Is Libertarianism What Libertarians Think It Is? Part Two

Markets Freed From Capitalism By Charles W. Johnson (2010)

From the author’s site:

“What I am is a web developer, a left-libertarian writer, a student of Philosophy, and sometime teacher of Logic. I was born in San Antonio, Texas in 1981. I’ve lived most of my life in the South, especially in Texas and Alabama. I studied Philosophy and Computer Science at Auburn University. I spent about eight years living in southeast Michigan (Ypsilanti and Ann Arbor) and Las Vegas, Nevada. I spent a few summers philosophy classes to gifted teenagers through the Johns Hopkins University Center for Talented Youth. I work on open-source web development, a number of individualist Anarchist research and publishing projects, and the occasional bit of philosophical writing. I currently live in Auburn, Alabama, where I share an apartment with my beloved wife, Laura Breitenbeck.”

“For anticapitalist market anarchists, there are at least three specific mechanisms
we might mention that shove people into rigged markets – mechanisms
that are especially pervasive and especially important to the overall
structure of actually-existing markets – mechanisms by which incumbent
big businesses, and capitalistic arrangements broadly, benefit from rigged
markets, at the expense of workers, consumers, taxpayers, and mutualistic
alternatives to the statist quo. These three are:
1.    Government monopolies and cartels: in which government penalties
directly suppress competition or erect effective barriers to entry
against newcomers or substitute goods and services;

2.    R egressive redistribution: in which property is directly seized from
ordinary workers by government expropriation, and transferred to
economically powerful beneficiaries, in the form of tax-funded subsidies
and corporate welfare, taxpayer-backed sweetheart loans, the
widespread use of eminent domain to seize property from small owners
and transfer it to big commercial developers,4 etc.; and
3.    Captive markets: in which demand for a good is created, or artificially
ratcheted up, by government coercion – which can mean a
direct mandate with penalties inflicted on those who do not buy in;
or a situation in which market actors are driven into a market on
artificially disadvantageous terms as an indirect (perhaps even unintended)
ripple-effect of prior government interventions.”

All these things the government does are the end result of decades of lobbying. People who have money exchange it for power, and people who have power exchange it for money. Its always been that way.

“With these three mechanisms in sight, a quick way to gloss the free-market
anticapitalist thesis is this: we hold that many of the recognizable patterns
of capitalist economics result from the fact that certain key markets –
importantly, the labor market, housing rental market, insurance and financial
markets, and other key markets are rigged markets. And In particular,
that they are often indirectly-created captive markets,”

The markets are rigged by people with the power to rig them. How do you prevent people from accumulating that power? He never says, I can only assume he believes, like Proudhon, that people are paragons of virtue.

“1.    The Land Monopoly: government concentration of ownership of
land and natural resources through the enforcement of legally-fabricated
land titles (such as preferential land grants to politically-connected
speculators, or literally feudal land claims in Europe).
Since Tucker, the land monopoly, already key to the Gilded Age
economy, has radically expanded – with the frequent nationalization
of mineral and fossil fuel resources throughout, and the emergence
of local zoning codes, complex housing construction codes,
land-use restrictions, “Urban Renewal,” for-profit eminent domain
and municipal “development” rackets, and a host of local policies
intended to keep real estate prices high and permanently rising. In a
freed market, land ownership would be based entirely on labor-based
homesteading and consensual transfer, rather than on military conquest,
titles of nobility, sweetheart “development” deals, or eminent
domain seizures, and land would tend (ceteris paribus) to be more
widely distributed, with more small individual ownership,   dramatically
less expensive, with more ownership free and clear, and could
as easily be based on “sweat equity” and the homesteading of unused
land, without the need for any commercial cash exchange.”

“2.    The Money Monopoly: government control over the money supply,
artificially limiting the issue of money and credit to a governmentapproved
banking cartel. Tucker saw this not only as a source of
monopoly profits for the incumbent banks, but also the source of
the concentration of capital (and hence economic ownership) in the
hands of a select business class: credit and access to capital were artificially
restricted to those large, established businesses which the large,
established banks preferred to deal with, while government-imposed
specie requirements, capitalization requirements, and penalties on
the circulation of alternative currencies, suppressed competitionfrom mutual credit associations, labor notes, land banks, and other
means by which workers might be able to pool their own resources
and access credit on more advantageous terms than those offered by
commercial banks.

“3.    The Patent Monopoly: government grants of monopoly privileges
to patent-holders and copyright holders. Tucker argued that patents
and copyrights did not represent a legitimate private property claim
for their holders, since it did not protect any tangible property that
the patent-holder could be deprived of, but rather prohibited other
market actors from peacefully using their own tangible property to
offer a good or service that imitated or duplicated the product being
offered by the holder of the so-called “Intellectual Property.
4.    The Protectionist Monopoly: Tucker identified the protectionist
tariff as a “monopoly,” in the sense that it artificially protected politically-
favored domestic producers from foreign competition: the tax
on imports was explicitly intended to make goods more expensive
for consumers when they came from the other side of a government
border, thus allowing domestic producers stay in business while selling
their wares at higher prices and lower quality than they could in
the face of unfettered competition. Besides protecting the bottom
line of domestic capitalists, protectionist monopoly also inflicted artificially
high costs of living on the working class, due to the ratcheting
up of the costs of consumer goods.

Of the Big Four, the Protectionist Monopoly has seen the most
reconfiguration and realignment since Tucker’s day; with the rise of
Multi-National Corporations and political pressure in favor of neoliberal
“free trade” agreements,9 the tariff has declined noticeably in
political and economic importance since the 1880s. However, tariffs
remain a distorting force within limited domains (for example, the
United States and European countries still maintain high tariffs on
many imported agricultural goods). Moreover, the specific mechanism                                                                                                    of import tariffs was much less important, for Tucker’s purposes,
than the overarching aim of protecting connected incumbents
from foreign competition. In the 1880s, that meant the protectionist
tariff. In the 2010s, it means a vast and complicated network of import
tariffs on incoming foreign goods, export subsidies to outgoing
domestic goods, the political manipulation of fiat currency exchange
rates, and other methods for political control of the balance of international

That sounds like what I think of as libertarianism more so than Proudhon.

“Activist libertarians have often condemned, on a moral or political level, the government’s
War on Drugs, or Border Apartheid, or other government efforts
to criminalize the poor and subject them to imprisonment for victimless
crimes. As well they should – these government “wars” are nothing more
than massive violence and cruelty directed against innocent people.But
there has not yet been enough recognition of the structural, economic byproducts
of government policies which confine, dispossess, terrorize, and
stigmatize minorities, immigrants, and the poor generally.”

“These policies
lock one out of every three African-American men in a cage, often for
years at a time, take away years of their working life, expose their homes,
cars and money to police forfeiture proceedings, subject them to humiliating,
sub-minimum wage prison labor (often outsourced to politicallyconnected
corporations), and permanently stigmatize them as they try to
reenter the labor market and civil society.”

And yet, all that isn’t enough to dissuade them from violating the law.

“These polices which constantly
threaten undocumented immigrants with the threat of arrest, imprisonment,
and exile from their homes and livelihoods, cutting them off from
nearly all opportunities outside of immediate cash wages and exhausting
under-the-table manual labor; locking away opportunities for education
behind proof-of-residency requirements; and putting them constantly at
the mercy of bosses, coworkers, landlords and neighbors who can threaten to turn them in and have them deported for retaliation, leverage, or
simply for the sake of employee turnover. Such a massive system of government
violence, dispossession, and constraint on livelihoods is sure to
have massive impacts on the conditions under which many poor and
legally-vulnerable people enter into labor markets, housing markets, and
all other areas of economic life.”

Stay in your own country or come here legally. These people know they are violating the law and they do so voluntarily.

“When we picture freed-market activity, what does it look like? Is our
model something that looks a lot like business as usual, with a few changes
here and there around the edges? Or something radically different, or radically
beyond anything that currently prevails in this rigidified, monopolized
market. Do we conceive of and explain markets on the model of a commercial strip mall: sanitized, centralized, regimented, officious, and dominated
by a few powerful proprietors and their short list of favored partners, to
whom everyone else relates as either an employee or a consumer? Or do
we instead look at the revolutionary potential of truly free markets to make
things messy – how markets, without the pervasive control of state licensure
requirements, regulation, inspections, paperwork, taxes, “fees,” and the
rest, so often look more like traditional image of a bazaar: decentralized, diverse,
informal, flexible, pervaded by haggling, a gathering for social intercourse
just as much as stereotypical commerce, and all of it kept together by
the spontaneous order of countless small-time independent operators, who
quickly and easily shift between the roles of customer, merchant, leisureseeker,
independent laborer, and more besides?”

I just want to point out that places known for markets like this are generally extremely poor. In a system where wealth is created to the extent it is (or was) in the US, you get consolidation as competition weeds out the weak. That’s why we needed anti-trust laws to prevent the most capable from completely dominating the economy.

Next time, Murray Rothbard and Obama’s  libertarian streak.



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