Libertarians ought to be in favor of redistribution. Especially ones with bleeding hearts.

Not redistribution by the state, to be sure. A state with the power to redistribute wealth is a state with the power to tyrannize. In addition, there’s no reason to trust the state not to use redistributive power to enrich the wealthy and well connected at everyone else’s expense—after all, despite what its press clippings might suggest, the state is not interested in ordinary people’s well being. Further, the knowledge that state might exercise redistributive power could introduce destabilizing uncertainty into the economy. Forcible redistribution by the state has the potential to reduce overall economic productivity. To a significant extent, it’s arbitrary: why should one group of recipients be chosen over another? And it obviously interferes with people’s autonomy.

But redistribution by the state is hardly the only conceivable kind. The kind libertarians ought to favor includes five elements:

1. The elimination of privilege. Existing market structures feature a broad range of privileges that shift resources into the pockets of the wealthy and well connected—while making and keeping others poor. Think occupational licensure, patents and copyrights, zoning laws and building codes, the use of eminent domain to benefit developers and their clients, transportation subsidies, and tariffs, just for starters. Ending these privileges would shift resources away from those who benefit from them and improve the economic positions of many poor and middle-class people. 

2. The operation of a freed market. When privileges are absent, capitalization costs are lower, and more people can enter the market. The result is more enthusiastic competition—and, of course, the practical effect of competition is to reduce profit margins and to make it harder for people to preserve entrenched economic positions. Freeing the market is itself an act of revolutionary redistribution, because, as Jeremy Weiland emphasizes, the free market will “eat the rich.”

3. Acts of solidarity. Just because forcible redistribution by the state is problematic for multiple reasons doesn’t mean bleeding-heart libertarians should be anything but enthusiastic about wise acts of solidaristic redistribution—choices, that is, by people to share their resources benevolently with others. (Benevolence isn’t just the province of statists: among libertarians, it’s been defended even by neo-Objectivists like David Kelley and Tibor Machan.) When people give without compulsion by the state, their giving needn’t dampen their productivity. And they can ensure that it’s more effective than redistribution by the state, too. Solidaristic redistribution can be very effective as a response to accident, disaster, and ill fortune.

4. Radical rectification. The state engages in theft on a grand scale. Its cronies steal too, frequently with its blessing. Some obvious examples: the theft of land in Latin America from those who worked it—converted through violence from rightful owners to tenants and the use of eminent domain to take land from ordinary people in order to enrich the state’s corporate cronies. Land stolen in this way can and should be reclaimed by its rightful owners—without compensation to thieves. 

5. Radical homesteading. Even when it doesn’t steal identifiable assets and pieces of real property from particular people, the state uses its power to take resources that don’t belong to it and to use stolen money to fund its own activities and those of its cronies. Consider, for instance, the arbitrary expropriation of vast tracts of land in colonial North America (and in the newly minted United States as well) by political authorities who proceeded to parcel it out to their cronies. Or think of the ways in which the state funnels huge sums of money to the military-industrial complex or to universities that maintain cozy relationships with the “defense” establishment. There are no specific, rightful owners of unjustly engrossed land and unjustly funded businesses or universities. But they can reasonably be regarded as unowned, and ripe for homesteading. These stolen assets should be redistributed by being claimed by ordinary people willing to occupy them, people whose just claims other should be quite willing to support.

Bleeding-heart libertarians have good reason not to favor redistribution when it’s carried out by the state. But they should favor redistribution that involves free acts by free people. Eradicating legal privileges, fostering the operation of liberated markets that disperse sedimented wealth, giving generously, supporting the return of stolen assets, and endorsing the homesteading of land and facilities unjustly claimed or funded by the state can all contribute to the rectification of injustice and the management of risk. These are all varieties of redistribution libertarians ought to embrace.

 

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  • Hyena

    Some of this goes back to a basic problem with libertarianism: if we want to have a decent libertarian world, it has to be populated by The New Libertarian Man, who is wiser and more moral than his forebears.

    • http://justen.us Justen Robertson

      A horrifically indecent libertarian world would still lack the wanton atrocities committed by statists in the name of progress and empire. Why wait for the new libertarian man, the “leave me the fuck alone if you don’t want to get shot” libertarian man is vastly superior to the “I’ll save you from dictatorship by blowing you to pieces and I’ll save you from drugs by putting you in a cage and I’ll save you from poverty by making you a slave” progressive man.

  • http://aaronmclin.blogspot.com/ Aaron

    Isn’t that always the case, Hyena? So far, no human institution has been able to make itself proof against the malicious or misguided intentions of humans. Were libertarianism to really be the exception to that, only mass mental illness could explain the choice not to adopt it.

    I like these ideas, but #4 will be problematic. What does one say to the man to whom the thief has sold the land, once the thief is no longer there? And Latin America is not the only place in the Western Hemisphere where governments engaged in the wholesale expropriation of lands from rightful owners. I don’t know how you correct that at this point without creating more hard feelings than it’s worth.

  • Fernando R. Tesón

    Great post, Gary. Your point reveals, I think, how skewed the rhetoric is in today’s political environment. When progressives criticize existing “markets,” what they criticize is not free markets but perverse regulations, such as the ones you enumerate. Because they pretend to be criticizing true free markets, they invariably propose to give even more power to the state. When conservatives defend “markets” they don’t really mean free markets, but markets for everyone else except for them, who benefit from these outrageous privileges.

  • http://homebrewindustrialrevolution.wordpress.com Kevin Carson

    Aaron, in the case of the hacienda system in Latin America I think most of the land is still held by the heirs of the original thieves.

  • Aeon J. Skoble

    This is excellent. But I don’t see why that’s evidence of a bleeding heart, as opposed to just good libertarian principles and benevolence. My prediction is that the left will reply “but people won’t do that, so we need the state to force them to do it.”

  • http://hnn.us/blogs/4.html Mark Brady

    Is “redistribution” the best term to use?

    And, yes, I agree with Aeon, your proposals are much more to do with sound libertarian principles and benevolence than with bleeding hearts.

  • Dan Kervick

    Gary,

    This is the kind of libertarian post that calls forth my Benthamite muse to decry “nonsense upon stilts.” The whole outlook expressed here seems to depend on what are to my mind utterly superstitious and unfounded mythic beliefs in the existence of pre-social, pre-political “rights” and “claims” that are not anchored in the determinations of any actual political community and its governing institutions and conventions.

    When libertarians and anarchists start ranting and raving about “the state”, I am never quite sure I understand what they are talking about. But assuming you are in this case just talking about systems of government, I would point out a few things about the strained dichotomies at work in your list of redistributive goals:

    1. Redistribution of wealth accomplished through the elimination of privilege requires the changing of numerous laws. You, yourself, list several such laws establishing privileges that you believe ought to be eliminated. Laws are the work of government. Thus redistribution of wealth accomplished through the elimination of privilege is thus redistribution by government. Similarly, preserving a more equal distributive balance once the present unsatisfactory balance is rectified will also require energetic governance, since an anarchic condition free of governing institutions does not remain in an egalitarian equilibrium, but is an explosively unstable condition characterized by plunder, murder, violence, rampant taking and enslavement and the rapid evolution of tyrannical and highly unequal systems of domination.

    2. Free markets do not eat the rich. Competitive markets do help to keep the imbalanced growth of riches in check. But competitive markets can only be preserved by energetic governmental vigilance. The natural tendencies of markets that are initially both competitive and free is to evolve rapidly away from competition and toward oligopoly and monopoly, at which point the monopolists and oligopolists use their material power, exercised both directly in the market and through the capture of the institutions of government, to establish special privileges for themselves, limit competition, fix prices and erect barriers to entry. If you want to preserve sustainable competitiveness, and ease of entry and equality in markets, you will need a broadly-anchored democratic government exercising a strong regulatory hand.

    3. Small families and villages, perhaps, can effect solidaritistic redistributions without relying much on administration and enforceable rules. But outside the very smallest human communities, solidaristic redistribution of wealth requires organization and administration in the community. We call these institutions for organization and administration “government”. The tremendous value produced by the cooperative governing work of any sophisticated, materially and culturally advanced community requires the establishment and enforcement of rules. Some people will have reasonable objections to these rules, and will seek either to change them through the established institutions of governance, or to effect more far-reaching changes in the institutions themselves. But of course, many children, and a few cranks, don’t like rules at all, and will never be happy with them. They will project their massively narcissistic egos and sense of entitlement onto the cosmos, and experience every demand placed upon them as a violation of some cosmic “right”.

    4. The government of a democratic community rarely “steals” – not unless it violates the property laws which that government has itself established. A democratic community establishes laws through broadly accepted democratic and representative procedures, and then requires that the members of the community adhere to the rules and dispositions that the community has established. Those who cannot accept the obligations and emotional burdens of living in a democratic community, where the vast majority of the rules are generally known to all and are transparent, really should consider leaving that community and living somewhere where no one will bother them. I believe there are several Pacific islands where this is still possible, as well as very isolated locations within traditional jurisdictions where one will for the most part be left alone. But if one insists on living in a community and enjoying the manifold benefits of cooperative social life, then one really ought to accept emotionally the necessity of adhering to the community’s requirements.

    5. It is hard for me to treat your radical homesteading idea seriously. If you want to take some land that is currently in the possession of the public and is either administratively regulated by the public’s government or bestowed by that government’s laws upon a private owner, you will need to employ weapons or some other substantial means of coercive power in order to effect that unlikely transfer from the public to yourself. Apart from the idleness of this proposal, it is hard for me to understand the foundation of your moral conviction that your violent act of taking this land is any more just than the coercive actions that you presume were involved in establishing the public’s sovereign control over it in the first place. Your imperious moralistic distinction between the “state and its cronies” and “ordinary people” seems utterly childish. You appear to believe you are in enthusiastic communication with some god who has revealed to you the true and rightful owners of the world’s goods.

    People have always taken what they want when they have had the power to do so. Piracy, pillage, enslavement and dispossession are commonplaces of human history. In the absence of political organization and rule-making, there is no right or wrong in this. But it is a most miserable, brutal and horrible condition of living. The establishment and preservation of durable property rules and conventions requires participation in organized political action and the establishment and preservation of governing institutions. Once rules of property have been established, preventing powerful individuals or coalitions of individuals from engaging in what is then subsequently deemed stealing can only be accomplished by even stronger and well-ordered communities that cooperate in wielding coercive power so that the many can repel and deter the predations of the few.

  • Michael Drew

    What about achieving redistribution (as well as other functions of government) through the state – via voluntary contributions from those with great resources to the state. This could be done simply by removing the coercive threat from tax collecting. Could still set agendas and goals, and act as a central clearinghouse for redistribution, but it would just function to the extent that desire for such things actually exists among those with resources. my fear about rejecting government redistribution is just that institutions of redistribution other than the government are extremely undeveloped and spotty in our society. Getting rid of government redistributive institutions would I believe cause a great decline in the actual amount of redistribution that occurs. In other words, at scale I don’t think there is a redistributive mechanism that exists to rival government right now — and whatever arguments one wants to have about government causing that problem, it remains a fact that anyone who desires to do redistribution at a significant level (which this post I think fairly needs to be interpreted as saying in order to live up to the “BH” portion of the BHL name) needs to take into a account. Generous wealthy people interested in redistribution have little reason not to favor the continuance of existing redistributive structures if their main objection to the status quo is simply the coercive element of government redistribution. Obviously reforms could be pursued, and in a world of voluntary state funding, those who fund the government would likely have great sway over what it did. But I think it is unlikely that, if redistribution is really a goal embraced by BHLs, they would find it desirable to introduce a radical discontinuity into our existing redistributive structure, given the option to simply voluntarily maintain it with the power to introduce reforms borne of that new role in its maintenance. I’d suggest BHLs should embrace the idea of the abolition of coercive power in the collecting of taxes as a means to maintain the institutions of redistribution, given the immense unknowns about redistribution in a world where those institutions have been dissolved.

    There are enough wealthy people to fund the government voluntarily in such a way as we could find out exactly how far libertarians are willing to go in defunding existing government activities.

  • http://aaronmclin.blogspot.com/ Aaron

    Thanks, Kevin. But that still leaves the question that if you’re going to dun some people for benefiting from someone else’s thievery, shouldn’t you do it to everyone? Why is “Your father was a thief” any different from “Your father bought something from a thief” in this regard?

    Dan, I don’t know that the 5 ideas laid out here require government so much as they require an actively engaged populace. But this takes us back to the issue that Hyena raised. Are these principles really workable unless you assume that someone scatters New Libertarian Person body-snatcher pods thither and yon? But then again, what system is? Even Good Government is a fantasy without a populace that’s engaged enough to provide effective oversight (See: United States). No-one has ever managed to create a system that upholds morality or ethics (take your pick) of its own accord.

  • Dan Kervick

    But Aaron, what is it exactly that the actively engaged populace is supposed to do? People frequently express their solidarity through political action, by participating in the institutions of government, or by working to effect changes in the institutions that already exist. But libertarians seem to reject that kind of action because they see governmental action as the work of the evil, coercive State.

  • JH

    Matt, I think that bleeding heart libertarians should believe in state redistribution too. At least, I don’t accept your argument against it.

    It is true that powerful states also have the power to tyrannize. This seems like an argument against modern states, not redistribution per se. Arbitrariness also afflicts private redistribution. Does redistribution lower economic growth? I’m not sure, but the last time I read about this, I thought many (if not most) economists thought otherwise. Take a look at Peter Lindert’s work. How does redistribution violate autonomy? Is this any different from taxes in general?

    This isn’t to say that we should endorse current levels of redistribution. But there is a good case for some redistribution.

  • Kien

    Isn’t there an issue of “too little redistribution” because of free-riding? I would donate more if I know everyone else is donating. There is also an information problem. Who do I donate to and how do I monitor the charity to ensure it is effective? Tax and transfer by a democratic government addresses the free riding problem in part and ensures that the redistribution is efficient.

  • Fernando Teson

    Dan: “Thus redistribution of wealth accomplished through the elimination of privilege is thus redistribution by government.”

    This is fallacious. Repealing laws (for example, those establishing these privileges) is not regulation, it is dismantling regulation. The libertarian only needs the government to dismantle those privileges, then it should stay out of people’s lives. When the government repeals the laws, the resulting distribution will be determined by the market, not by the government (in the sense of “government redistribution” that matters.) I don’t see any problem with that position.

    • Ein Kunsthausmann

      Fallacious, indeed. Dan Kervick’s claim strikes me as an utterly childish mischaracterization, at best. To eliminate a privilege established by government is to halt a means by which wealth is redistributed, sometimes through the otherwise voluntary exchanges that take place in spite of governmental intervention.

      Suppose, for instance, that all doctors and attorneys were deprived tomorrow of membership in their violent trade unions, the ones established by governments, which grant licenses as proof of membership in the trade unions. What is most likely to happen to the pricing power of those professionals? It will fall, just like their prices. Both doctors and attorneys will have to compete for customers much more than they do now, and doctors in particular will have to compete against all manner of quacks, faith healers, and so on for revenues from people inclined to do business with quacks, etc.

      But doctors don’t like having to persaude others nonviolently that their ways are the best treatments, and, like attorneys, they’ve long since become accustomed to the spoils of governmental interventionism. Hence their defensiveness when someone suggests that they don’t need licenses and that they are overpaid.

  • http://aaronmclin.blogspot.com/ Aaron

    “But Aaron, what is it exactly that the actively engaged populace is supposed to do?”

    “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.”
    James Madison

    Working from this, the issue, for me is that a population that is actively engaged enough to act as “the primary control on the government,” is likely to be “angelic” enough that effectively, “no government would be necessary” or adept enough at choosing angelic governance that “neither external nor internal controls on government would be necessary.” In other words, a population that could consistently keep its government on the straight and narrow wouldn’t need one in the first place. Both you and Hyena have made the same point, that people are not wise or moral enough to make a purely “voluntary,” market-driven redistribution scheme workable and just, especially on a large scale. My point is that this also means that people are not wise or moral enough to exercise enough oversight to make a government-driven redistribution scheme workable and just, either.

  • http://profile.typepad.com/vinceskolny VinceSkolny

    Until the individual Americans—and many libertarians are chief offenders—get beyond the idea that the United States is somehow more moral than other nations, and particularly past the idea that it’s divinely ordained or blessed, meaningful individual liberty and social justice, by any definition, is impossible.

    Radical homesteading, for example, needs to face head on its roots in the white dispossession of Native Americans under the rubric of progress and divine blessings favoring those who “did more” with the land, despite the Cherokees visiting Jefferson with the specific purpose of enclosing their land as individual farms and making them citizens.

  • http://profile.typepad.com/vinceskolny VinceSkolny

    @ Hyena et al – I once heard (read, actually) an American political liberal dismiss libertarians with the pejorative caricature: “It’s my money and you can’t have it [via government redistribution],” as though it was obviously ridiculous.

    It was trite and it was annoying; but on the other hand, I think he had his finger precisely on the point of Hyena’s original comment.

  • Wonks Anonymous

    “But competitive markets can only be preserved by energetic governmental vigilance. The natural tendencies of markets that are initially both competitive and free is to evolve rapidly away from competition and toward oligopoly and monopoly”
    Gabriel Kolko disagrees, although he doesn’t desire unrestrained markets more than the “conservative” Progressive-era elites he wrote about.

  • http://Marginallyexplicative.umwblogs.org Sam

    For what its worth I agree with Dan.

    I wouldn’t classify myself as a libertarian but as a bleeding heart it seems to me that there’s a certain level of welfare that we want for everyone in society and baring access to that a “just” or “equitable” distribution of resources in a way that is “fair”.

    Government intervention or redistribution should exist to fix “unfair” situations, including those where in prior periods government action or inaction weighted the system in one direction or another. I find libertarian thought fascinating because there’s a large possibility that government can’t do so without causing greater harms due to public choice/incentive problems. But that doesn’t mean I don’t want to or can’t believe in a state that is angelic, perfect, or at least better in such regards.

  • Christian S-C

    Stop pretending/believing that “redistribution of wealth” is a one-way street. If a government exists at all then it is redistributing wealth, either from the rich to the less-rich or from the less-rich to the rich. The only legitimate, non-anarchic question is the direction (and magnitude) of that flow.

    Stop participating in the false debate about whether or not to support wealth redistribution. Instead discuss whether to support a system that redistributes wealth from the rich to the poor or from the poor to the rich.

    The fact that the less-rich don’t refer to their assets/income as “wealth” as often doesn’t change the fact that it can be redistributed away from (or to) them.

  • Carlos F. Véliz

    I think we need a previous elucidation concerning the meaning of ‘redistribution’.

    Redistribution, generally speaking, is a set of interpersonal transfers of things whereby an initial distribution (D1) is transformed into a different distribution (D2).

    But there can be two different transfers of things, and thus two different kinds of redistribution: voluntary redistribution and coerced redistribution.

    As far as I know, no one opposes voluntary redistribution to help the poor (although it is usually from the libertarian camp that, for example, Singer’s and Unger’s proposals are harshly attacked).

    It is regarding coerced redistribution that lies the source of moral disagreement: liberals egalitarians typically believe that coerced redistribution is always justified, whereas libertarians typically believe it is never justified.

    But, if libertarians take seriously into account point 4 above, not only they cannot oppose coerced redistribution, but they should support coerced redistribution.

    The remaining source of disagreement between liberal egalitarians and libertarians is, thus, about what items should we coercively redistribute. In my view, not a minor one.

  • Jeff Wermer

    Gary,
    I’m trying to figure out how the redistribution of wealth would actually work without the government doing it. I find the ideas of libertarianism to be intriguing, but can’t quite wrap my head around the positive arguments for some of the policies you’re advocating.
    For instance, acts of solidarity sound great. I imagine most people would be for them, but is there any evidence that acts of solidarity would be enough to fulfill the goals of a decent society without a regulatory government? It seems that your argument relies on the benevolence of people, but I don’t think there’s any historical evidence to support general benevolence.
    I’m not trying to be dismissive of your proposals. I would just like more of an argument for why these systems would be sufficient.
    Thanks,
    Jeff

  • John

    I think this is a great area for discussion but get the sense there might be some preliminary work to do before getting everyone even close to the same page.

    I do wonder if redistribution is the right term for all of the cases, it can be applied but certainly bring some baggage with the term. It seems to me that we’re bundling the concepts of correcting prior property rights violations, challenging certain claimed property rights, charitable and strategic giving and egalitarian forced redistribution where the “donor” has done no wrong to the donee.

    It might also be worth some discussion about what is government versus governance versus market/social interactions. Where exactly are we drawing the live between these areas? I doubt everyone is drawing them in the same location (if even thinking about them as they post).

    Dan, regarding your rejection that the free market won’t eat the rich, item 3, you might find http://cafehayek.com/2011/04/theres-no-their-there.html or some interest.

  • Dan Kervick

    The libertarian only needs the government to dismantle those privileges, then it should stay out of people’s lives.

    Fernando, I suppose that is true if your aim is only to eliminate all laws regulating markets. But then I don’t see how you will accomplish your aim of eliminating privilege. Market participants will eagerly seek to create systems of privilege and exclusion on their own if they are not coercively prevented from doing so.

    Suppose the most prosperous restaurant owners in town are clustered all around a few blocks of the most centrally located business district in town. Suppose these owners build on their success over time to buy up all the land and buildings in that district, leveraging profit into rents and rents into more profits. Suppose they ultimately succeed in buying the very streets in the district from whomever owns them (maybe even from The State!) Suppose they then form a cooperative association that agrees on mutually beneficial pricing policies for their establishments, charging higher prices all around than they would charge if forced to compete with one another. They also charge passage fees on the streets. They also establish all kinds of pay-to-play fees for other restaurateurs seeking to purchase a space in the district. The coveted centrality of this business district allows them to get away with all of these things.

    Suppose, finally, that all of these deals and arrangements are made in a perfectly open, above board manner. The arrangements are all freely contracted, and are in fact enthusiastically and unanimously sought by all of the members of the newly formed association. The law doesn’t interfere at any step along this evolutionary trail.

    This is real economic freedom at work. The so-called “free” competitive markets of neo-classical modeling are not really free. Nor are they entirely natural. They are constrained and artificial, and fixed on the economic landscape by a combination of social norms and positive law that aims at promoting freedom and competitive balance. These markets are preserved in a competitive condition by enforceable social rules that actively prevent their participants from engaging in the kinds of competition-blocking maneuvers that they would otherwise eagerly pursue if these participants were truly free to undertake the cooperative economic contracts that are in their self-interest.

    Now the fact that competitive markets are not free doesn’t mean there is anything wrong with them. In fact, competitive markets are a highly useful invention for the efficient production and distribution of many kinds of goods. We all benefit from the existence of competitive markets. But competition needs to be preserved by coercive rules that limit the economic freedom of the competitors. Human beings don’t compete to preserve competition. They compete to win. The goal of any participant in a competition is to end the competition, on favorable terms to that competitor. And in most competitions, somebody does indeed win in the end. So if you want to preserve competition indefinitely you need to take coercive measures to keep it going indefinitely.

  • xephyr

    Matt’s original post has five topics, and each can be further divided into a) correct historical abuses and b) correct abuses going forward. The responses muddle these components, which would be better addressed independently — especially the historical vs go-forward cases.

    I can’t see that correcting the historical abuses is possible because any solution involves subjective choices. Try solving the ownership problem for Israel or Jerusalem, for example. What is your basis for determining the “rightful” owner?

    Dan — the scenario you describe is theoretically possible and even likely on some very small scale or for a short time, but is not possible over a large, long-term scale without the use of either government collusion or force. (I understand there has never been a monopoly without goverment support or the use of force. I would love to see that assertion disproved.) On a small scale, the scenario you describe does exactly exist – DisneyWorld. They have a complete monopoly just like you describe. But it is because they offer such a compelling product/service that people freely choose to pay their outrageous prices. Nonetheless, that doesn’t prevent Univeral and Seaworld from offering a completely different competitive offering just across town or Six Flags offering a “similar” experience closer to home.

    So I disagree with your conclusion (“if you want to preserve competition indefinitely you need to take coercive measures to keep it going indefinitely”) and argue that if you want to prevent competition indefinitely, you need to take coercive measures to prevent it.

  • Fernando R. Tesón

    Dan: The point you make is important and requires an answer, and I apologize I cannot do it now. It is, however, a different argument from the one you made against Gary. I objected to your point that the laws to eliminate privileges amount to coercive redistribution by the state, and therefore the libertarian cannot consistently oppose state redistribution.
    By the way: I like your comments, much as I often disagree.

  • Jeff Wermer

    “- the scenario you describe is theoretically possible and even likely on some very small scale or for a short time, but is not possible over a large, long-term scale without the use of either government collusion or force. (I understand there has never been a monopoly without goverment support or the use of force. I would love to see that assertion disproved.)”

    If I might jump in here to ask some clarifying questions, what do you mean when you say it is not possible over the long term? Why not?
    Also, as to your parenthetical statement, isn’t this just an absence of evidence does not equal evidence of absence situation? Since powerful states and the industrial revolution/mass communication systems grew up together, there really hasn’t been an opportunity to see what non-state driven businesses would do.

  • xephyr

    Jeff, you are right to call me out. Let me address the parenthetical first.

    My background: I am not an academic, as many contributors of this blog are. I am a litmus-penguin libertarian who also recognizes there are societal injustices if the libertarian/ objectivist principle of selfishness is interpreted too narrowly to encompass only the self rather than the self within society. I read this blog with interest and fascination and look for ways to take the academic concepts/ disciussions and interpret them in ways so that I can apply them and argue them. I have more experience hanging around libertarians than around academic libertarians.

    So you caught me in a bald assertion. To try to clarify how it should have been presented, I have heard asserted by other (non-academic) libertarians that monopolies cannot exist without government support. I repeated that (unproven) assertion. But then tried to qualify the situation.

    That a monopoly can’t exist without government support is plausible and there are certainly examples where monopolies either developed or existed because of government support. But that certainly doesn’t prove the assertion.

    Identifying every occurrence of a monopoly and determining the relationship with the state would be proof. But I would be satisfied with a single example that disproves the assertion. With that, I would accept it as false and stop repeating it.

    I am running out of time. I’ll have to address your other point later.

    • Damien RS

      Alcoa was a natural monopoly due to the economies of scale of aluminum production.  Boeing and Airbus seem inclined to merge, AFAIK, if they weren’t kept separate by US and EU strategic concerns.  AT&T seems to have been a natural monopoly of telephone lines; government broke it up, and the pieces are now merging again.

      Sometimes, businesses use government to rarise barriers to entry.  Other times, barriers to entry are naturally high.

      More fundamentally, usually such talk is about monopolies in markets for goods and services.  Dan’s restaranteur scenario was a growing monopoly of *land*.  A next step would have been to buy up more and more adjacent land.  In a condition of anarchy, this would be the nucleus of a new state.  Arguments that a monopoly in razor blades wouldn’t be stable don’t work against a monopoly in land, especially when it gets big enough to be able to stop playing nice and use force to grow.

  • Jeff Wermer

    Xephyr,
    Thanks for the reply.
    I’m not a philosopher, nor an economist, so consider this a layman’s grasping attempt.
    I imagine that if you go through every single monopoly, you will find some amount of support from the state. I think this says more about the common interests of the state and corporations than it does about a connection between the existence of monopolies and state involvement. The reason I think this is because (as far as I know) states have been influencing the interests of businesses for all of human history.
    So a truly free market (again, as far as I know) has never existed and so predicting what would happen in one would be very hard.
    It seems to me that a monopoly could come about easily within a free market and I can also imagine situations where it would fail quickly (let’s say all of the business partners don’t like monopolies and they decide to stop doing business with it out of principle). I can also think of many reasons for why it would not fail. The short example I gave is based on some kind of principled response from the business partners, but let’s say they are more interested in accumulating wealth (a not unreasonable idea). Making wealth in this way, they might be in favor of the monopoly’s endurance.

    Anyway, I’m fairly new to libertarian theory and find it pretty intriguing. I get the negative arguments and agree with quite a bit about them. I just haven’t seen any positive arguments for letting the free market go that aren’t inevitably negative arguments about the state.
    Any info you, and others, can throw out would be great.

  • Wonks Anonymous

    Christian S-C,
    Gary Chartier is an anarchist.

  • John

    Dan – “This is real economic freedom at work.”

    You’re correct that it’s a conceivable way things could play out if we accept the unstated assumptions you have about all the various people populating the hypothetical economy you create.

    I don’t think the unstated assumptions are all that likely so see no reason to expect such a result. The more likely incentive structures will fight against your postulated outcome.

  • Kurt Horner

    @Dan:
    This statement is where your argument runs aground: “And in most competitions, somebody does indeed win in the end.”

    You’re assuming that there is an “end” to the game — i.e. that there is a stable win condition. But since a competitive market is one with freedom of entry the competition never truly ends. Historically, companies with large market share have had to work very hard to maintain that share — or used the power of the state to maintain it for them.

    I can easily concede that some degree of deviation from a competitive market can occur due to natural economies of scale or social factors like racism. But, you have to concede that a lot of that deviation is a product of the legal environment. If stable cartels really could form without the use of force, why is that the actual development of real economies has always seen oligopoly conditions enforced via changes in the law? Your theory seems very unlikely to be an accurate description of the real world.

    That being said, to some extent your disagreement with libertarians is semantic. What really is the difference between “promoting free markets” and “building better markets”? Both are saying that competitive markets are better than rigged ones, so who cares what label you slap on it?

  • DH

    I am appreciative of this blog and the intentions it represents. I think you are doing a lot to get to the root of social organization in the first place: human flourishing.

    But I do wonder about 3 and 4. In some ways, there is something in common with communist idealism of the sort that comes after the intermediate stage of socialism. The marxists and anarchists often speculate about some yet to be realized state of freedom in which people will do what is good without being compelled to do it. People will work because it is right to do it.

    I know many people who are already inclined to virtue. They are never the problem. It’s all those people that are not virtuous, how will they be corrected or reformed? Will the market “take care of them” in some karmic way? If so, how is this different from “the people” doing it in the marxist revolution? Aren’t markets essentially an expression of directed social activity? If so, why insist upon the difference between the people eliminating the enemies of the revolution through coercive means and markets eliminating enemies of the markets through economic means? If, in libertarianism, there is no government intervention to correct poverty…. is the starving under a free market any different from starving in a Gulag?

    I ask this in earnestness. Libertarianism is attractive to me, especially libertarianism that embraces care for others. But I guess there is a lot that I don’t understand.

  • Tibor Machan

    Maybe it needs to be stressed that coercive wealth redistribution is not about helping people but about taking control of people’s labor and resources.  Indeed, that is what taxation does: transfers the power to spend resources from those who rightfully have it to those who have the power to take it. 

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