“In fact, progressives very often get the story quite wrong in characterizing issues as “government versus market.” Certainly the current financial crisis provides an obvious example of such confusion. No one was really pushing for “deregulation” in the sense of getting the government completely out of the market.
The financial industry’s agenda was to get one-sided deregulation. They wanted to preserve the government security blanket of “too big to fail,” while removing prudential controls that limited their ability to take on risk. In effect, what the financial industry wanted (and got) was government insurance that they didn’t have to pay for. This surely is not the libertarian agenda; this is the agenda of a politically powerful industry (with allies in both major parties) that will get everything it can out of Washington.
In short, I would like to see more of the anti-corporate side of the libertarian agenda. There may be many areas in which libertarians and progressives take opposing positions, but there are many areas in which we should have common ground. I am not interested in keeping the scorecard. I just want to see libertarians be as aggressive in confronting the interventions that support corporate power as they were in confronting Social Security.”
Excellent piece on corporate libertarianism by Dean Baker at Cato.
Obviously, I think the general thrust of libertarianism is more right than that of socialism, but it’s sadly true that libertarians are usually blind to the anti-individualism and corruption of businesses but alert to the same thing in the state.
Nice post. The quote below captures the essence of state capitalism, and of the kind of “privatization/deregulation” promoted in venues like the Adam Smith Institute:
“They wanted to preserve the government security blanket of “too big to fail,” while removing prudential controls that limited their ability to take on risk.”
Yes! It’s important to look at this from the perspective Chris Sciabarra calls “dialectical libertarianism”: i.e., viewing a particular state intervention in terms of its relationship to the whole system of power, rather than as a whole. Viewed in this light, the kind of “deregulation” the state capitalists favor (leaving the fundamental structure of state-enforced privilege intact while removing secondary restrictions on the abuse of that privilege) is actually a net increase in statism. OTOH, so long as the fundamental structure of privilege is in place, secondary government regulations limiting the privileged party’s discretion in exercising that privilege are a net reduction in statism.
I wrote about it in The Freeman:
http://fee.org/articles/in-brief/the-freeman-free-market-reforms-and-the-reduction-of-statism/
Thanks Kevin –
I wondered if I was the only one who thought that way…
I guess that’s why you need intellectual community..
I love that phrase – dialectical libertarianism.
I think of these things from the point of view of language – which means context. – that is, not all government action is state action,…state being the theoretical apparatus I oppose, while government is the institutionalization of statism that doesn’t necessarily always promote it…and can be coopted in favor of civil society.
This makes me a kind of “impure” libertarian to some…
Thanks a lot and looking forward to reading your piece.
My view is that ‘the State’ is the taxing government which controls the money supply through fractional reserve banking and fiat currency. Take this function away from the government and you have, no state schools, no war spending etc.
” Viewed in this light, the kind of “deregulation” the state capitalists favor (leaving the fundamental structure of state-enforced privilege intact while removing secondary restrictions on the abuse of that privilege) is actually a net increase in statism”
This is good, some concrete examples from the real world would be excellent.
Hmmm…I agree with Kevin theoretically, but, prudentially, the history of every increase in government power (even of police powers, antitrust, etc) inevitably leads to abuse by corporate power) – so, practically, I’m not sure that disengagement from the state altogether isn’t the best way to go…which leaves me on the same side as many at Mises, though for probably less ideological reasons.
mo: Lila’s example of restrictions on the practices of state-privileged banks would be one. In the article I linked in the comment above, I cited an example involving pharmacists, if you want to take a look.
BTW, the essay Baker references by Roderick Long (“Whip Conflation Now”), in the November issue of Cato Unbound, is worth reading. So are the other essays by Long, in which he identifies big business as the primary beneficiary of big government and criticizes both mainstream right-wing libertarians and mainstream big government liberals for pretending that big business and big government are at odds.
The TOC for the entire issue is here:
http://www.cato-unbound.org/archives/november-2008-when-corporations-hate-markets/
Thanks Lila.
This is an important and often over looked issues. The issue seems to be complicated since, unfortunately, some capitalists think you’re a socialist if you are opposed to special treatment for corporations– ironically the opposite is the case with a free and equal market.
Also unfortunate is that many progressive tow the “lets tax corporate windfall profits” line propped up by the Democrat establishment which is divisive, anti-freedom and doesn’t even touch the root of the problem. I don’t think that Deans piece really does this issue justice – my list of corporate libertarianism issues include:
– Corporate welfare, such as the bailouts. http://en.wikipedia.org/wiki/Corporate_welfare
– Corporate personhood where corporate entities are granted rights like a living person. http://en.wikipedia.org/wiki/Corporate_personhood
– Lack of corporate shareholder liability. If you own a small business you are legally responsible for it. If you own a company you can be legally shielded. This is a huge deal that has no basis in a free market.
– Over-regulation. While costing companies money, over-regulation red-tape adds a much higher burden on small businesses due to the economy of scale.
Issues of patents and copyrights are also considerations but they are divisive with reasonable points on both sides IMO.
BTW- thanks for the blog roll link. 🙂
Hey Brian –
Those are my thoughts exactly. It’s hard for me to get some people on the right to see the extent to which corporations are creations of the “fiat law” that I was talking about. in a recent Lew Rockwell piece.
It’s amazing how much you can protect yourself from liability, tax, and accountability when you are a corporation rather than an individual. Now, given the irresponsibility of tort litigation, in some instances, you might think that was warranted. But it’s not clear to me that tort lawyers per se are the problem. Does an adversarial legal system, voir dire jury selection, and a number of other things exacerbate arbitrary court decisions and “windfall” settlements /punitive damages and put business activity unfairly at risk (thus requiring corporations to have special protections)…
OR
is it corporate special protections that lead to people gaming the system?
I don’t know.
And I’m not about to wait around to find out the root causes of things….
I’m for acting to separate ourselves from an essentially corrupt system where the cost of tweaking is greater than the benefits….
Ergo, let the whole thing fall of its own weight, get out of the way, cut your losses and put your money (such as it is) in your shoe and run….
of greenery, having a view is very important to the value of the property.