advantage of the cheap labor there, they must make those countries richer (if the foreign companies were not offering more than their workers were making before, their workers would not work for them). This will begin to take up the supply of poor people in these countries. Since these new producers will want to consume (why else would they be producing), local businesses will expand or be created to provide them will things to consume. This will further limit the supply of poor people in these countries. Eventually, there will be enough wealth in these countries that there is no longer any particular reason to invest there, as their labor rates approach ours, but that is not really a problem, since their economies will be healthy and thriving. And as that happens, and standards of living homogenize in the free world, the richer countries will begin growing faster again.

This is not to say that a free society would have no gradations in wealth. Of course it would. Different people have different values, and strive for different things. Why should someone who values wealth, and is willing to earn it, have the same outcome as someone who would prefer to exert themselves as little as possible and spend the rest of their time fishing? Also, different people have different abilities, and therefore would have different levels of success. The only way that any society can provide equality of results would be to provide inequality of treatment, rather than the Libertarian ideal, the Rule of Law. But the very large differences we see today would by and large disappear, and since it would be impossible to make your money by coercing others to do business with you (through government power) or by preventing people from competing with you (through government power), we could be sure that anyone who did amass a large fortune did so by providing us with those things we most value in the highest quality and at the best price. And those are differences I can live with very happily.

As long as libertarians refuse to embrace this necessity, they are the enemies of freedom, and need to be treated as such.

As long as socialists refuse to recognize that what I create belongs to me, they are enemies of freedom, and need to be treated as such.

5 comments:

Dennis Mickley said...

This was very interesting to read, and quite informative. I have some intellectual issues with it, but that's for another time.

I wanted to thank you for reading my blog, first of all - and secondly, I wanted to say that I dedicated a post to your last comment. I'd really enjoy your input, and your point of view in response (and in general, you are very intelligent and well written.)

Thanks again.

-Dennis

cxx_guy said...

Well thanks right back for reading mine. I'll look for your post as soon as I complete my next one.

Anonymous said...

One or two brief responses to your thoughtful defense for now. I think you are quite wrong in thinking that socialists are the main ones using government to transfer wealth in society. History shows that government is usually controlled by the wealthy, and that the wealthy use that power to transfer ever more wealth to themselves.

You say crack dealers run their businesses without help from the government? Hardly! Their business could hardly exist without the government. Moreover, they find it necessary to create their own (oppressive, violent, and totally dictatorial) states within a state in order to run their businesses, complete armies and executioners.

Contrary to your accusation, I reject slavery. Of course, I'm using the dictionary definition, not your fancifull generalization of it. I also reject the notion that a "person owns himself." That's simply not possible for a social animal, and no society constructed on such a premise has ever existed.

CIP

Anonymous said...

When I said the libertarian premise is a fraud, what I meant was that the notion of a government constructed purely on the voluntary consent of all is impossible. The element of compulsion in inevitable in anything like a government - if the government will not take on that role, others will, and will become the government.

The odd thing to me, is that the libertarian fantasy is more or less the mirror image of the utopian socialist fantasy - they are built on similar misunderstandings of human nature.

CIP

cxx_guy said...

I would not disagree that socialists (in the narrow sense of Marxist or Communist socialists) are not the main people using government to redistribute wealth. They haven't the power. They just want to be the main people using Government to redistribute wealth. But if you define socialists as economists do, as those who organize economic activity by command, rather than by commerce, then all people who use government or advocate the use of government to transfer wealth are socialist, and all people who refrain from such activity are capitalist. Thus when Exxon demands government subsidies, it is as socialistic as a farmer or a bum who demands government subsidies. Socialism, to economists, is a means of organization, not a set of goals.

You are right that most socialist programs to redistribute wealth are of more benefit to those with resources than to those without them. Social Security, the redistribution of wealth from young to old, and frequently from poor to rich, is a perfect example. Private charity is generally much less susceptible to this abuse, as if it becomes widespread, grass roots support for the charity will disappear, since the donors have the choice. Of course rich people could form charities to redistribute wealth to each other, and fund them themselves, but there would be little problem with this: it's their money, if they want to play with it, it's their problem.

As for crack dealers, you are right that they could not operate their businesses as currently structured without government, as it is Prohibition which forces people to go to street dealers rather than to Walgreens to get recreational drugs. But the laws are not designed to "help" the drug trade, but to crush it. The laws are just, as most government programs are, abject failures.

Slavery is defined as "A civil relationship in which one person has absolute power over the life, fortune, and liberty of another.". I defy you to find the difference between slavery and conscription, or between slavery and socialism, except that in socialism, it is the state which has "absolute power over the life, fortune, and liberty of another". Since governments are made up of people, this boils down to the same thing.

So the question becomes, if you reject ownership of a person by others, and you reject ownership of a person by himself, who is to run the lives of people? Who has a higher claim to my life than I? Society? But society is just more people. So if Society owns us, there are two possibilities:

1) Anybody can order anybody else to do whatever they want, in which case everyone owns everyone else (except themselves)

2) 50%+1 of the population gets to own 50%-1 of the population: this is pure democracy. Note that every gang rape is moral under this standard: If you polled the group involved, there would be a yes vote from the (many) rapists, and only one no vote (from the victim). The yeas have it!

The Libertarian philosophy does not reject all compulsion. It allows force to be used in self-defense. I can morally force you to leave me alone. I just cannot morally use force to rob, rape, or murder you.