[The following is a guest post by David S. D’Amato. David is an attorney with an LL.M. in global law and technology. He is a columnist at the Cato Institute’s Libertarianism.org, a frequent contributor at the Future of Freedom Foundation, and holds the Benjamin R. Tucker chair at the Center for a Stateless Society. His writing has also appeared at the Institute of Economic Affairs, the Centre for Policy Studies, and the Ludwig von Mises Institute, among others. He is on Twitter at @dsdamato.]

In an article at Jacobin magazine, Nicole Aschoff takes on what she calls “The Free-Market Fantasy,” the idea that markets are a naturally self-regulating system of creativity and peaceful cooperation. Throughout Aschoff’s deeply confused article, it is unclear what exactly it is that she’s condemning. She begins with a discussion of Whole Foods CEO John Mackey, for whom free markets are “unquestionably the greatest system for innovation and social cooperation that has ever existed.” After acknowledging the distinction Mackey draws between free markets and crony capitalism, Aschoff quickly gets to work explaining that “the free-market historical narrative lacks empirical weight.” The United States, she argues, “demonstrates the political nature of markets,” slave labor and “a state-sponsored, genocidal land grab” paving the way for capitalist industrial development.

As Aschoff correctly observes, citing Karl Polanyi, “capitalist markets are a product of state engineering, not nature.” And indeed, many free market libertarians are saying exactly the same thing about the historical relationship between capitalist firms and the state as leftist anti-capitalists such as Aschoff and Polanyi. First, the article argues that the practical results free markets yield are not those promised by libertarians. Then we hear that free markets are not really free at all, and that therefore free market ideology is a myth, historical markets having always relied on state intervention.

Progressives and state socialists like Aschoff arraign market libertarians for ignoring the empirical facts of global capitalist markets while they exhibit what seems a willful ignorance of historical states, ascribing to the state the qualities of a celestial guardian. When did the state become the great protector of the poor and working classes rather than the mechanism of ruling class conquest, plunder, and control?

Free marketers and state socialists end up talking past each other because we simply cannot agree on the terms of the debate, on the basic historical and theoretical assumptions that we take into the conversation. They don’t believe our claim that true free markets (which they correctly complain have never existed) would yield equitable results for the poor and underprivileged, and we don’t believe theirs that the state can be remade into a quasi-charity serving the greater good. They see the state as “the things we do together,” a means of social cooperation and community, while we think such a description much more accurately describes market relationships.

Indeed, at one time, free market libertarians like Benjamin Tucker argued convincingly that unbridled, unregulated competition was the very force necessary to accomplish the underlying goal of the socialist movement — that labor be paid with its full product. And while there aren’t many remaining in free market circles who believe with Tucker that open competition would fully erase rent, interest, and profit from economic life, we nevertheless have no reason to doubt his claims about the ultimate role of the state in the economy.

After emphasizing the role that the state has played in the creation of global capitalism — which rightly hints at the symbiotic mutual-dependence linking capital and the state — Aschoff begins to lament the weakness of present-day states and the comparative strength of transnational corporations. Right after she notes the historical interdependence of the two, Aschoff confusedly falls into the mistake of thinking of the state as a counterpoise to the power of big business instead of its facilitator.

Such facile critiques of free market libertarianism simply ignore the immutable fact that all human beings, regardless of whether they work in a private company or a government body, are capable of acting out of self-interest. This is important because it suggests that government bodies, our supposed protectors from evil corporations, may also have incentives to act against the common good, however defined and assuming that we consider it an important criterion in comparing different political programs.

We are thus left to wonder how state socialists like Aschoff are able to rationalize what I will call their “benevolent state fantasy” (as against the “free-market fantasy” that they deride). It ought to trouble the proponents of the benevolent state fantasy that in order to accept their view of the state as a protector of the natural environment and a curb on the power of avaricious corporations, we must insulate the individuals that constitute the state from the presumptions we make about the individual agents of private corporations. We aren’t offered an explanation of how or why government bureaucracies will succeed where private companies fail, of what makes government accountable, socially responsible, and above self-serving action.

The crazy, right-wing, fringe idea libertarians have is that no one ought to have the authority to make decisions for anyone but herself, that we should limit the use of coercive physical force to self-defense and the legitimate defense of others. That’s all. In and of itself, then, libertarianism has nothing at all to do with letting multinational corporations run roughshod over workers and the environment; it likewise has nothing to do with some imagined philosophy of base, uncaring greed based on lazy and simplistic caricatures of Ayn Rand from dutiful socialists and progressives who would never deign to read her. It is and always has been a philosophy that takes seriously the legitimate autonomy and prerogatives of every individual.

In the words of Foundation for Economic Education founder Leonard E. Read, libertarianism permits “anything that’s peaceful.” Libertarians see every individual as a self-ruler within her own sphere of autonomy, the boundaries of which extend over her life and her justly acquired property. We must add that caveat — “justly acquired” — because the ideological opponents of libertarianism seem to have concluded that it represents a new kind of global feudalism under which rule of the nation state is increasingly replaced by that of the sovereign corporation, whose uncontested, private control over everything of value, from land and natural resources to ideas and technology, gives it just as much power as the state over the daily life of the individual, if not more.

In fact, many libertarians readily acknowledge that, under libertarian principles, the present-day distribution of wealth and property is indefensible. But the mistake of socialists who advocate more state control over economic life is to blame freedom and competition, which they openly concede have never actually obtained. Perhaps many libertarians would share the socialist view on the need for more government economic regulation and intervention if we believed with them (a) that market competition is inherently and unavoidably unfair and coercive, and (b) that it is possible to harness state coercion as a force for good despite its history of elite manipulation, self-serving, and graft. In the debate between libertarians and socialists, it is important to get underneath ambiguous terms and phrase (of which “free market” is, of course, an example) to the substantive positions at issue.

Those who mistake state power and social power, as Aschoff does in her final paragraph, should consider the state’s history of attacks on social power, community, and voluntary cooperation. Here, James C. Scott’s work on anarchism and decentralism is particularly relevant and incisive. The powerful state that socialists like Aschoff want, as opposed to the “toothless” states we supposedly have today, would itself be no more than a great monopolist, one giant capitalist firm with no interest but to serve a comparatively few leaders at the top of the pyramid, the greater good be damned. Such a socialist state would most assuredly still serve “the needs of capital,” and now nothing (except for Aschoff’s vague “democratic forces”) could stop it from depleting natural resources and destroying the earth ever more rapidly than today’s oligopoly firms. One hopes that states someday become quite as toothless as Jacobin magazine believes they are today.