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What Social Animals Owe to Each Other

Saturday, September 02, 2006

Missing the Boat -- Again

The blogosphere is alive with discussion of what's been happening to compensation for regular workers over the last few years. See the several posts and comments at Cafe Hayek. I've addressed the issue here, but I want to add some points.

Libertarians constantly miss opportunities to appeal to good-faith left-leaners who are concerned that working people get the short end of the stick. Yes, they are subject to economic fallacies that should be addressed. Yes, they may misuse or misinterpret wage and total-compensation statistics. Yes, they may fall victim to demagogues, such as Paul Krugman. Yes, people generally live far better today than they lived 20 and 30 years ago -- although we don't give enough attention to how the Fed's easy-credit policies can create illusions of prosperity or how the government has inflated the price of housing, food, medicine, education, and energy. (See Jack Douglas's article.) All those things should be explained patiently and clearly.

But I fear that we miss the forest for the trees. We live in a corporate state, not a free economy. What are we arguing about? Whether the corporte state treats workers better than the left says it does? Big deal! What does that do to advance the cause of liberty?

It seems to me that all it does is make us look like corporate-state apologists. No thanks. There are enough of those.

These two statements are consistent:

1) the middle class is doing better than ever (leaving aside the scary debt question);

2) it's not doing as well as it should be doing.

Regarding 2) the question is why. If the lord of the manor comes into some money and raises the living stardard of his serfs, we would hardly tout that fact to show that feudalism is fine. I know the analogy is overdrawn, but many libertarians are doing something similar. They debate the numbers without pointing out what those numbers paint a picture of. It's not a picture of a laissez-faire economy; it's a picture of a corporate state -- the systematic intervention largely on behalf of incumbent business interests that tamps down competition and squelches alternatives, including self-employment, for many workers.

When I say that the middle class, and those below, are not doing as well as should they be doing, I mean simply that if competition were truly free -- if all transactions were voluntary -- these classes would be wealthier. The proper "distribution" of wealth is something only the market should determine. There are no good grounds for condemning the "shares" "allocated" by the unfettered market process, because the market process is just a fancy term for the countless consensual transactions it comprises. There is no actual allocation. To object to the outcome of that process (which is always a snapshot, because it is always in flux) is to favor, at least implicitly, interference with consensual transactions; that is, it is a call for violent inteference with free exchange. That would be immoral, as well as wealth-destroying.

Libertarians: wake up! Make the technical corrections, but be sensitive to how it sounds when you leave things at that. Keep your eye on the ball!

Cross-posted at Liberty & Power.

Addendum: Here's an example of what I mean from the Wall Street Journal. Notice the lack of reference to the constellation of business privileges that constitute the corporate state. Invoking educational reform and pro-growth policies doesn't count.


Per Bylund said...

Yep, you got it absolutely right. This is not only an issue of Carsonist vulgar libertarians. This is also a failure to realize what is really going on - and to totally misunderstand the fact that free market logic is applicable on the free market only.

People do generally choose the best alternative available and we should accept whatever choice they make. The problem is the number of alternatives is forcefully limited and the remaining alternatives are all worse than they would be were it not for state regulation. One could argue there is no choice if all the available alternatives have already been "corrected" to comply with state regulations...

Per Bylund said...

I think I need to clarify the second paragraph in my previous comment. What I meant was that we should accept people's voluntary choices, but we should not accept the alternatives the state "forces" us to choose from. The alternatives would be better, more varied, and there would be a whole lot more of them were it not for state regulation.

So yes, people do choose the subjectively assessed best alternative available. I have no problem with this, I accept and respect it. But a large number of people's choices have forcefully been taken away from them. That's oppressive.

Sheldon Richman said...

Per, I second your point. When someone is given the choice "your money or your life," he obviously chooses the best alternative between those provided. But that hardly makes the situation an example of free choice.

Imagine looking through a fixed telescope and seeing cows wandering around. You might assume they are free to go as they wish -- until you move back and see that they are in a corral.

Anonymous said...

The right does have an anti-corporatist faction, witness the new book by Timothy Carney: The Big Ripoff - How Big Business And Big Government Steal Your Money with an intro by Bob Novak and a recommendation by Ron Paul on the back cover.