corporatism – Bleeding Heart Libertarians http://bleedingheartlibertarians.com Free Markets and Social Justice Fri, 19 Jan 2018 15:05:02 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.2 http://bleedingheartlibertarians.com/wp-content/uploads/2016/09/cropped-site-icon-BHL-32x32.png corporatism – Bleeding Heart Libertarians http://bleedingheartlibertarians.com 32 32 22756168 The Problem Doesn’t Stop With Amtrak http://bleedingheartlibertarians.com/2016/05/the-problem-doesnt-stop-with-amtrak/ http://bleedingheartlibertarians.com/2016/05/the-problem-doesnt-stop-with-amtrak/#comments Thu, 19 May 2016 02:21:37 +0000 http://bleedingheartlibertarians.com/?p=10725 Amtrak is in legal trouble. The rail service provider has long enjoyed an anomalous legal status, as a for-profit corporation created by the U.S. government. But in 2008, the Passenger...

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Amtrak is in legal trouble.

The rail service provider has long enjoyed an anomalous legal status, as a for-profit corporation created by the U.S. government. But in 2008, the Passenger Rail Investment and Improvement Act, or PRIIA, heightened that anomaly by giving Amtrak a say in crafting and imposing the regulations that the entire U.S. rail industry to follow. And that, the D.C. Circuit Court of Appeals ruled late last month, is unconstitutional.

In the court’s ruling, Judge Janice Rogers Brown expresses concern about the ability of any business entity – public, private, or in-between – to “co-opt the state’s coercive power to impose a disadvantageous regulatory regime on its market competitors.” Inasmuch as PRIAA has ơendowed [Amtrak] with agency powers, authorizing it to regulate its resource competitors,” Brown argues, the act “violates the Fifth Amendment’s Due Process Clause by authorizing an economically self-interested actor to regulate its competitors.” (Association of American Railroads v. U.S. Department of Transportation, 29 April 2016)

It remains to be seen whether the Supreme Court will agree; in the past it hasn’t always seen eye to eye with the D.C. court on issues involving Amtrak. George Will is not optimistic; writing in the Washington Post, Will sees PRIIA as a symptom of an increasingly bipartisan conviction that “the separation of powers is an anachronistic inconvenience,” and looks forward gloomily to a future characterized by the “steady permeation of ostensibly, but not really, private entities with government’s presence,” which he takes to have been “progressives’ consistent goal … for a century.” (“Amtrak’s for-profit regulation,” Washington Post, 11 May 2016)

The ruling, whether it ultimately gets upheld or overturned, raises broader questions about the relation between business and government in general.

While describing Amtrak as a “wholly unique statutory creature,” Brown recognizes that the problem extends beyond Amtrak’s specific legal status, charging that “government’s increasing reliance on public-private partnerships portends an even more ill-fitting accommodation between the exercise of regulatory power and concerns about fairness and accountability.”

In fact, though, the problem is still broader than that – and broader, too, than lack of respect for the constitutional separation of powers, which is the chief moral that George Will draws from the case. Even in the case of businesses that are not officially public-private partnerships, it is all too common for favored firms to lobby successfully for regulations that help them and hinder their competitors, and even to get their representatives onto the regulatory boards.

This phenomenon of regulatory capture is by no means anomalous, nor is it something that can be fixed by a few simple reforms. On the contrary, it’s the virtually inevitable result of the state’s power to regulate. The interests that benefit from regulatory favoritism tend to be concentrated; the interests that are harmed by it tend to be dispersed. Hence the proponents of regulatory favoritism have more incentive, and opportunity, to lobby for it than its opponents have to lobby against it. So long as the state retains its regulatory powers, then, the weight of economic incentives will continue to push toward policies of cronyism.

Indeed, the root of the problem lies within the institution of the state itself. If it’s a bad idea, in Judge Brown’s words, to allow “an economically self-interested actor to regulate its competitors,” then what are we to make of the state, which by definition claims a territorial monopoly on the provision of legal services – legislation, adjudication, and enforcement? What this territorial monopoly means is that no one can offer those services without the state’s approval and oversight. Should we expect government to exercise this monopoly fairly and wisely?

Without the discipline of vigorous market competition, firms lack the economic incentive to provide good value to their customers; moreover, even apart from the issue of incentives, without the feedback of price signals, firms lack the information needed to determine how best to satisfy customer preferences. Thus when a firm holds the legal right to put it competitors out of business, the foreseeable results – as any economist will tell you – are high prices, low quality, inefficiency, and abuse of power. Why should we expect this economic truism to apply any differently to the state than to anything else?

The problem isn’t just Amtrak. Nor is it just public-private partnerships, or even regulatory favoritism toward crony capitalists. The problem is the state itself. And thus the problem won’t be solved until the monopolistic entity known as the state is replaced by the more level playing field of a polycentric legal order.

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If Freedom Is So Great, Why Won’t Our Masters Free Us? http://bleedingheartlibertarians.com/2013/06/if-freedom-is-so-great-why-wont-our-masters-free-us/ http://bleedingheartlibertarians.com/2013/06/if-freedom-is-so-great-why-wont-our-masters-free-us/#comments Mon, 10 Jun 2013 19:41:40 +0000 http://bleedingheartlibertarians.com/?p=5976 Michael Lind asks a question. E. J. Dionne gives an answer. Over at C4SS I criticise both.

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Michael Lind asks a question.

E. J. Dionne gives an answer.

Over at C4SS I criticise both.

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Gabriel Kolko on Hoover and the New Deal http://bleedingheartlibertarians.com/2012/09/gabriel-kolko-on-hoover-and-the-new-deal/ http://bleedingheartlibertarians.com/2012/09/gabriel-kolko-on-hoover-and-the-new-deal/#comments Thu, 20 Sep 2012 17:45:30 +0000 http://bleedingheartlibertarians.com/?p=4031 The famed leftist historian Gabriel Kolko shares a number of thoughts on Hoover, FDR, and the New Deal over at Counterpunch in a piece called “The New Deal Illusion“. In...

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The famed leftist historian Gabriel Kolko shares a number of thoughts on Hoover, FDR, and the New Deal over at Counterpunch in a piece called “The New Deal Illusion“. In the process, he destroys a number of commonly-held left-liberal tropes about both presidents.  As someone who has made it a professional mission to annihilate the historically inaccurate portrayal of Hoover as a defender of “laissez-faire” and “austerity,” I am thrilled to see this piece.   Some excerpts below.

What is most interesting is how emphatic he is about the continuity between Hoover and FDR, seeing both of them as part of the 20th century progressive movement that he has written so much about.

But the 1920s and 1930 was a very complex period and are best treated as one unified era because the administration of Herbert Hoover, the much-reviled president during the Great Depression that began in 1929 and lasted well into the 1930s, was also a part of the American “Progressive” tradition. As I have argued elsewhere, American “progressivism” was a part of a big business effort to attain protection from the unpredictability of too much competition. [See my book The Triumph of Conservatism: A reinterpretation of American History, 1900-1916, New York, 1962] In fact, the New Deal was many things, having numerous aspects: what was not made up on the spur of the moment was copied from earlier efforts. The Democrats did not have a real economic strategy when they came to power. Most of what they said about the economy during the election campaign was, naturally, simply designed to get votes. They certainly had no idea the day they came to office how to deal with the Depression. Hoover had more ideas than they did.

Most historians know this; Hoover was far from being a bloodless conservative.

Kolko also notes how much smarter Hoover was than FDR.

Though Herbert Hoover was clearly Roosevelt’s intellectual superior, he was unlucky to have presided over an economic depression within eight months of taking office. The depression was the product of much larger forces in the world and the American economy rather than which party was in power. If the Democrats had been in the White House in 1929, there would have been an identical economic downturn.   And in many regards Hoover’s social thought was far more advanced than Franklin Roosevelt’s, “progressive“ in the sense that Theodore Roosevelt and Woodrow Wilson were.

Finally he gives libertarians their props (my emphasis):

Hoover tried to combat the ensuing Great Depression with public works projects such as major dams, volunteer efforts, new tariffs and raises in individual and corporate taxes.  He created the Reconstruction Finance Corporation, mainly to give loans to weak banks. Roosevelt continued and expanded the RFC somewhat, also loaning the money to weak banks, railroads, and using it for work relief. Then the sums loaned dropped off in 1934 until World War Two, when the RFC began financing construction of munitions plants. Libertarians argued years later that Hoover’s economics were statist, and that he belonged in the continuum of government and business collaboration that began around the turn of the century.   I must agree with them.

I do hope this piece is one that finally convinces the Rachel Maddows of the world to stop pushing a version of Hoover (as well as FDR!) that is not backed up by the historical facts.  If one of their own politically, and one who is more radical than they are, can’t convince them, then we know that they are pure dogmatists with no interest in the facts.

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Capitalism vs. Big Business http://bleedingheartlibertarians.com/2012/08/capitalism-vs-big-business/ http://bleedingheartlibertarians.com/2012/08/capitalism-vs-big-business/#comments Sat, 11 Aug 2012 23:19:26 +0000 http://bleedingheartlibertarians.com/?p=3755 Our own Steve Horwitz on why being pro-market isn’t the same as bring pro-business.

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Our own Steve Horwitz on why being pro-market isn’t the same as bring pro-business.

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Chartier on the Right to Work http://bleedingheartlibertarians.com/2012/05/chartier-on-the-right-to-work/ http://bleedingheartlibertarians.com/2012/05/chartier-on-the-right-to-work/#comments Fri, 18 May 2012 16:47:35 +0000 http://bleedingheartlibertarians.com/?p=2964 There’s been a bit of discussion in one of our recent comment threads about so-called “right-to-work” laws (RTW). This is a topic we’ve discussed before here. And it’s one about...

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There’s been a bit of discussion in one of our recent comment threads about so-called “right-to-work” laws (RTW). This is a topic we’ve discussed before here. And it’s one about which I still haven’t entirely made up my mind. It’s sometimes difficult to know what specific policies libertarian principles demand when those principles have been and continue to be violated on a regular basis. Libertarianism demands freedom of contract for all, not just for some. But what if freedom of contract for all isn’t a live option on the policy table?

In the most recent issue of The Freeman, our very own Gary Chartier weighs in on the issue with his essay “What’s Wrong with Right-to-Work.” Gary begins by noting, correctly, that RTW violates freedom of contract by preventing employers from entering into an with a union to form a “union shop.”

That might seem to settle the issue from a libertarian perspective, but defenders of RTW respond by pointing out that prior government policies like the National Labor Relations Act have already violated freedom of contract by requiring employers to bargain with unions that have the support of the majority of workers. So government has already thrown out freedom of contract in a way that benefits unions. RTW simply balances things out.

But according to Chartier, this story grossly misrepresents the actual history and political economy of the NLRA, which was actually supported by business interests:

Big businesses that supported the emergence of modern labor law liked the fact that it had the potential to keep unions tame and manageable, ensuring that they would operate within a predefined legal framework in order to enjoy legal privileges. (This is not to say that everything worked out exactly as the corporate elite would have liked.) It should be no surprise, then, that viewed as a package, existing labor law limits workers’ options. For instance, since bargaining is required only when a union enjoys majority support, a union that represents a significant fraction of employees—but not a majority—will tend to be treated as irrelevant.

Chartier’s solution?

To the extent that right-to-work laws might seem to make sense as mechanisms for dealing with union abuses, the solution is to eliminate the whole body of modern labor legislation. Unions have shown they don’t need it, even in the unfreed market we have today. And in a genuinely freed market, workers would find it significantly easier than they do at present to work for themselves, to say no to abusive work environments, and so to bargain effectively for appealing wages and working conditions and opportunities to direct their workplaces. They certainly wouldn’t need the NLRA.

Fair enough. But this isn’t much help if the only question on the ballot is: RTW, yes or no? The elimination of all labor laws and special privileges for both sides is a terrific ideal to aim at. But ideal theory is sometimes little help for solving problems in our very non-ideal world.

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Gary Chartier on Reason TV http://bleedingheartlibertarians.com/2012/02/gary-chartier-on-reason-tv/ http://bleedingheartlibertarians.com/2012/02/gary-chartier-on-reason-tv/#comments Tue, 14 Feb 2012 18:43:27 +0000 http://bleedingheartlibertarians.com/?p=2044 Our very own Gary Chartier recently did an interview with Reason TV about his new book, Markets Not Capitalism. You can watch it here. And after you’re done, go ahead and get...

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Gary Chartier on Reason TVOur very own Gary Chartier recently did an interview with Reason TV about his new book, Markets Not Capitalism. You can watch it here.

And after you’re done, go ahead and get a copy of that book. It is an absolutely terrific collection of essays, containing a number of good pieces from our own Roderick Long and our erstwhile guest-blogger Charles Johnson. Plus other newish stuff from Kevin Carson and Sheldon Richman, and some classics from Benjamin Tucker, Karl Hess, Voltairine de Cleyre, and Murray Rothbard.

Whether you’re down with the “left-wing market anarchist” project or not, it’s a worthwhile and stimulating read!

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Ron Paul: “Read The Law, by Bastiat” http://bleedingheartlibertarians.com/2011/12/ron-paul-read-the-law-by-bastiat/ http://bleedingheartlibertarians.com/2011/12/ron-paul-read-the-law-by-bastiat/#comments Tue, 06 Dec 2011 20:29:34 +0000 http://bleedingheartlibertarians.com/?p=1580 This past weekend at the Huckabee Presidential Candidate Forum, Ron Paul was asked what one book he would suggest every American read.  His answer was that they should read The...

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Frederic BastiatThis past weekend at the Huckabee Presidential Candidate Forum, Ron Paul was asked what one book he would suggest every American read.  His answer was that they should read The Law, by Frédéric Bastiat.  (Video here, at about 10:40)

This was a great answer, and I heartily second Paul’s endorsement.  If you haven’t read it yet, you should.  Though Bastiat was a French economist writing in the early 19th century, his prose is still highly readable and extremely relevant.  And The Law is widely available free online: HTML, Kindle, audio, and PDF versions can all be found on this page.  (Those of you looking to go even deeper into Bastiat’s thought can find an immense wealth of resources at David Hart’s incredible website here)

The Law is about what legal systems should be, and how they have been perverted.  The true purpose of the law, according to Bastiat, is the “collective organization of the individual right to lawful defense” of the natural rights of life, liberty, and property.  But, unfortunately,

The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others.

Instead of protecting our rights, the law has turned to plundering them.  The main causes of this plunder, in Bastiat’s eyes, are two: “stupid greed and false philanthropy.”

Bastiat’s discussion of the role of greed in promoting plunder is especially relevant today, given ongoing concerns about corporatism and its relation to capitalism as expressed by both libertarians and certain segments of the Occupy Wall Street movement.  Bastiat presents a clear and simple diagnosis of the root cause of corporatist plunder:

When they can, they wish to live and prosper at the expense of others … Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property. But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder. Now since man is naturally inclined to avoid pain—and since labor is pain in itself—it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

How can we identify and stop plunder?

Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law—which may be an isolated case—is not abolished immediately, it will spread, multiply, and develop into a system.

And in Bastiat’s time, he saw that plunder had developed into a system, where any merchant, guild, or special interest with the resources to do so would struggle to gain influence or control over the coercive power of the state in order to twist it to serve its own private ends.  The result: a system of universal plunder sustained by the “delusion” that the the law can be made to “enrich everyone at the expense of everyone else.”

Not all plunder, however, has its origins in nefarious motives.  Some has its origins in a genuine desire to help the less fortunate.  And Bastiat was one who believed that charitable aid to the poor was an important virtue.  But the purpose of the law is justice, not charity.  And to use the law to achieve charitable ends inevitably perverts justice.

You say: “There are persons who have no money,” and you turn to the law. But the law is not a breast that fills itself with milk. Nor are the lacteal veins of the law supplied with milk from a source outside the society. Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in.

Such a view might appear cold-hearted – suggesting that the needs of the poor are of so little moral weight that they cannot justify even the most trivial infringement on the liberties of the well-off.  Does Bastiat think that society has no obligation to the least well-off?  No.  This charge, says Bastiat

confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.

Bleeding Heart Libertarians like myself might take issue with some of Bastiat’s claims about the defensibility of social justice and the exact nature of a state’s obligations toward the poor.  But even if you don’t agree with him 100%, you’re sure to find much in The Law to enjoy, ponder over, and admire.

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Dear Left: Corporatism Is Your Fault http://bleedingheartlibertarians.com/2011/11/dear-left-corporatism-is-your-fault/ http://bleedingheartlibertarians.com/2011/11/dear-left-corporatism-is-your-fault/#comments Tue, 29 Nov 2011 16:24:15 +0000 http://bleedingheartlibertarians.com/?p=1560 I’m not usually one for polemics. But sometimes polemics is called for. Here goes. Dear members of the moderate left, America is suffering from rampant, run-away corporatism and crony capitalism....

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I’m not usually one for polemics. But sometimes polemics is called for. Here goes.

Dear members of the moderate left,

America is suffering from rampant, run-away corporatism and crony capitalism. We are increasingly a plutocracy in which government serves the interests of elite financiers and CEOs at the expense of everyone else.

You know this and you complain loudly about it. But the problem is your fault. You caused this state of affairs. Stop it.

Unlike we libertarianish people, you people actually hold and have been holding significant political power in the US over the past 50 years. What have you done with this power? You’ve greased the corporatist machine every chance you’ve gotten. You’ve made things worse, not better. Our current problems are your fault. You need to stop.

We told you this would happen, but you wouldn’t listen. You complain, rightly, that regulatory agencies are controlled by the very corporations they are supposed to constrain. Well, yeah, we told you that would happen. When you create power—and you people love to create power—the unscrupulous seek to capture that power for their personal benefit. Time and time again, they succeed. We told you that would happen, and we gave you an accurate account of how it would happen.

You complain, perhaps rightly, that corporations are just too big. Well, yeah, we told you that would happen. When you create complicated tax codes, complicated regulatory regimes, and complicated licensing rules, these regulations naturally select for larger and larger corporations. We told you that would happen. Of course, these increasingly large corporations then capture these rules, codes, and regulations to disadvantage their competitors and exploit the rest of us. We told you that would happen.

It’s not rocket science. It’s public choice economics. You recognized, rightly, that public choice economics was a threat to your ideology. So, you didn’t listen, because you didn’t want to be wrong. Public choice predicted that the government programs you created with the goal of fixing problems would often instead exacerbate those problems. Well, the evidence is in. You were wrong and public choice theory was right. If you have any decency, it is time to admit you were wrong and change. Stop making things worse.

You spent the past fifty years empowering corporations and the most unscrupulous of the rich. You created rampant moral hazard in the financial sector. You created the system that socializes risks but privatizes profit. You created the system that creates a revolving door between Obama’s staff and Goldman Sachs. There’s a reason why Wall Street throws money at Obama. It’s because you, the moderate left, are Wall Street’s biggest supporters. Oh, I know you complain about Wall Street. But your actions speak louder than your words.

You balk: Isn’t the problem the regressive pro-market post-Reagan politics? Please, people. Let’s be serious a moment. Reagan used a bunch of pro-market, pro-liberty, anti-big government rhetoric, but the man was no libertarian, and he did little to make the country more libertarian. Reagan spent and spent, and thus ran up the debt. He doubled the number of imports with trade restrictions. He pursued militaristic foreign policy. He increased rather than decreased the size, scope, and power of government. Reagan ramped up the war on Americans civil liberties drugs. He wasn’t even a big deregulator—that was Carter. Look past rhetoric to reality. Reagan was in practice just a more militaristic version of one of you. (More militaristic? Maybe I’m giving you too much credit. While we spent Black Friday shopping, Obama spent it having his military murder innocent Afghan children.)

Point your fingers at yourself. You did this.

Now, here’s the good news. Unlike we libertarianish people, you members of the moderate left will continue to hold and exercise power. So, learn some public choice, and use what you learn in practice. I’m ready to forgive you, if you’re ready to change.

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