Thursday, June 25, 2009
Capitalists, libertarians, and anarchists; oh my!
I have been arguing with anarchists and libertarians lately.
I can not think of a good way to consolidate my arguments without the context of responding to something specific, so it occurred to me that, given how much I've already written, it would be simple to just use what I already have.
I feel that given how much influence these ideas have had on the direction the US has gone in over the past few decades, and that we are the most powerful nation on Earth, this topic is one of the most important social issues there is.
Because there is a lot, I am breaking it up into several pieces.
The first (actually the last chronologically, but the first I am posting) was a blog essay which an anarchist friend sent me a link to attacking democracy. (He mentioned the caveat of not supporting the market economy. I have already written before here about how a market economy will naturally arise in the absence of government regulation.)
While the arguments here are not necessarily universal among anarchists, libertarians, and capitalists, some of them are common, or are at least similar.
I don't have the responses here, but that's mainly because there really weren't any substantial responses, just general insults and links to other people's writing. If you are interested, you can read both the original essay and all of the comments here:
Further, democracy is a political system, not an economic system. The author treats the two as if they were interchangeable. They are not. The economy can be one of the things which government regulates.
If you are in class, and you have a group project, and each person has a different idea of what to do it on, no student fears his classmate will attack him for his opinion. They may argue about it, but ultimately which ever idea is most popular will win out. There is no coercion or threat involved.
That is democracy.
Not everyone gets their way, but it is understood that it is a group project, and things have to be decided or else everyone is going to fail.
In order to say that riding a bike to the store is good, you must say riding it everywhere is good. It is not good to ride a bike from your bed to the living room, nor is it good to ride it from Oakland to Japan. Since it isn’t good in every imaginable scenario, it must not be good for anything at all.
A free market society means the richer you are the more “votes” you get.
He suggests roads could be maintained privately. There is no model to support that idea. Existing toll roads take decades to pay for themselves (and, incidentally, the toll roads I have been on in Ohio were much worse maintained than average). Bridges never pay for themselves. No company would go into a market with so low a return when there are other options available.
He suggests also that all market interactions be based on contract.
Who enforces those contracts?
How do they enforce them when there is no public court or police?
If courts are private, what stops them from siding with whoever is paying their fees (as we see happen consistently with arbitration companies and which is the reason almost all corporations prefer to use them)
They could just as easily cut hours of everyone equally. Better yet, the company could be worker owned, in which case they can divide up the amount of thier own labor which was diverted to the managers and owners who do not do any of the actual work yet make far more of the income.
For all the bitching Ford does about employee costs, its CEO made $21 million – in a year they had huge losses and needed government help. Meanwhile Toyota, which is doing far better, paid their CEO less than 1 million.
That 20 million would have gone a long way to paying union wages, health care benefits, or retooling factories to make more efficient cars.
And that is not counting the CFO, the assistant CEO, the president and vice of the board of directors, product managers, or any of dozens of top level manager with million plus annual compensation.
If a company can not afford to provide a living wage to its lowest paid workers, than it is expanding faster than it sustainably can, and it needs to stop.
In the real world the rich are rich due to inheritance, the middle class send their kids to private school and college, and poverty is inherited the same way. Under the free market (or anarchy) their is no provision for the poor, the elderly, the disabled, or the abandoned young. Individual charity alone does not have the resources to help these groups.
The solution to rent control is to outlaw all ownership of rental housing.
You should not be able to charge someone just to live on a space on the Earth. You should not be able to make money when you are not actually doing any work. If every rental were put on the market at once, buying a house would become affordable.
I believe land ownership other than the land you yourself live on, for the purpose of profit, is inherently immoral, as is any other way of generating money without producing something of value to society.
If you personally built the house (not put up investment money, but got out there with a hammer and nails) then charge whatever the market will bear. But buying something because you have the capital just to charge someone rent? You are not providing anything of value because the house was already there, and if you didn’t “own” it the same tenants could be living there for free.
Something which is purely deductive is not science. A scientific theory has to be able to make real-world predictions given a set of circumstances, and when implementing those circumstances, the predictions observed.
Another is the legal system. A arbitration company has no way to enforce the ruling. A private security force, without any police or law, would be indistinguishable from a mercenary force.
Tragedy of the Commons
A failure of intelligent long-term regulation will hasten humanities trail along the wake of the yeast in a beer barrel – drowning in the waste of our own gluttony.
[the person responds that I should read the work of Ludwig von Mises, and again claims that I must not understand economic theory]
I actually agree with much of what Mises says, and believe he makes valid points which many on all sides often fail to acknowledge.
I agree entirely with his position on government induced inflation and on patents, for example.
However, he does make some fundamental errors which invalidate some of his conclusions based on them.
This is demonstratively false.
The only irrefutable action axiom is that humans act. It can not be taken as axiom that humans act rationally in their own long term interests, particularly when the optimal outcome requires a level of individual sacrifice.
For example: http://www.economist.com/sciencetechnology/displayStory.cfm?story_id=12202559
Pricing alone does not solve the problem, because it does not take externalties (such as pollution or a finite rate of resource regeneration) into account.
It goes far beyond gambling however:
Mise does address externalites, for example injuries to employees
blaming them on market interference by governments which “allow” them to be unaccountable. However, he fails to explain who, in the absence of any government at all, would enforce labor standards, and how. If the problem is caused by a lack of regulation (or “deficient laws”), how would removing all regulations solve the problem? (Later Mises does implicitly acknowledge that this is neccesarily the role of government: “governments are [in a hypothetical ideal world] devoted exclusively to the task of protecting the individual’s life, health, and property against violent and fraudulent aggression.”
This then begs questions of the form and structure of said government.
Even were a government to allow free trade, the dull ignorant natives might still choose not to extract and sell a resource at any price – yet the other nation would still have desire for it, no less than if it were a protectionist policy which kept them from it.
In other words, if a population chooses, for whatever reason, not to utilize a natural resource, it is acceptable, or even ideal, for them to be taken by force by those who would utilize them.
Aside from the practical impossibility of privatizing extremely large public resources (the ocean, the atmosphere, a large river (anyone dumping or fishing in their “own” section of river affects everyone downstream of them ) there remains the question of how initial prices of commons are to be set, who they are paid to, and if there is no such entity then how the distribution is to occur.
but offers no evidence, either theoretical or examples, to support it.
I won’t argue the merits of welfare for the overall benefit of society here, but instead point out that regulations to ensure equality does not necessitate any form of welfare.
It is possible to eliminate (or at least reduce) inequalities simply by taking steps to level the playing field. A major omission is the issue of inheritance. People who inherent wealth do not earn said wealth by contributing something of value to humanity. They just get lucky in which parents they are born to. Similarly, education, living environment, etc are not in an infants control, and these factors incontrovertibly have a direct effect on the individuals access to the means of wealth generation later in life. This itself is an external privilege, no different from the caste system (which he says restricts the market)
Actually, that IS what I suggest. The American middle class consumes far more than it’s share of world resources, at the expense of the rest of the world, (upheld only by having a military budget equal to the rest of the world combined).
“Many who are aware of the undesirable consequences of capital consumption are prone to believe that popular government is incompatible with sound financial policies. They fail to realize that not democracy as such is to be indicted, but the doctrines which aim at substituting the Santa Claus conception of government for the night watchman conception.” - Ludwig von Mises
I do not deny those. I question whether they are ends to themselves past the point where a society has obtained security in the basic necessities of life, and if they are in fact so desirable to be worth the trade off of gross (unearned) inequalities.
Realize that I accept that inequalities will exist due to differences in how hard a person works or how innovative they are.
It comes down, ultimately, to a moral issue.
This same situation, on the level of a society making large scale decisions, is all true democracy is.
It might be contrary to a maximization of wealth generation that a society collectively decides to enact an economically restrictive law. However, that is their choice.
In fact, in both the group and any true democracy, no one is forced to go along – however, if they do not, they can be ejected from the group because their association by other members is voluntary. As such, if someone objects to the laws of the US, they are free to move permanently to another country.
Part 2 of 3: http://biodieselhauling.blogspot.com/2013/03/part-2-gas-tax-digression.html
Part 3 of 3: http://biodieselhauling.blogspot.com/2013/03/the-last-one-anarchists-this-time.html