Earth to Libertarians: Private Parties Have Coercive Power Too

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I’m sick of the free pass given the libertarian blather, “The state is the only source of coercive power.” I doubt that many non-libertarians buy that assetion, but they too often remain silent because most libertarians are rabid on that issue and arguing with them is like talking to a wall. But since that bogus assertion has been showing up increasingly in comments here as right-wing plants are becoming more common, I might as well do a quick shred, since it does not take much effort to show this claim is nonsense.

Let’s look at some simple empirical examples of why this pet argument just ain’t so. The first comes from Tom Ferguson:

American history is replete with examples of business groups and individual firms retaining vast armies of military and paramilitary forces for long periods of time. In the nineteenth century many railroads kept private armies. The Pennsylvania Coal and Iron Police ran their own Obrigkeitsstaat [authoritarian state] for decades. General Motors maintained the Black Legion; Ford sported a veritable Freikorps recruited by the notorious Henry Bennett; and any number of detective agencies, goon squads, “special consultants,” and wiretappers have also been active. . . . Force on such a scale potentially menaces competitors, buyers, and suppliers almost as much as it does workers.

Some modern versions of coercion don’t involve actual harm, but credible threats. For instance, I know three different lawyers who have been suing banks who have gotten ugly warnings (and some follow-up action, like break ins and messages specifying where children were on specific days; one is spending $20,000 a month on bodyguards).

And pressure can be financial rather than physical. Recall the HB Gary plans against Glenn Greenwald. They clearly planned to destroy his professional reputation (not that that would be as easy as they thought) so he would have to choose “career over cause”. But in the US, where jobs are hard to come by and safety nets are frayed to non-existant, someone over 35 and/or with kids who is not independently wealthy or is self employed with a very solid franchise is economically vulnerable.

Let’s consider another example. A friend of mine opened the Dun & Bradstreet office in Moscow in the 1990s. That meant selling information in a country which was and is not big on transparency, making the initiative a risky proposition. She says she is the only person ever to have sued a Russian oil company, win in court, collect the money, and live to tell the tale. In her day in Russia, it cost $5000 to have someone killed, which was actually a lot in local terms. It was expensive because you had to murder three people to cover your tracks properly: the target, the assassin, and the person who made the arrangement to hire the killer. The last person was costly to eliminate, they were usually much higher caliber and hence more wary than the assassins.

Note there was no state power in this little murder ring: all were private contractors. Indeed, the sort of weak state that libertarians celebrate typically makes for fertile breeding grounds for all sorts of private goon squads stepping into a power vacuum. And thuggery works, witness the rarity of my friend’s evident insanity in pursuing an oil company deadbeat.

More broadly, the fact that coercion is not blatant does not make it any less coercive. From Robert Heilbroner in Behind the Veil of Economics:

This negative form of power contrasts sharply with with that of the privileged elites in precapitalist social formations. In these imperial kingdoms or feudal holdings, disciplinary power is exercised by the direct use or display of coercive power. The social power of capital is of a different kind….The capitalist may deny others access to his resources, but he may not force them to work with him. Clearly, such power requires circumstances that make the withholding of access of critical consequence. These circumstances can only arise if the general populace is unable to secure a living unless it can gain access to privately owned resources or wealth…

The organization of production is generally regarded as a wholly “economic” activity, ignoring the political function served by the wage-labor relationships in lieu of baliffs and senechals. In a like fashion, the discharge of political authority is regarded as essentially separable from the operation of the economic realm, ignoring the provision of the legal, military, and material contributions without which the private sphere could not function properly or even exist. In this way, the presence of the two realms, each responsible for part of the activities necessary for the maintenance of the social formation, not only gives capitalism a structure entirely different from that of any precapitalist society, but also establishes the basis for a problem that uniquely preoccupies capitalism, namely, the appropriate role of the state vis-a-vis the sphere of production and distribution.

Libertarianism does a great disservice to the debate about the most productive relationship between the state and private sector, which is an ongoing challenge as economies and societies evolve. It simply denies that the private sector is intrinsically dependent on the state for key functions for it to perform well, and ignores the fact its ideal of a minimal state does not scale at all. Similarly, many forms of enterprise show considerable economies of scale and hence will dominate the political realm if the political sphere is not allowed to constrain the economic realm when broader society prefers to impose rules (for instance, via product safety and truth in advertising laws so that consumers do not have to spend considerable amounts of time researching purchases).

Although the economics discipline has also unwittingly reinforced the idea of the separation of the political and economic arenas, the spectacle of major financial firms becoming even more influential after nearly destroying the global economy has put power dynamics front and center. “Political economy” was the new buzzphrase at the April INET conference. Let’s hope that we see more recognition of the fact that commerce both depends upon and influences the societies it inhabits. Markets are not sacrosanct, but must be judged and if need be, reshaped based on how well they server their broader constituencies.

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271 comments

  1. Magpie

    As someone who has spent a good portion of my life in underdeveloped countries, all this is very familiar.

    In many places, to silence an opponent, trade unionist, civil/human rights activist is as easy as talking… to the nearest police station chief. Way easier than in Russia. And much cheaper, too.

    I’m currently living in a developed country, and these more outrageous things seem behind, but even here I would not like to cross some characters.

  2. attempter

    This sums it up well. Although both aspects are important, the second, structural coercion regime is far more important than the de jure thuggery, since the latter is just a supplement to the systemic economic coercion.

    We just saw the sublimated thuggery of the SCOTUS on behalf of the thieving telecoms. Where society has been arranged so that using a cellphone is becoming a necessity (with telecom lobbying playing a big role in that arrangement), and where a handful of oligopolists dominate the market with government assistance, and where these oligopolists collude to present a united front in imposing these forced arbitration “contracts”, no honest person would claim that this isn’t systematic coercion.

    That’s just one typical example. Every sector, and the system as a whole, has this overwhelmingly coercive character.

    You’re right, it’s impossible to talk to most greed fundamentalists, AKA “libertarians”, about this. They either deny it’s happening at all, or else they punt and say “this isn’t a free market”, but blame that on the government rather than the corporate/government nexus. They want to misdirect from the puppetmaster to the puppet.

    How ironic that it’s socialism and anarchism which are often called “utopian”, when in fact nothing in all of history has been more utopian and elusive than this mythical “free market”, which has never existed anywhere but in the market Taliban’s ivory tower.

    Of course, most of them know this perfectly well. Their ideology is really nothing but a lie. They’re really just common criminals.

    Anarchism is the only coherent and moral political philosophy because it consistently opposes all coercion, all concentrated power. It recognizes that concentrated power is always a nexus of state and private power, that any attempt to untangle these from one another is arbitrary and fictive, and that the whole complex must be resisted and eradicated.

    Happy May Day!

    1. Dirk77

      Thanks attempter for continuing to be FOR something. That doesn’t mean I won’t conclude your ideas are flawed like mine and everyone elses. I just mean only people being for something get anywhere ultimately. I will get around to those links you mentioned a few months back when I find the time.

    2. Anonymous Comment

      Happy May Day to you as well [belated as I am].

      The initial problem with even considering ‘Anarchy’ as a solution to the capture of politics by certain business interests is that there is a wide variance as to what most people perceive that word to mean. In my experience most people think of ‘anarchy’ to mean lawless mayhem, where might makes right and winner takes all.. a la ‘Mad Max’.

      It would seem that only the rich, well-connected, physically impressive, and/or exceptionally sneaky/amoral would tend to excel in that kind of environment. With those who think of anarchy in this way… using the term ‘anarchy’ to name what you want is not gonna get you very far. There is a knee-jerk reaction that resists the conversation because the outcome seems to frightening. Then it becomes those who want anarchy, but cannot get the message across, simply take their freedom by force, which encourages more of a police-state reality… which creates the exact opposite effect of what you/they claim to desire.

      Perhaps there is better word for what you call ‘anarchy’?

      1. attempter

        Certainly. If you don’t like anarchism, a synonym is democracy.

        That is, true, direct democracy, including economic democracy. These democracies then interact with one another through true bottom-up federalism.

  3. F. Beard

    I am a libertarian. Government has a legal monopoly on force. Any private use of force except in defense of life and to some degree property is illegal.

    As for the rich scum who threaten others and their children, the DOJ should be on them like a ton of bricks and prosecute to the full extent of the law.

    1. me

      I think you missed the point of the article. The point is that the “rich scum” own the government or, if the government is weak enough, replace it with their own private government.

      I have never seen any libertarian make a proposal that can manage this problem. That is why while I like some of the ideas of the libertarians, I find them as unrealistic as communists, which is another ideology that also lives in some pretty dream world.

      1. F. Beard

        The point is that the “rich scum” own the government or, if the government is weak enough, replace it with their own private government. me

        The government should be strong in its proper jurisdiction and non-existent elsewhere.

        However, that ideal cannot be immediately obtained since there is much injustice from the current “mixed-economy” such as from the government enforced monopoly money cartel which has wrecked the economy again by driving the population into debt slavery.

        1. me

          “The government should be strong in its proper jurisdiction and non-existent elsewhere.”

          What is its proper jurisdiction?

          Just in case you think I’m being snippy I don’t have an answer to that either, and have yet to read one. There are just too many variables and they change over time as well.

          1. F. Beard

            What is its proper jurisdiction? me

            Our society is so unjust right now that that is a difficult question but in a healthy society many of todays’ issues would be mute.

            But ideally the government should have a monopoly on offensive force, enforce contracts, manage common resources such as the environment, provide a basic safety net etc.

            The purpose of the government should be promote maximum liberty and independence in its citizens so the government should shrink over time. If it does not then something is fundamentally wrong.

          2. craazyman

            Beard you’re giving me deja vu.

            Doesn’t sound like you’re much of a firebrand libertarian, maybe a “Save the Whales New Age Foo Foo” Libertarian, a Libertarian with a lower-case “L”, a libertarian, but not quite as soft and helpful as a librarian.

            What you wrote about the role of gov’t sounded sort of familiar to me. I think this says almost the same thing:

            “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

            Words are fuzy hammers and ideas are needle-thin nails. Not sure “libertarianism” would even stand up to some sort of linguistical deconstruction. There are a group of people and they have to relate with each other in some way that promotes the survival of the tribe. And so they create protocols for that inter-relation. Those protocols can be called “government” or “law” or “custom” or whatever you choose. Those protocols are what we at the Institute for Contemporary Analysis call the “Pilot Wave”, which is the human version of the mind wave that keeps minnows swimming in schools, how they all turn at once if you throw a pebble at them in a stream, or how geese fly in a V in the sky. Call it whatever you will, or even deny it exists. But it’s like denying that your mind exists. Even if you deny your mind exists, you still have one, doing the very denying itself. ha ah. Such it is with government and libertarians.

        2. Art Eclectic

          “The government should be strong in its proper jurisdiction and non-existent elsewhere.”

          You speak of the government like some foreign borg entity. Government is comprised of people. People are imperfect. People tend to act in their own rational self-interest whether they are part of private industry or the government.

          People are people. As long as a single human being holds power, that person is as likely to be corrupted as any other person. Expecting people to resist corruption is a fools game. We have laws and regulations because people are easy to corrupt. Failure to enforce laws and regulations is just as corrupt as not having any laws and regulations at all.

          People are prone to corruption and acting in their own self-interest. A role in government doesn’t change that simple fact, nor does it make government any more or less corrupt than private industry. Either remove all the shackles and let the beast consume itself or regulate the bejezus out of it and enforce the regulations. This hybrid we have not is clearly not working for anyone except the top 1%.

        3. Robert

          The large US government debt was driven by unfounded tax cuts for the rich in conjunction with increased spending.
          This was planned and intended to grossly inflate US debt for two reason.
          Firstly to enrich the rich and greedy sociopaths that thought it up, in tax savings and of course profits from increased government spending.
          Secondly they wanted to cripple the social welfare net because they wanted the majority of people at their mercy, to be exploited financially and sexually (these people are sick sociopaths so the second part is a sickening reality).
          For the libertarians, private property is an illusion put forward by sociopaths and narcissists in order to prey upon and exploit the societies they are a part of.
          The reality is the whole society always owns all of it’s resources and choose to give control of those resources to members of that society for the benefit of that society.
          The reality of libertarianism is that members with power have the right to kill members without power if they attempt to take that power and of course members without power, inevitably the majority, will kill the members with power (the minority) to gain that power ie libertarianism equals a constant unending state of conflict until the society collapses (proven by history).

      2. jdd

        Talk about blather.

        If the wealthy are going to monopolize power either through use of a government or through private power then the first established fact is that the rich running things is always going to happen. If that is the case then shouldn’t everyone be better off having a) cheaper oppression and b) not adding in a bunch extra powers for non-rich people to exert even more coercive force?

        The blog post is just plain ridiculous. I’ve never heard anyone say government is the only coercive force in the world. Hunger is coercive. That is a silly gossamer argument made by the rhetorically deficient.

        Libertarians say that government, in general, is a bad thing. Our founding fathers recognized that. It may be necessary to some extent (to protect against other governments, largely).

        It seems to me that anyone who thinks that the absence of coercion by those with resources is somehow the natural state of things is kidding themselves.

        Libertarians do have a solution. It is called private property and civil rights enforced privately. It does require some level of public or private governing power. The court system and some enforcement mechanism with a lot of due process and as much legitimacy as possible.

        Attributing anarchism to libertarians to make a tautological point is a waste of time.

        1. wunsacon

          >> Our founding fathers recognized that. It may be necessary to some extent (to protect against other governments, largely).

          In the body of the Constitution, its authors limited the *federal* government in the manner you describe, but left the “full power of government” in the hands of the states (subject to the limits in the Bill of Rights). The emphasis wasn’t so much on limiting government everywhere but on decentralizing government.

          Libertarians read too much into the founding fathers’ structuring of federal government. It’s not nearly the condemnation of government they make it out to be.

          1. Anonymous Comment

            Right. It was not about government being ‘bad’ that. Rather it is/was that the concentration of power tends to corrupt. Therefore, as you say, decentralization into the rights of states for the majority of decisions that effect daily life was the antidote.

            Also the various branches of government were meant to check and balance eachother. Sadly, mega-lobbyists have woven their own golden thread between them all.

        2. wunsacon

          >> Libertarians do have a solution. It is called private property and civil rights enforced privately.

          Private property and civil rights don’t exist when private interests are so wealthy that they can buy anyone off or when the government isn’t funded enough to perform its functions. That’s the lesson from Earth.

        3. Yves Smith Post author

          jdd,

          Sorry, I don’t know where you’ve been, but this argument comes up all the time. for instance, with Milton Friedman. So I suggest you do your homework rather than make spurious accusations.

        4. Patriot

          Since you are talking about private enforcement of the law via the courts, please answer the following questions:
          1. Have you ever litigated a case in the USA for an amount exceeding 10,000 USD?
          2. Have you ever sued an insurance company?
          3. Have you ever sued a bank?
          4. Have you ever taken a deposition?
          5. Have you ever defended a deposition?
          6. Have you ever hired a court reporter?
          7. Please give a ballpark litigation cost (excluding attorney’s fees) for a simple, rear end no-fault car accident case.

        5. Francois T

          “It is called private property and civil rights enforced privately.”

          Pray tell how the hell is this supposed to work in real life? Are you THAT ignorant of History as we know it? WHY do you think private enforcement of civil rights are restricted to very few specific situations?

          Do yourself a favor: Read the Supreme Court decision in Branderburg v. Ohio 1961 and come back to us. Your next post shall be much less peremptory.

    2. Cahal

      “I am a libertarian. Government has a legal monopoly on force. Any private use of force except in defense of life and to some degree property is illegal.”

      Half the post was on other forms of coercion e.g. credible threats [to workers], withholding resources, smear campaigns.

      Furthermore, I’m not even sure if the government does have a legal monopoly on force. Have you ever been to a nightclub? Isn’t half the point of private property that people are able to ‘defend’ theirs with some degree of coercion?

      1. bob goodwin

        I am the other libertarian who still frequents this haunt. Of course there are a ton of other coercive forces in society. Ones spouse for example, or children or parents? An employer will rightly assert coersion on an unfocused employee. As we amble up the stack, corporations and trade unions clearly have coersive power. The reason talking to libertarians seems like a wall (like talking to liberals about race…) is because the abuse of power is most corrosive at the state level.

        I think the reason that NakedCapitalism has attracted some libertarians is because of the bank bailouts. When that line was crossed the banks became as noxious as the government. I think that many libertarians in the trenches (and I would argue the tea party) are alarmed by the corporatist trends. The elite, however, are trying to repackage libertarian principles to sell stale corporatism. This is being done by both parties, so it is not fair to claim it a fault of Libertarianism (which does have legitimate faults).

        I would argue that the current spate of corporatism is an unwanted artifact of liberal desire to grow government, which let to greater state control, which led to greater corporate interest in being at the table.

        I have met Mark Zuckerberg a few times, and he is the genuine deal. Why is he rubbing elbows with Obama? He has ever interest in the world in being apolytical, and does not have time for anything besides growing a business. The reason is simple… Google wants the government to regulate the information which makes facebook viable. They do this because Microsoft before them wanted the government to regulate the information which makes Google viable? They do this because they were caught in a monopoly squeeze by the government when Sun and Apple and Netscape wanted the government to give them what they could not achieve in the market.

        Corporatism is the evil step child of an overcharged government.

        Government coersion has unintended consequences.

        1. Cahal

          “An employer will rightly assert coersion on an unfocused employee.”

          Well in that situation, yes. But you are ignoring the huge problems that arise from the asymmetry between your average employer and employee. In the real world the former usually has the bargaining power and hence they can force people to work long hours in horrible conditions for low pay; just look at the industrial revolution. Government intervention is justified here and indeed many labour laws we have now were implemented as solutions to an obvious problem.

          “the abuse of power is most corrosive at the state level.”

          Yes, but as a libertarian you acknowledge that there must be some state. As soon as there is, it is potentially hijacked by vested interests. It doesn’t matter how big or small the state is, it is always vulnerable to corruption, and this requires vigilance.

          You say the corporatism is a result of growing government, well I disagree. Since the 80s (ish), the vested interest have been pushing for shrinking government. Deregulation, lower taxes on the rentiers, privatisation leading to monopoly power and so forth. From the 18th century, half the point of the state was to actively regulate and tax away economic rent; this was a requirement of government, as not doing so would lead to feudalism (see today for proof). The banks have gained their power by reducing the power of the government to do this, not by increasing it.

          The other stuff, well, yeah there is a lot of crap going on in the upper echelons of society, but as I mentioned that is inevitable as soon as government is introduced. Shrinking it will not make these problems disappear.

          1. Just a thought...

            Interestingly, certain efforts to shrink government, i.e. deregulation, were never associated with an overall cutting of government expenditures. In fact, the breadth of government has become increasingly pervasive over time as has the country’s involvement in costly international activities, both of which coincidentally serve the interests of the financial elite. As the problems with deregulation became apparent, the cost of increased regulatory oversight was suddenly too onerous given budget constraints.

            Gee, if only we could afford better oversight.

    3. LeeAnne

      People are forced into every kind of behavior and attitude imaginable by the threat of loss of income every minute of every day in this oh so ‘free’ democratic country.

      1. F. Beard

        People are forced into every kind of behavior and attitude imaginable by the threat of loss of income every minute of every day in this oh so ‘free’ democratic country. LeeAnne

        Agreed! And how many of those jobs were created with the workers’ own stolen purchasing power via loans from the government enforced counterfeiting cartel, the banking system?

        Almost all of them? So I would bet.

        Solution?

        1) Bailout the entire US population.
        2) Abolish the government enforced usury and counterfeiting cartel.

    4. DownSouth

      F. Beard,

      Libertarianism is the one true faith of oligarchs, so I often wonder how you reconcile that with your self-proclaimed Christianity.

      Libertarians are true believers in search of heaven on earth. But because earthly paradises don’t exist, the libertarian lives in a world of half-truths. He bowdlerizes the bad, leaving only the shining beacon of laissez faire capitalism.

      But even from its very inception in the 16th century, capitalism-the-reality never lived up to the lofty boasts of capitalism-the-myth. In the capitalist pantheon, maximization of aggregate utility is the supreme deity. But other deities are given short shrift. For instance, as the middle class first emerged in the 16th century as a political and economic force, the former peasants turned workers often found themselves economically worse off in the new capitalist order than they had been in the old feudal order. As C.R. Boxer recounts in The Dutch Seaborne Empire:

      Although adequate unemployment statistics and other relevant materials are lacking, it is clear from numerous contemporary accounts of the Dutch Republic in its ‘Golden Century’ that economic expansion and national prosperity were accompanied by great poverty among many groups of workers, as happened later in England during the Industrial Revolution… As early as 1566 a Leeuwarden chronicler noted that, in sharp contrast with the wealth regents and merchants, stood the mass of the ‘humble, distressed, and hungry common people’… The poorhouses and workhouses also supplied women and children for industrial labour, and here again there is an obvious parallel with England during the Industrial Revolution. It is true that some steps were taken to check these abuses, such as fixing the textile operatives’ working day at a maximum of fourteen hours (!) in 1646; but thirteen years later a leading Leiden industrialist noted that many workers were living in overcrowded slums, and that some were forced to burn their beds and furniture to keep themselves warm in winter.

      Out of 41,561 households at Amsterdam in 1747, some 19,000 were living in squalid back premises, cellars, and basements.

      The former peasants turned workers didn’t fare well in the new political order either; as Boxer goes on to explain:

      The lot of the ordinary manual worker was hard; and the infrequency of overt unrest was due rather to the absence or weakness of the workers’ organizations (as Violet Barbour points out) than to the ‘paternal and enlightened regime of the upper-middle-class dictators’, as claimed by Professor G. J. Renier. It is true, however, that class differences in the Dutch Republic, as elsewhere, were usually accepted as an aspect of the eternal scheme of things. Moreover, the urban proletariat were unarmed, and the burgher militia or civic-guards could be relied on to obey the orders of the regents in the event of any conflict with the grauw.

      In the libertarian world, only the whip qualifies as coercion. But in the real world, there are two types of coercion—-the whip and necessity. But libertarians can’t even abide by this glaring half-truth. Throughout their sordid history, libertarians have never hesitated to resort to the whip when the coercive powers of necessity proved inadequate. As the Christian theologian Reinhold Niebuhr put it in Moral Man & Immoral Society:

      When economic power desires to be left alone it uses the philosophy of laissez faire to discourage political restraint upon economic freedom. When it wants to make use of the police power of the state to subdue rebellions and discontent in the ranks of its helots, it justifies the use of political coercion and the resulting suppression of liberties by insisting that peace is more precious than freedom and that its only desire is social peace. A rational analysis of social facts easily punctures this pretension.

      1. F. Beard

        Libertarianism is the one true faith of oligarchs, DownSouth

        Not really. Government privilege is their one true faith. I’ve debated so-call libertarians who were actually fascists but a liberal or progressive would never spot them.

        so I often wonder how you reconcile that with your self-proclaimed Christianity. DownSouth

        Then read the Bible. I suggest you start with 1 Samuel 8 where the Lord warns of centralized government.

        The Bible certainly teaches concern for the poor and condemns the oppression of them by any means but it is not a socialist manifesto. Nor is it a fascist manifesto.

        1. DownSouth

          F. Beard said: “The Bible certainly teaches concern for the poor and condemns the oppression of them by any means but it is not a socialist manifesto. Nor is it a fascist manifesto.”

          Then how can you declare your fealty to libertarianism, which is nothing short of a fascist manifesto?

          Maybe you employ the same cognitive contortions that the 16th and 17th century Dutch oligarchs did? Here’s how Boxer describes it in a chapter from his book titled “Gain and godliness”:

          [T]he English dictator [Oliver Cromwell] sourly remarked that the Dutch preferred gain to godliness. This was a reproach which was often leveled at the inhabitants of the United Provinces during their Golden Century, and many of them were far from being ashamed thereat. Typical of these unabashed profiteers was the Amsterdam merchant who, in 1638, told the Stadtholder to his face that not only would he continue to trade with enemy Antwerp but that if he could make a commercial profit by passing through hell, he would risk burning the sails of his ships in doing so. ‘For love of gain, the wide world’s harbours we explore’, Vondel had sung of the Amsterdammers of his day and generation; and it may be relevant briefly to consider in this chapter how the Dutch managed to square the precepts of a religion which denounced this life as a mere nothing (dit leven is gants niet) with the practices involved in their possession of a world-wide commercial empire. I also propose briefly to discuss how far Calvinism suffered a sea-change when transplanted from Geneva via Dordrecht to the tropics.

          1. F. Beard

            “Vondel had sung of the Amsterdammers of his day and generation; and it may be relevant briefly to consider in this chapter how the Dutch managed to square the precepts of a religion which denounced this life as a mere nothing (dit leven is gants niet) with the practices involved in their possession of a world-wide commercial empire.” via DownSouth

            Let me be clear; I do not defend any Christian sect. Most all of them appear to be in error of some sort. I do defend the Bible though – both Old and New Testaments.

            Here’s some quotes those Dutch should have known:

            Do not weary yourself to gain wealth, cease from your consideration of it. Proverbs 23:4

            A faithful man will abound with blessings, but he who makes haste to be rich will not go unpunished. Proverbs 28:20

            and this one too:

            It is the blessing of the LORD that makes rich, and He adds no sorrow to it. Proverbs 10:22

          1. F. Beard

            I’d rather read “The True Believer” by Eric Hoffer. KFritz

            I’ve read it.

            But actually, I have a science and engineering background with some knowledge of probability theory.

            The odds are on the side of a Creator.

          2. KFritz

            Great. Please name for me ONE example of a large society successfully governed by libertarian principles. If it can be done, isn’t it empirically probable that it would have been done by 2011?

    5. Tao Jonesing

      No, Beardy, you are not a libertarian as that term is used these days. You may be a classical libertarian, but most modern libertarians are actually neoliberal purists who follow the neofeudal corporatist teachings of Hayek, Friedman and Mises. Most modern libertarians should actually be called neolibertarians.

      When you start quoting from Hayek, Mises, Friedman and Rothbard, I might start worrying about you being a modern libertarian. You’re far too much of a free-thinker to lump yourself in with neolibertarian cultists.

      1. F. Beard

        You’re far too much of a free-thinker … Tao Jonesing

        Thanks!

        So Jesus was saying to those Jews who had believed Him, “If you continue in My word, then you are truly disciples of Mine; and you will know the truth, and the truth will make you free.” John 8:31-32 (New American Standard Bible)

        I read His word every day. So far, so good.

    6. Yves Smith Post author

      F.

      I don’t know where you get this “government has a legal monopoly on force” fantasy from. I told you in the good old US of A lawyers who cross big companies get threatened. They have the advantage of cheap access to the legal system for redress, which is the libertarian’s preferred answer to pretty much every problem, yet they are at a loss for effective responses. How is our lovely government gonna go after people who show up in a black SUV and break into your house but disturb nothing (neighbors witnessed this and did call cops)? One assumes the reason was to copy personal records and/or plant bugs.

      The whole point is private parties have power and can and do exercise it INDEPENDENT of government. Yes, they may also work in concert with government, but they are perfectly capable and often do using it all by themselves.

      And the second point is violence is not the only form of coercive power. As indicated in the post (which you appear not to have read) the threat of damaging someone’s reputation, which is tantamount to permanently reducing their standard of living, works well in most cases.

      1. F. Beard

        I don’t know where you get this “government has a legal monopoly on force” fantasy from. I told you in the good old US of A lawyers who cross big companies get threatened. Yves Smith

        And that’s legal?

        They have the advantage of cheap access to the legal system for redress, which is the libertarian’s preferred answer to pretty much every problem, yet they are at a loss for effective responses. Yves Smith

        Then I suggest wide-spread publicity of the offending party’s threats. And/or a change in laws.

        How is our lovely government gonna go after people who show up in a black SUV and break into your house but disturb nothing (neighbors witnessed this and did call cops)? One assumes the reason was to copy personal records and/or plant bugs. Yves Smith

        And that’s legal? No it isn’t.

        The whole point is private parties have power and can and do exercise it INDEPENDENT of government. Yves Smith

        Of course but may they use force legally? Not that I know of.

        Yes, they may also work in concert with government, but they are perfectly capable and often do using it all by themselves. Yves Smith

        Then the DOJ and FBI should be beefed up to put a stop to that nonsense.

        And the second point is violence is not the only form of coercive power. As indicated in the post (which you appear not to have read) the threat of damaging someone’s reputation, which is tantamount to permanently reducing their standard of living, works well in most cases. Yves Smith

        Look. I agree the system is out of balance and a massive reset is necessary followed by fundamental reform. What more do you want?

        But yeah, I skimmed your article and probable missed a nuance or two. But we are beyond nuances, we need radical reform, not patches to the existing system.

        You do a great job Yves.

        1. Yves Smith Post author

          Sorry if I got a bit stroppy, and per DownSouth, you may call yourself a libertarian, but your views appear to diverge from theirs in quite a few ways.

          The problem is enforcement is pretty defective on a whole lotta axes, even before you get to the possibility of bribes to the cops (which I doubt happened in any of the cases here). Consider women who are threatened by possessive former husbands/lovers. The threats are pretty clear, there are restraining orders in place, but the cops can’t do anything with a threat. Seriously. No law has been broken. The cops might as a courtesy monitor the woman’s home more closely but that’s as far as it goes. And a percent of women hounded like this do wind up dead at the hands of their ex.

          How can you find who is the source of anonymous threats? You can only go after the immediate source. In the case of the lawyers (one of whom did get a threat from the attorney on the other side, “if you keep this up you’ll get hurt), you can’t accuse Big Bad Bank, he’ll just say you have a screw loose and the perp could just as well be some angry client or creditor.

          1. Andrew

            Those are helpful additional examples, Yves, and are similar to the ones I thought of, and there are infinite others that wlare obvious to anyone who isn’t intentionally trying to not notice them.

            This just reminded me also, of the Sopranos episode where a guy wants to back out of a deal he’d made with Tony. The guy was going to sell Tony his beach front vacation home, but changes his mind. So Tony helps him change his mind back, by sending a few employees to sit in the water as close as possible to the guys house and blast music from huge speakers. The police are called and ticket the noisy boat with a fifty dollar fine, and order them to leave. Which they do. And then return. And return. And return. Until the guy and his family agree that there is no way for them to enjoy relaxing at their vacation home anymore so they sell it to Tony.

            Laws are broken. And enforced. And the coercive party has the resources and will to have his way. The fines are just added into the purchase price of the home.

          2. F. Beard

            and per DownSouth, you may call yourself a libertarian, but your views appear to diverge from theirs in quite a few ways. Yves Smith

            Thanks for noticing. I consider myself a true libertarian; there are quite a few fascist poseurs. I do want government to shrink but only to its proper size and only when its present size is no longer needed. And the sooner we have genuine monetary reform (and a bailout of the population) the sooner that can occur.

            How can you find who is the source of anonymous threats? Yves Smith

            You’ll laugh but seriously I would curse them to God. He knows who is responsible. I have on occasion cursed things and even institutions (such as the banking system) but rarely if ever have I cursed a person. I’m pretty sure it would be effective though if the person was guilty.

            Like a sparrow in its flitting, like a swallow in its flying, so a curse without cause does not alight. Proverbs 26:2

            The implication being that a deserved curse WILL alight.

            Now cursing people could become a dangerous habit so I recommend suitable discretion. :)

          3. Francois T

            “In the case of the lawyers (one of whom did get a threat from the attorney on the other side, “if you keep this up you’ll get hurt)”

            There are not 64 ways to tackle such a situation. Get to the lawyer who uttered the threat and turn the tables. Got kids, family or loved ones? Good private eyes will get all this info plus nice pictures of everybody with time, location, acquaintances, what they bought on their way from work, what kind of coffee they drank at Starbucks (Was it whole milk or soy?)

            Message should be clear: “Wanna play that game asshole? You be my guest. I’m gonna get hurt? That’ll make two of us…asshole! You really want to take a Neapolitan prune for your employer? Man! Your dedication is commendable; I’m impressed!”

            This, or fold and be required to bend over on demand. Even with Surgilube, Vaseline or Astroglide, it is a very unpleasant and humiliating experience.

          4. bob goodwin

            And this is the problem with lumping populations together, Yves. What you are railing against is fascism, not libertarianism. When you take the short cut of saying that honest libertarians ‘diverge’ from the norm because they are not fascist then I think maybe you are shooting bullets at the wrong target. I know quite a few tea partiers, and they are universally against the bailouts, which in my judgement is the dividing line between popular libertarianism and corporatism cloaked as libertarianism.

            I have had similar debates with liberals on many issues, only to discover the same divides (popular vs. elite liberalism) exists.

  4. kevin de bruxelles

    I admit to not having read many Libertarian works but in order to avoid a straw-man claim, shouldn’t at least one instance of this categorical statement that “the state is the only source of coercive power” be provided? I googled it but only found critics of Libertarians using this statement.

    The examples of corporations exerting coercive force only raise the question of where the state ends and the corporation begins. In other words, in a corporatist milieu is there really any true distinction between a corporation and the state?

    I am about to cook up some pasta a friend just brought to me from Italy. It was grown on fields the Italian government confiscated from Mafia leaders. This brings me to another potential source of non-governmental coercion; criminal organizations. But once again, taking into account all the corruption at high levels, more and more the question could be raised as to where to draw the line between the state and criminal gangs. Even given that though there are certainly low enough level criminal gangs that exert coercive force while remaining outside of government structures.

    At the level of the family, coercion occurs all the time. During the past two hours I just coerced my son into practising his saxophone, doing his homework, pulling a few weeds from the sidewalk, and helping his sister with her piano practise. That is why I would like to see the original Libertarian statement as it seems obvious that coercion occurs outside of state structures, even if the state id defined in the broadest of terms.

    What I do know about Libertarians is that they would agree that the state should use coercive power to enforce existing property relationships.

    But to flip things around a bit maybe an even more interesting question is: do Liberals believe that “the state is the only source of protection against coercive power”?

    1. me

      I haven’t read that exact statement made either but from what I have read it does seem to be implied, mainly by ignoring non-government coercion or sometimes even making up some justification for it.

    2. DownSouth

      kevin de bruxelles asked:

      But to flip things around a bit maybe an even more interesting question is: do Liberals believe that “the state is the only source of protection against coercive power”?

      While the Populists committed themselves to a people’s movement of “the industrial millions” as the instrument of reform, the history of successful socialist accessions to power in the twentieth century has had a common thread—-victory through a red army directed by a central political committee. No socialist citizenry has been able to bring the post-revolutionary army or central party apparatus under democratic control, any more than any non-socialist popular movement has been able to make the corporate state responsive to the mass aspirations for human dignity that mock the pretentions of modern culture. Rather, our numerous progressive societies have created, or are busily creating, overpowering cultural orthodoxies through which the citizenry is persuaded to accept the system as “democratic”—-even as the private lives of millions become more deferential, anxiety-ridden, and (no other phrase will serve) less free.

      [….]

      But while American socialists, for reasons they themselves did not cause, can be seen in retrospect as never having had a chance, they can be severely faulted for the dull dogmatism and political adolescence of their response to this circumstance. Though their primary recruiting problem turned on their lack of domestic cultural credentials—-the working poor wanted justice, but they wanted it as loyal Americans—-socialists reacted to continued cultural isolation by celebrating the purity of their “radicalism.” Thus, individual righteousness and endless sectarian warfare over ideology came to characterize the politics of a creed rigidified in the prose of nineteenth-century prophets. As a body of political ideas, socialism in America—-as in so many other countries—-never developed a capacity for self-generating creativity. It remained in intellectual servitude to sundry “correct” interpretations by sundry theorists—-mostly dead theorists—-even as the unfolding history of the twentieth century raised compelling new questions about the most difficult political problem facing mankind: the centralization of power in highly technological societies. If it requires an army responsive to a central political committee to domesticate the corporate state, socialism has overwhelmingly failed to deal with the question of who, in the name of democratic values, would domesticate the party and the army. In the face of such a central impasse, it requires a rather grand failure of imagination to sustain the traditional socialist faith.
      ▬Lawrence Goodwyn, The Populist Moment

    3. Dirk77

      Good question. I am trying to recall from my Ayn Rand days. I think for her the statement is correct if one substitutes “physical force” for “coercion”, though a quick search does not find the exact quote. A Rand purist would be quick to point out that Rand was not a Libertarian. Close enough for Yves’s arguments though.

      1. Kevin de Bruxelles

        One other way to refute this then is that if it is true that “the state is the only source of coercive power” then it must also be true that “the absence of a state means the absence of coercive power”. To believe this second statement is to believe in the noble savage; that hunter gatherer societies were utopian with no coercion at all. Azar Gat in “War in Human Civilization” destroys the noble savage myth and shows that hunter gatherer societies used coercive power on each other all the time. One look at Somalia today should convince anyone that it is foolish to believe that a lack of government necessarily leads to a lack of coercion.

      2. Andrew

        I’ve read those threads. I’ve had this claim made to me in person and in comments sections. It is not a straw man.

    4. darms

      the state is the only source of protection against coercive power

      Dunno what ‘the Liberals’ believe but I for one believe that government is the only possible ally I have against the megacorporates. Seeing as the megacorpoates are the government these days it looks “we the people” are pretty much on our own these days…

  5. jake chase

    Hayek covered all this in The Road to Serfdom. A society needs laws that apply equally to all. Instead, we have governmental power corrupted by business applying leverage against the poorest and weakest. We have never found an effective means of limiting corruption. Look at any big city machine for the past one hundred years. Look at the federal government for the past sixty (at least). The fantasy of governmental action has given us the national security state, the homeland security state, the law enforcement state, the monopoly capital state. Our political process elects an endless succession of clowns who toady to the ultra rich and pay only lip service to the needs of actual people. Yes, lets give them even more power, because the problem is clearly that individual people have too much freedom. Let’s allow them to dole out money to whoever buys access to their ear, to engineer wars around the globe to protect imaginary national interests, to tax away the earnings of anyone who manages above all odds to acquire a bit of comfort or security. Oh, wait! We’ve already done that. Now what?

    1. F. Beard

      We have never found an effective means of limiting corruption. jake chase

      That’s because our money system is fundamentally corrupt. We have a single government enforced monopoly money supply for both government and private debts. That allows the so-called “credit-worthy” (the “haves”) to loot the “non-credit-worthy” (the “have nots”). As a result, the “have-nots” and sympathetic “haves” attempt to reverse that looting via socialism.

      Usury is destructive to a society which is why it is forbidden between fellow countrymen in Deuteronomy 23:19-20. As a libertarian, I would never ban usury but certainly all government privilege for it should be abolished.

      1. gizzard

        Your singling out of our money system is odd. There are plenty of good things about a single currency as well provided it is properly understood and used to the improvement of everyones lives.

        Our monetary problems lie with following commodity money principles with fiat money. Our political system would be much more responsive to the people if we eliminated private contributions to political campaigns and simply publicly funded all candidates. Provide a PBS type election channel where all candidates can have equal time.

        Its less about how our money system is but more how our people dont understand the possibilities with it.

        1. F. Beard

          Your singling out of our money system is odd. gizzard

          The Fed caused the Great Depression and by extension WW II which killed 50-86 million. Do a a Google of “banking quotes” and you will see that my singling out of the money system is not “odd”.

          There are plenty of good things about a single currency as well provided it is properly understood and used to the improvement of everyones lives. gizzard

          People would be free to choose a single currency if so desired except for their taxes which would require government fiat exclusively.

          Our monetary problems lie with following commodity money principles with fiat money. gizzard

          Partially true, without a doubt. The National Debt, for instance, is completely unnecessary as well as unjust.

          Our political system would be much more responsive to the people if we eliminated private contributions to political campaigns and simply publicly funded all candidates. gizzard

          Since much of the wealth distribution in this country is unjust, it is hard to argue with that.

          Provide a PBS type election channel where all candidates can have equal time. gizzard

          I have no problem with that.

          Its less about how our money system is but more how our people dont understand the possibilities with it. gizzard

          The government could still create, spend and tax its own fiat so it would be free to explore those possibilities and without incurring debt to do so. However, because the private sector would have its own private currencies then government overspending would not harm the tax base that government depends on.

    2. Dean Sayers

      Oh, please. This is precisely what the Locofoco movement argued in 1935-39 – and as it has recently been found, the rhetoric was part of a New York banking astroturf campaign.

      It’s not that individuals have too much freedom. It is that accumulated capital has too much freedom. Crocodile tears for the working class are just a smokescreen: these libertarian policies, when enacted, are always of the narrow scope that benefits the rich and harms the poor.

      People can buy government power because it is a purchasable commodity like anything else. The people that have money always try to lower their taxes – and that is why your beloved capitalist class is the primary purchaser of government power. Clamoring for “equality movements” (parts of the locofoco paradigm were even called this, as well in their time) only occurs when the rate of taxes or adverse effect on the richest class has gone up. Back in the days of the locofoco – bankers were simply trying to eliminate a government-installed bank that offered better interest rates, more well-backed money and posted consistent profits.

      Libertopia won’t provide for efficient capital management because they will use any means at their disposal to acquire power – and it’s a lot easier to use force to accumulate power. This is something your quixotic reverence for property doesn’t account for, since libertarians hilariously assume that the rich and mighty will just “play nice” once they’re on an “equal footing” with the rest of us peasants who rely on investment, jobs and production that they exclusively control.

      1. F. Beard

        … these libertarian policies, when enacted, are always of the narrow scope that benefits the rich and harms the poor. Dean Sayers

        That is very often true. I’ve discovered to my alarm that the libertarian movement is infested with fascists. For instance, many so-called libertarians conflate liberty with a government enforced gold standard!

        1. notexactlyhuman

          Indeed. Here’s a little piece of a little piece I doodled a while back:

          Laissez faire utopians equivocate the only true expression of man’s freedom with the unfettered right of one man to orgiastically exploit and dominate not only one or more of his fellows, but our one and only inhabitable rock in the heretofore known universe.

          Laissez faire libertarian philosophy is fascism with a thin coating of rattle-can chrome paint. It’s an absurd fraud. There are 307,000,000 humans in this country alone and nearly 7,000,000,000 worldwide, the majority of whom have no interest in being perpetually pitted against one another in a competitive Machiavellian spectacle. Without proper government in place to constrain pure greed, a few narcissists would readily cannibalize the many, which is what we’re witnessing today as exemplified by the Koch’s, Lloyd Blankfein, Dick Cheney, Colonel Gaddafi, Mubarak, The Federal Reserve, the IMF and so forth.

    3. DownSouth

      jake chase,

      I’m fresh out of solutions, but clinging to a 500-year-old utopian fantasy whose faults have been manifested ad infinitum and which only serves the interests of the oligarchs hardly constitutes a move in the right direction.

  6. Dean Sayers

    It’s a simple issue, really.

    The rate of control over social mechanisms like the means of production and the means of jurisprudence determines the relative coercive power of any entity. This control is especially compelling when they control “bottlenecks” in these structures. And the only difference between state and private ownership over these means is the interests and processes that determine how they are used.

    Private profit is even attacked by these folks when the state is involved in maintaining those profits. But how is it any better to transfer power over that state function to the private interests that are taking advantage of them already?

    If only we could all be our own entrepreneurs, creating startups everywhere that there are inequality or unfair practices. I can’t count the number of times libertarians have claimed that people should start their own businesses to resolve criticism of capitalist fixtures.

    But the moralism that places fundamental differences on state and private actors is almost cute in its idealism.

  7. Chrsb

    When are economists going to start looking more closely at social libertarianism (anarchism) again? Or does that manufactured bogey man still live in the hearts of our culture?

    Coercion happens because people have the power to coerce. That power comes from Private Property.

    http://infoshop.org/page/AnAnarchistFAQ

  8. Mike

    For the best full understanding of Libertarianism, read “For a New Liberty: The Libertarian Manifesto”, 2nd Edition, by Murray N. Rothbard (1978). It’s an outstanding book. Links to text and audio versions for free or purchase are at http://www.mikesmarket.info/news/For_A_New_Liberty.html

    The founders of the USA were mostly Libertarians, as were the US Constitution and Bill Of Rights. Granted, there were some compromises, like slavery, required as political compromise. However, the intent was clear, to protect the people from the abuses of a strong central government, as described in the Declaration of Independence. If not for the mistake of no definition for three very abused clauses, we would still have a minimal central government with liberty and prosperity beyond imagination.

    Libertarianism and free banking with sound money gave us the industrial revolution with the most rapid increase in prosperity the world has ever known. The USA has been feeding on the capital from that time with increasing socialism ever since. The capital has now been consumed to the point that we now have a crisis which will cause fundamental changes in the economy and governance. Every form of socialism, including the current version in the USA, have been tried and failed. We will soon face the choice between Liberty and prosperity, or some other variation of socialism, which, if delivered by a “strong leader”, could quickly lead to a totalitarian state that is enforced by the might of the US military empire directed more upon itself. Please read “For A New Liberty” and give it some thought.

    Cheers,

    Mike

    1. F. Beard

      Libertarianism and free banking with sound money gave us the industrial revolution with the most rapid increase in prosperity the world has ever known. Mike

      Sorry but a government enforced gold standard, so-called “sound money”, is not libertarian but fascist.

      Liberty is liberty and gold is gold. What does a shiny metal have to do with liberty? Nothing. Of course, one should be free to use gold or anything else for private debts but that is a different story from a government gold standard.

      I like Murray N. Rothbard but he and some other Austrians have a peculiar fixation on gold as money. Both he and Mises were Jewish. A cultural carry-over then?

      1. Dean Sayers

        I don’t think that its a cultural thing. The locofoco movement I mentioned above was a strong proponent of gold as the only “legitimate” money. Anyone whose been paying attention knows that its all based on confidence, though.

        Any “Jewish” cultural link to money is rooted in historical traditions like gelt (seems unlikely) or the restriction of Jewish people from other trades.

        1. F. Beard

          Anyone whose been paying attention knows that its all based on confidence, though. Dean Sayers

          If you think money is only based on confidence then you are mistaken. Government fiat is backed by the taxation power of government since taxes are collected in it.

          But yea, gold is a confidence backed money which is why the smarter gold-bugs like Gary North seek to make it legal tender for government debts.

    2. Chrsb

      Mike, History is written by the winners. The revolution was an economic revolution, not a social revolution. The founding fathers were not interested in freedom. They were protecting their money interests. But if you have faith in the Founder’s you should not be complaining about our current state of affairs. Google the saying “not worth a Continental”.

    3. lambert strether

      Mike burbles:

      “The founders of the USA were mostly Libertarians…”

      Always nice to see present-day agendas projected onto the past.

      Very much like:

      “The founders of the USA were mostly Christians…”

      or the “All great men were” pseudo-thesis in gender studies…

    4. Jack E. Lope

      Is 1978 the year that Libertarianism made a wrong turn?

      Is Rothbard’s book the pivotal element in the hijacking of Libertarian thought?

      Or do I have the impression that Libertarianism fell apart that year because that’s the year I ceased being a teenager?

    5. DownSouth

      So now comes forth Mike, utopian dreamer extraordinaire, invoking Murray Rothbard, historical revisionist extraordinaire.

      Avowed libertarians like Rothbard and Milton Friedman don’t sweat the small stuff, like history, because they know that history can be rewritten. They’re probably bigger believers in “truth and historical concreteness” than what Stalin was.

      The utopian fiction takes form in statements like “The founders of the USA were mostly Libertarians”; “If not for the mistake of no definition for three very abused clauses, we would still have a minimal central government with liberty and prosperity beyond imagination”; and “Libertarianism and free banking with sound money gave us the industrial revolution with the most rapid increase in prosperity the world has ever known.”

      From Victor Arwas’ essay “The Great Russian Utopia” we find the passage:

      Stalin created some more “truth and historical concreteness” by commissioning and overseeing a new history of the Revolution in which he was Lenin’s sole companion and heir. All photographs were doctored in order to remove any images of Trotsky or the other purged old Bolsheviks: one curious image retained nothing of Trotsky but an elbow.

      The libertarian version of that would read as follows:

      Rothbard created some more “truth and historical concreteness” by writing a new history of the Revolution in which Jefferson was the only Founding Father. All photographs were doctored in order to remove any images of Washington, Adams or the other purged old Founding Fathers: one curious image retained nothing of Washington but an elbow.

  9. Jack Straw

    The weakness of libertarian theory is that it does presuppose a police state … but they never talk about it. OK, maybe the Rothbardians believe everything can be private, but few really follow that.

    The police state that a libertarian order requires is essentially the same as the Platonic Guardian class, yet there is never serious emphasis on what public virtue would have to be inculcated into that class to keep them in line.

    Relating this the Powell Memo – I was 8 when it came out – I have to believe the USCOC did think it was the end of their world if the industrial blue chips in particular were either prevented from, or fairly charged for producing negative environmental externalities, for example.

    Many libertarians believe that the tort system (specifically, nuisance law) should be govern negative externalities, but only so long as it’s not in the hands of the Naderites.

    All that said, it’s much easier to make society less “free,” and I really do appreciate the skill needed to make it more free, but it rarely comes about without great cost or ugly conflict.

  10. Rycoka

    I read Capitalism: The Unknown Ideal, and Wealth of Nations recently and found in both of them a fundamental support for individual freedom as the basis for a prosperous society – perhaps the core of libertarian thought. Obviously Rand, a product of the Soviet Union was rather more rabidly opposed to government intervention in life than the mildly eccentric Adam Smith – a product of a time when government was far less intrusive in daily life.
    I guess the issue of government vs private enterprise is a continuum and different societies will place themselves at different point in the continuum. Arguably freer societies are both more creative and more dangerous. That I guess is why I admire the US as an engine of innovation and progress, but love living in the more cautious Australia.
    BTW, on the rich getting richer theme, the “soound money” dudes have a theory that sounds spot on. As the Government /Fed / Banks inflate the supply of money and money like instruments, the elites, who get first access to this additional money actually benefit, while wage earners and unemployed actually go backwards as their wages and small savings are eroded with the value of the currency. Bernanke has to be well aware of this and I wonder if he just denies it or has put in place some cognitive dissonance (the stability of the system is more important than the upward redistributive effects of Fed policy). The “strong dollar” statements perhaps indicate a level of disingenuousness (we know what we are doing but are going to lie to everyone).
    Finally, I have to put my opinion (which is worth nothing) with Mish Shedlock who views Mr Paul as a good influence but non-contender for the Presidency. Mr Paul just doesn’t seem to be sound on science and this would have to be a very dangerous thing for a US President.

    1. Dean Sayers

      What’s lost these days is that leftists also found their ideologies on individual liberty and freedom. If you read anything by Karl Marx or Erich Fromm you will see that it is a fundamental theme of their work.

      The propertarians have hijacked the popular narrative, however.

      1. Rycoka

        Dean,
        I actually did start to read the communist manifesto. Having just come off Smith though I found the writing so intellectually lacking that I quickly gave up. That being said I think that the communist view of the worker as the fundamental productive unit has some merit – just that I think this misses the contribution of the land owner and the merchant capitalist. Again I think it is a matter of position on a continuum. I can defitintely see times when the oppression of workers, unprotected by government, would be such that a revolution of some sort would seem the only solution.

        1. Dean Sayers

          The communist manifesto is not an argumentative piece like the works of Smith. Read Capital if you want something very comprehensive, but Wage-Labor and Capital is very good for a quick introduction to some Marxist concepts.

          Reading the Communist Manifesto was disappointing for me, too. But I recently read a manifesto of a minor movement from 1835 and it had absolutely no intellectual depth, either. The same is true for any dem/repub manifestos. You just can’t look there for honest scientific inquiry, because that’s not the point. They are ideological works which presuppose a paradigm.

          Marx sought to explain the structure of capitalist society in such a way that it would also explain why the society is corrupt. If you want a succinct, comprehensive morality argument for the same mindset, I suggest Erich Fromm: Man for Himself. I was strongly influenced by Fromm, and because of the paradigm he presents (which is common to a lot of other, “old school” communists), it confused me as to how leftists were so disassociated from the “individualist” and “libertarian” labels.

          Indeed, there could be nothing more liberating, more individually valuable, than the acquisition of control over one’s own labor by those who work for things. And, as has been documented extensively, lords of all stripes – be they land-owners, state-managers, corporate officers, all are in positions to overthrow that power and take it for themselves, to be exploited to their own ends.

          The usage of land does matter, though. If people could really extract value from land purely as individuals, then land-ownership might matter. But the alternate is the case – a minority own critical functions of land-value-extraction, everywhere from the sheer ownership, to the taxation, to the rent or exclusive control over means of production which can allow that extraction of value.

          The land-owner is not the objective value in political economy; the wage-laborer, efficiency and sustainability of land-use are the important values.

    2. Yves Smith Post author

      As an aside, Adam Smith has been cherry picked big time. “Invisible hand” was almost certainly not a term of approval. Smith was a popular amateur Shakespearean actor in his spare time, and the most important use of “invisible hand” is in Macbeth, and more generally in his day it was seen as a charlatan’s sleight of hand. So if you take contemporary usage, Smith was saying his “invisible hand” worked but looked like a conjurer’s trick. This is not a ringing endorsement.

      Similarly, he inveighed against the abuses of English mercantilists in the colonies, of collusion by employers to suppress wages, and favored public education. But contemporary presentations of Smith omit all of this.

      1. Andrew

        That’s fascinating background on Smith. My first Shakespearean association for “hand” fits in with your others. It is Hamlet addressing the actors that he has commissioned to perform the play, wherein he’ll “catch the conscience of the king”. He instructs the actors to “not saw the air too much with your hand, thus, but use all gently. For in the very torrent, tempest, and as I may say, whirlwind of passion, you must acquire and beget a temperance that may give it smoothness.”

        Fits your theory, I’d say.

      2. Rycoka

        Yves,
        My reading of the “invisible hand” was that Adam Smith genuinely did belive that people working in their own self interest actually did contribute to human development. Smith’s best comment (he had a rather dry sense of humour) was that he had far more trust in merchants who said they were working in their own interests than those who said they were working for the “good of society” (doing God’s work?). I personally find that a compelling statement. Mind you Smith was very scathing of the intersection of mercantile interests and government, stating very clearly that he bevlieved that generally when merchants got hold of the government they generally used this power to serve their own interests at the expense of society as a whole. Smith’s “good guys” were the land owners, who had a vested interest in the development of the land and therefore a vested interest in the wealth of the nation. Smith also was very critical of corporate structures where the owners of capital did not run the company – suggesting that they ended up being run for the benefit of the company executives rather than owners. Smith also described a situation in the 18th century where an overextension of bank money resulted in a run on the banks. The response at the time was to set up a bank that took on the impaired instruments. Smith reported that it took about two years for this bank to go bad and the whole system to collapse. My wry thought was that things haven’t changed that much.

        1. DownSouth

          Rycoka said:

          My reading of the “invisible hand” was that Adam Smith genuinely did belive that people working in their own self interest actually did contribute to human development. Smith’s best comment (he had a rather dry sense of humour) was that he had far more trust in merchants who said they were working in their own interests than those who said they were working for the “good of society” (doing God’s work?). I personally find that a compelling statement.

          Here’s David Sloan Wilson’s rebuttal to your assertion from Evolution for Everyone:

          Watch out for the invisible hand. In ‘The Theory of Moral Sentiments’ (1759) Adam Smith famously claimed that individuals who care only about their own narrow interests are led by “an invisible hand” to benefit society. Bernard Mandeville expressed the same idea in his ‘Fable of the Bees’ (1705), which humorously portrays human society as a teaming beehive whose members act only for personal gain.

          [….]

          This particular passage [of Smith’s] does not fully represent Smith’s views about morality, since he disagrees with Mandeville and emphasizes more other-oriented instincts elsewhere in his book. In any case, the modern interpretation of both metaphors is that people are innately self-interested, that the concept of self-interest can be reduced to something like the utility maximization of economic theory, and that self-interest robustly leads to well-functioning societies. This interpretation is deeply flawed on the basis of elementary evolutionary principles that are very unlikely to be wrong. I have written article for the experts about this titled The New Fable of the Bees which is available from my Web site, but the gist of my argument can be easily understood on the basis of this book. There are billions of ways for human society to be self-organized. Of these, only a tiny fraction are adaptive in any sense. Of these, only a fraction are adaptive at the group level…. There is no way to reduce all this complexity to a simple minimalistic formula such as self-interest or utility maximization.

  11. F. Beard

    Doesn’t sound like you’re much of a firebrand libertarian, maybe a “Save the Whales New Age Foo Foo” Libertarian, a Libertarian with a lower-case “L”, a libertarian, but not quite as soft and helpful as a librarian. craazyman

    No. I am a true libertarian but I realize that government shall not and should not shrink overnight to its proper size and jurisdiction. The money monopoly has driven the expansion of the government and the abolition of that monopoly should rapidly shrink it.

  12. Eric

    Missed in the discussion is the role of the cultural sphere in social life. I believe that the Libertarian ideal of a minimum of government-enforced equal rights can only result in a coercive cultural cabal that functions much like a theocracy, with or without the religious dogma.

    This all assumes, of course, that society can learn to hold the economic sphere’s relentless push towards fascism at bay.

    1. F. Beard

      This all assumes, of course, that society can learn to hold the economic sphere’s relentless push towards fascism at bay. Eric

      That’s where a true libertarian can help. The fascists will generally not admit that they are fascists. Instead they will claim to be “libertarian” or for “free markets”, etc. And often, liberals and progressives will be fooled since they buy into quite a bit of fascism themselves unknowingly (Does a fish know an other fish is wet? :) )

  13. Paul in TO

    Whether one is a libertarian or not, this post is laughable in terms of shredding anything. The attempt to exert power over others is thousands of years old and it is simply undeniable that government is the main instrument of coersion. A thousand years from now people will still struggle with this — and they won’t even know what General Motors was — and a few very modern labor disputes won’t even amount to dust in the wind.

    Plato took this on 2,400 years ago and it resonates everywhere to this day. The fact that US Democrats and Republicans hate each other so much that everything comes down to a partisan dispute means nothing in terms of this debate.

    All I can say is that if you think government can be kept under wraps then you’re ignoring everything power-mad humans have aspired to over thousands of years and if you think government is your friend and will “help” you in any meaningful way, then you’re a fool.

    1. F. Beard

      All I can say is that if you think government can be kept under wraps then you’re ignoring everything power-mad humans have aspired to over thousands of years and if you think government is your friend and will “help” you in any meaningful way, then you’re a fool. Paul in TO

      It sure helps the bankers but it mustn’t help their victims?

      I know! Now that the bankers have stolen the country via their government enforced usury and counterfeiting cartel, let’s abolish government except to protect their newly stolen property and wealth.

      Sound fair to you?

      1. Paul in TO

        Bankers deserve every bit of criticism you can deliver and there’s nothing about that which has anything to do with my point.

        Still, it’s worth noting that the US has debt of $14.5 trillion and unfunded liabilities of somewhere north of $55 trillion. There is a deficit of nearly $1.7 trillion this year and no credible plan to bring that down (and $420 billion of that is interest on debt in the lowest interest rate environment in history).

        What did the banking crisis cost? A huge number for certain and some of the architects of that should be facing jail (including the politicians who demanded that banks and GSEs lend to the poor) but can anyone get to a number that causes those set out above? The numbers just aren’t big enough to be the real problem. What the financial crisis did was act as a trigger to bring forward a problem that was continually being kicked down the road and, more importantly, it exposed the unsustainability of the government model in most countries in the West.

        We have not been that productive for at least a generation. To compensate for that and to maintain our standard of living, we borrowed in order to fill the gap. Governments and people alike. To maintain a fiction we weren’t willing to face.

        But it couldn’t last and so we look for a scapegoat to blame for our profligacy. Whether it’s bankers or government is not important. If you live in a house your income couldn’t justify then that should probably suffice.

        1. F. Beard

          We have not been that productive for at least a generation. Paul in TO

          Not true. There have been major productivity increases but the real economy cannot possibly keep up with the debt since the debt compounds at a rate that is greater than the real economy since the usury cartel demands real profits not just nominal ones.

          To compensate for that and to maintain our standard of living, we borrowed in order to fill the gap. Paul in TO

          The population had no real choice but to borrow. It was either borrow from the counterfeiting cartel one’s self or be priced out of the market by those who did. Or should people be content with negative real interest on their savings? Plus, our money supply is debt – no more borrowing = an economy attempting to run backwards – an ugly sight.

          But it couldn’t last and so we look for a scapegoat to blame for our profligacy. Paul in TO

          Here it comes – blame the victims.

          Whether it’s bankers or government is not important. Paul in TO

          Oh no. A government backed and enforced counterfeiting cartel could not possibly be at fault.

          If you live in a house your income couldn’t justify then that should probably suffice. Paul in TO

          1) Then the banks should have never made those loans.
          2) During the boom, when folks had jobs, many could afford those homes.

          1. Paul in TO

            This is very soothing to hear. When I picked up that flyer and went to the bank and asked the young lady for a loan, I was the victim! Fantastic. It was that horrible young lady and her credit department. How dare they give me a loan and not look out for my best interests. I’m the victim here and you can’t blame me.

            I rest my case. This represents the modern world better than I ever could. The problem in the US is that people spend all their time figuring out why they’re not responsible for their own actions and how they can qualify for victim status.

            Well, you know what? The world is starting to view things the same way as you do. They’re the lenders and they have to take the blame for the poor borrowing victim. Money will not flow to the US for much longer and then you’ll need to pay your way or default — blaming the lenders the whole way. Bad bankers; bad foreign governments.

    2. notexactlyhuman

      If US citizens were to abolish the US government today, Koch Industries and/or Peabody and/or some other gigantic corporation(s) would rise and assume the role within days. Government is a label. Stop fooling yourself.

    3. DownSouth

      Paul in TO said: “The attempt to exert power over others is thousands of years old and it is simply undeniable that government is the main instrument of coersion. A thousand years from now people will still struggle with this…”

      I hear these defeatist laments, and not infrequently, emanating from both the right and the left sides of the aisle. For instance, someone yesterday linked to this article by Chris Hedges where he variously writes:

      • When did our democracy die?… When did the dead hand of the corporate state become unassailable?

      • Empires die over such long stretches of time that the exact moment when terminal decline becomes irreversible is probably impossible to document. That we are at the end, however, is beyond dispute.

      • Human history, rather than a chronicle of freedom and democracy, is characterized by ruthless domination. Our elites have done what all elites do.

      • The game is over. We lost. The corporate state will continue its inexorable advance until two-thirds of the nation is locked into a desperate, permanent underclass.

      Just let me start by saying that you would never hear Gandhi, Martin Luther King or Marx fall into these bouts of negative nihilism. Gandhi and MLK fended off the negativity with their abiding religious faith, and Marx with his upbeat historical determinism.

      But beyond faith in religious or secular ideology, does science (factual reality) offer any hope?

      I believe that it does. To begin with, as the evolutionary biologist David Sloan Wilson observes: “Confront a human group with a novel problem, even one that never existed in the so-called ancestral environment, and its members may well come up with a workable solution.”

      But beyond that, are your and Hedges’ claims of doom and gloom based on any empirical evidence? I believe there is very little evidence to justify your dispirited outlooks.

      To begin with, Hominids lived as hunter-gatherers for the vast majority of their evolutionary history, which has lasted over two million years. This is the environment in which our biological hardware evolved, and our cultural software to a significant extent. Agriculture originated only about 10,000 years ago and has been practiced by the majority of the world’s population for only two or three millennia. Large-scale, hierarchical societies have existed for only a few thousand years. For all but the last few moments of his long history, mankind lived in small, highly cooperative groups that, as Wilson put it, “turned egalitarianism into an art form.”

      Human society is not the equivalent of wolf or ape society which is based strongly, or entirely, on dominance. Quite the contrary, “What Boehm and others have shown is that egalitarianism is not a cultural invention that began in ancient Greece, as many have supposed, but is part of our genetic endowment that asserts itself whenever appropriate conditions are met.”

      In fact, it is man’s ability to cooperate which allowed him to organize into groups composed of many millions of individuals. As Wilson goes on to explain:

      Despotic chimp society seems like the polar opposite of egalitarian small-scale human society, yet all that separates them is a shift in the balance of power. Without mutual control [the group organizing itself to control the behavior of what would otherwise be dominant males], hunter-gatherer society would veer in the direction of chimp society. If we could somehow enable chimp subordinates to defend themselves more effectively, their society would veer in the direction of egalitarianism. If something happened to a chimplike species approximately six million years ago to shift the balance of power in the direction of equality, it would have radically altered the course of its subsequent evolution, compared to other chimplike species, like water cascading down different sides of the Continental Divide.

      [….]

      In the last chapter I compared the divergence of our own species from other ape species to water cascading down different sides of the Continental Divide. In our case it was the cooperation divide: as soon as egalitarianism became sufficiently established, genetic evolution started to reshape our minds and bodies to function as team players rather than competing against members of our own groups.

      [….]

      Modern life is a far cry from small-scale society and sometimes becomes as hierarchical and competitive as a chimp troop or a wolf pack. What happens when we cross the cooperation divide the other way? Do we stop talking and pointing things out to each other? Do we avoid eye contact?

    4. Yves Smith Post author

      I suggest you read Heilbroner, then we might have an intelligence conversation. Your ignorance is showing.

      He makes clear how many of the former coercive practices of pre-capitalist societies (as in undertaken by, say the feudal lord) are now subsumed in more user-friendly-looking but no less coercive guises in capitalism. We’ve been trained not to see them that way, he discusses how our value system obscures the fist within the capitalist glove. He discusses how in some older societies the words for what we consider to be “work” and “play” are the same.

      1. Patriot

        Yves,
        I just looked at Heilbroner’s Wikipedia entry and he appears to have an extensive body of work. Where would you suggest one start?

        Thanks

  14. jake chase

    The truth is that our legal system has been hijacked by ideological reaction. All one has to do is examine the absurd credentials of today’s judges. We lost control of government in the Thirties, and we lost control of law in the Eighties and Nineties. What comes next is the United States of Argentina, without the powerful unions.

    Once the toothpaste is out of the tube…

  15. Dan Duncan

    OK Yves, you win. As a result of your “shredding”, it is established that the state is not the only source of coercive power.

    [Interesting, isn’t it, that you didn’t include any mention of unions? I guess that your selective perception yields to selective shredding. What a joke.]

    And it is resolved: Not only are governments a source of coercive power, but corporations and unions are also wellsprings of the same…

    So what?

    Your point–if there is one–seems to be that corporations use coercive power all the time, so Libertarians should STFU about the governmental use of coercive power.

    And since Libertarians refuse to STFU about coercive power, Libertarians do a “great disservice” to the “ongoing debate” about the relationship b/w state and private sector over production and distribution.

    Which, of course, is all bullshit.

    The heart of Libertarianism is the very debate of which you claim Libertarians do this “great disservice”. If Libertarians “get out of the way, and stop this great disservice” to the debate, then there would be no debate.

    And your pointless point would be settled: “The state shall be the sole arbiter of production and distribution. The End.”

    If you are going to write about this issue, then you have to first ask: What is “coercive power” and when is its use (if ever) justified? Otherwise, as is usually the case, the two sides will just end up talking past one another.

    Additionally, your post might be a bit more damaging to the Libertarian side if you had mentioned the recent Google/Apple revelations of blatantly tracking and monitoring its users without the users knowledge or consent. Talk about the unjustified use of power in violation of The Individual!

    If Libertarians want government “out of the picture” then how do they propose reigning in Goog/Appl? By refusing to buy their products? Isn’t it almost too late for that? Kind of like a business in the the ’90s that would refuse to buy Microsoft products. Possible, but damned impractical and expensive; so much so that it’s almost impossible to have had a small business in the ’90s without Windows or Office.

    I agree, this is an important debate. I also agree that too many Libertarians refuse to engage in it and do it a great disservice. But Yves’ post is just as undermining, if not more so…because while she claims that this debate is important, she wants to have it just so long as the other side just shuts the f*ck up.

    And now…I will shut the f*ck up.

    1. lambert strether

      Please quote the portion of the post where Yves tells you to STFU. Otherwise, you’re simply projecting. (And, at least to my ears, whining. And have at it, before you tell me I’m telling you to STFU…)

    2. Tao Jonesing

      Libertarians should by no means STFU. The rest of us need you guys to self-identify so we can choose to ignore you.

      When so-called libertarians start seeking abolition of the corporation, I’ll start listening to them again. Modern libertarianism has been co-opted by neoliberal double truth doctrine that hides a collective behind each state-sponsored corporate individual and pretends that the unnatural creature has natural law rights. There appear to be some classical libertarians out there, but the vast majority of modern libertarians are nothing more than the dupes of Hayek, Friedmna, Mises and Rothbard, the architects of neoliberalism.

      1. F. Beard

        When so-called libertarians start seeking abolition of the corporation, I’ll start listening to them again. Tao Jonesing

        Sorry Tao but since common stock is the ideal money form, I don’t see how I could do that.

        The problem isn’t corporations; it is the banks.

        1. readerOfTeaLeaves

          Last I checked, banks are incorporations.

          Some corporations are banks, and all banks are also corporations.
          But not all corporations are banks.

          1. F. Beard

            But not all corporations are banks. readerOfTeaLeaves

            Yes. FR banks are evil whether incorporated or not.

            But the ordinary common stock company is a wonderful human invention since it “shares” wealth rather than loots it. It is also democratic since shareholders can vote.

  16. SqueekyFromm

    From what I have read, Libertarianism is a faith based belief system just like any religion. But it is just clothed in language of “reason” which covers that fact up for its believers.

    And, just like the Religious Fundamentalists who get stuck trying to explain Noah and the Ark, as literally true, the Libertarians get stuck trying to explain why their theories don’t quite seem to work in the real world.

    They need to face facts. Business regulation has been around since the Code of Hammurabi. Why?? Because they had to be, or there would not have been civilization.

    Here is a great link to “What’s Wrong With Libertarianism”:

    http://www.zompist.com/libertos.html

    Squeeky Fromm
    Girl Reporter

  17. Paul Tioxon

    The Libertarians are anarchists by another name. If the state has a monopoly on violence and other coercion, why did capitalism co evolve with the geopolitical state system in Europe for hundreds of years lending money to kings, Napoleon as well as the American colonial rebellion, without which these states could not exist. The historical fact is that business was strengthened by the expanding market for war materials and interest profits by the developing European powers. While the nation state and growing commercial trading system are not co extensive, it is amazing how well and how rich the capitalist system manages to survive and grow, even in Hitler’s Empire, even through the Soviet execution of capitalism on their territories. Stalin may have had more divisions, but it is Goldman and Morgan with offices in Moscow skyscrapers today.

    1. attempter

      The Libertarians are anarchists by another name.

      What kind of ignorant garbage is that. And the entire rest of the comment is a non sequitur from it.

      The term libertarian was originally synonymous with anarchism, in the 19th century. In the 20th it was hijacked by nihilistic propertarian fascists, the radical opposite of anarchists.

      Get it straight (others in this thread are making the same error) – anarchists and libertarians agree only on abolishing the State.

      But libertarians worship the coercion of capitalism, corporations, and property, while anarchists, being principled and consistent about freedom and democracy, want to abolish these as well.

  18. Brian

    Do any theories work in the real world? Thats a standard I doubt many want to hold up as the bar.

  19. Andrew

    This thread is a lovely proof of how right Yves is that arguing with libertarians is like talking to a wall.

    The *name* of the post is “Private Parties Have Coercive Power Too.” Her very first statement is that the point of the post is that she is “sick of the free pass given the libertarian blather, ‘The state is the only source of coercive power.'”

    But that doesn’t stop Duncan from missing it: “Your point–if there is one–seems to be that corporations use coercive power all the time, so Libertarians should STFU about the governmental use of coercive power.”

  20. SqueekyFromm

    Oh, I just got inspired to write this:

    The Libertarian National Anthem
    by Squeeky Fromm

    (To the tune of “Do Re Mi” from the sound of Music)

    Me . . .The Center of the World.
    Me . . .I’ll never have enough.
    Me . . .The One, it’s all about.
    Me . . .Keep your hands off my stuff!

    Me . . . Don’t try to take my Dough!
    Me . . . Will never be a “We.”
    Me . . . It’s MINE, ALL MINE!!! and so,
    Everything comes down to Me, Me, Me, Me.

    Chorus: To the same tune:

    Me. . .Me Me . . . Me Me Me Me.
    Me. . .Me Me Me Me Me Meeee!!!!
    Me. . .Me Me . . . Me Me Me Me.
    Me. . .Me Me Me Me Me Meeee!!!!

    Me. . .Me Me Me Me Me Meeee!
    Me. . .Me Me Me Me Me Meeee!
    Me. . .Me Me Me Me Me Meeee!
    Me Me Me Me . . Me Me . . Me Me Me Me. . .

    Squeeky Fromm
    Girl Reporter

    Note: Also see: Woody Guthrie’s “Do Re Mi”

    http://www.youtube.com/watch?v=46mO7jx3JEw

  21. me

    I look at libertarianism much like I look at communism. Both are attractive ideologies and I am glad that they exist but they both make the mistake of ignoring power asymmetry.

    And in the cases where the ones who don’t assume that there is a power asymmetry, they then make the mistake of assuming that the people with more power than the average will always to the right thing and not exploit that power that they and that is also another area where they both fail.

    1. Dirk77

      They both are based upon an imperfect understanding of human nature. To give Ayn Rand credit, she always thought Aristotle stood above all other philosophers for pointing out the necessity of grounding your moral philosophy for humans with an understanding of humans themselves. That said, I’m wondering if Freud and others are right and that human nature consists of a lot of competing elements. That doesn’t invalidate Aristotle’s view; it just makes it a lot harder.

  22. Tom Blanton

    Earth To Progressives:

    Who are all these evil libertarians that everyone here is talking about? I’ve heard some progressives claim that Dick Cheney is a libertarian. He isn’t. Ron Paul, who I consider to be a libertarian leaning conservative, was against bailouts, yet Obama was all for them.

    Charles Davis recently compared Ron Paul with Obama, as a progressive here:
    http://www.counterpunch.com/davis04282011.html

    I consider myself to be a libertarian anarchist and I certainly recognize the corporate/government axis of fascism and coercion. I recognize also that it is government that has a legal monopoly on violence. I think virtually everyone recognizes that politicians are owned by corporations and the elite.

    The progressive notion that government protects people and acts as a force for good is ludicrous. The notion that libertarians are crypto-fascists that support a corporate controlled state is equally ludicrous. Again, who are these libertarians?

    The idea that commodity based money is some sort of fascist construct is bizarre in times when inflation due to the debasement of fiat currency has devastated the middle class and created more poverty. The progressive idea that corporations should pay more taxes when it is no secret that these taxes will be passed on to consumers is also bizarre. Higher prices hurt the poor and elderly more than anyone else.

    Outside of people like Chris Hedges, Glenn Greenwald, and Chris Floyd, the silence of progressives is deafening regarding targeted assassinations, covert and overt wars, the surveillance state, corporate welfare, the militarization of society, mandated insurance, the highest incarceration rate in the world, the drug war, and an endless list of other government crimes against society.

    Before making baseless accusations against unnamed libertarians, the so-called progressives should get their own house in order and take a close look at the politicians they support.

    Here’s a tip on how to spot real libertarians. First they don’t bankroll Republicans (like the Koch brothers), they don’t always support the CATO Institute and the Reason Foundation (organizations bankrolled by the Koch brothers), they aren’t leaders in the tea party movement (like Dick Armey), the don’t dominate talk radio (like Glenn Beck), and they aren’t Objectivists or members of the GOP.

    If you want a better idea of what real libertarians are all about, check the Future of Freedom Foundation or the Center for a Stateless Society, or even the Mises Institute (hardcore Rothbardians).

    Progressives would also do well to understand the difference between pro-individual free markets and pro-business capitalism. Sound money is another thing progressives need to examine as opposed to the fiat money that the banksters prefer.

    Now, all that being said, perhaps some progressives can explain why they fear monopolies in the market (which are generally propped up by government), but embrace government which is a monopoly on nearly every facet of life.

    1. F. Beard

      The idea that commodity based money is some sort of fascist construct is bizarre in times when inflation due to the debasement of fiat currency has devastated the middle class and created more poverty. Tom Blanton

      What is bizarre is to conflate liberty with someone’s favorite shiny metal.

      The problem with government fiat is NOT that it is fiat (it must be fiat for solid libertarian reasons) but that we are all forced to use it for PRIVATE DEBTS.

      Like I said, the libertarian movement has been infiltrated by fascist gold-bugs.

      1. Christian

        You totally miss the point. The fact is that gold has been chosen as the reserved currency of the world for thousands of years (the reason is less important and the fact gold is chosen is even less revelant). On the other hand, as you have already said, fiat money is government’s favorite shiny paper because they can control the supply of money.

        Read Alan Greespan’s early article “Gold and Economic Freedom”
        http://www.constitution.org/mon/greenspan_gold.htm
        and you will understand the difference between what they preach and what they believe.

        1. F. Beard

          On the other hand, as you have already said, fiat money is government’s favorite shiny paper because they can control the supply of money. Christian

          The government could print till its presses fell apart and it would make no difference to the private sector if it had genuine private money alternatives for private debts. In fact, the private sector might rejoice since certain taxes, in real terms, would go to zero as the price of the government’s fiat fell to zero.

          Gold is not only a fascist solution to the stealth inflation tax; it is also a silly, primitive and thoroughly unnecessary one.

          As for Greenspan, why should anyone listen to that old fraud? In fact, he may have planned the current mess just to bring in his beloved and fascist gold standard.

    2. Yves Smith Post author

      Tom,

      Are you serious?

      The public in most “democracies” (I’ll concede the US has become a plutocraty in the last 10 years, but the flip side is the railroads in the late 1900s had more control over government than the banks do now, and that as eventually broken) has some say in what happens in government. That isn’t the case with private monopolies.

  23. Larken Rose

    How is it that this author is “sick” of hearing libertarians always saying that the state is the only source of coercive power, and yet, having been around libertarians for many years, I have NEVER heard any of them say that? The foundation of libertarianism is the non-aggression principle. Since the vast majority of coercion is committed in the name of “government” and “law,” that is what libertarians often speak about. They don’t approve of what a car-jacker does, simply because he is a “private” thug. They just realize that the theft and assault done by the state completely dwarfs “private” crime.

    And even a lot of “private” crime is the direct or indirect result of “government” coercion. The “war on drugs” is a fine example. And fascism is the alliance of corporate control freaks and “government” control freaks. If a corporation is actually using overt violence against innocent people, it is almost always with the HELP of “the law,” or at least with “the law” intentionally turning a blind eye.

    The idea that reducing or eliminating “government’s” supposed RIGHT to initiate violence is going to INCREASE violence, because “private” crooks will appear to fill the void, is ridiculous. When is the last time private theft, private assault, private kidnapping, or private murder, have come anywhere near the “legal” versions of those crimes? This is state-worshiping fear-mongering at its best: “If you don’t let ‘government’ forcibly control you, someone else will!” Here’s a thought: how about letting NO ONE forcibly control you? Oh wait, there’s a word for that–and it scares the bejesus out of statists. That word is “anarchy.” (The less scary term for it is “voluntaryism.”)

    (P.S. Statists love to whine that libertarians are so greedy and selfish. However, they’re also the only ones willing to leave YOU alone, instead of whining for “government” to coercively rob and control you. Yes, self-ownership benefits the individual–EVERY individual, except those who want to rob and dominate others. The other side of “I own me” is “You own you”–and that latter point might be what scares statists even more: the prospect of having to be completely responsible for their own actions and decisions.)

    1. Yves Smith Post author

      As I said earlier, read Ch. 5 of ECONNED for a discussion, you can see this argument regularly in comments here (at least twice in the last week). This is not a straw man despite your assertion to the contrary. You see other people in this thread, both libertarians and not, reporting sightings. The fact that you’ve managed not to take notice it does not mean it is not asserted on a regular basis.

      See here for longer form discussion:

      http://www.nakedcapitalism.com/2011/05/earth-to-libertarians-private-parties-have-coercive-power-too.html#comment-382404

      And your rant about “statists” (who are they? they seem to be a libertarian fantasy) IS a straw man.

  24. Tony Butka

    Now I’m going to have to dig out my old Max Weber. Since corporations only exist as entities created by the State, aren’t all of these line in the sand distinctions a little hyperbolic?

    1. Yves Smith Post author

      Yes, the Heilbroner quote got at that, but Weber might be even more direct on this topic.

  25. John Hall

    Generally if you want to criticize a position, it is better to quote someone saying it rather than straw manning them.

    I doubt any libertarian in academia would make the argument that the “The state is the only source of coercive power.” Randians and libertarians do occasionally say that the state has a monopoly on violence. However, I would say that those two statements are quite different.

      1. John Hall

        Let me rephrase, only an ignorant libertarian would make the argument that the state is the only source of coercive power. It is a ludicrous argument. Nozick wrote about how hard it is to define coercion and there is no reason that a libertarian legal system needs to be built upon this concept. In any case, even in a private libertarian society, it is possible for someone to use coercion. The question is when the coercion justified and when would a court view the violations as justified or not justified.

        I will concede that many libertarians make a different argument. Violations of justly acquired property are wrong. The state violates property rights and those actions are wrong. These are largely ethical arguments that ignore any cost/benefit calculation. Many libertarians who believe this, also believe that courts and private property rights can be defended in the absence of a government through private security agencies and private courts. This is a very controversial position that not every libertarian believes, but I can see why you would criticize it. Few people find this argument appealing.

        Another line of libertarian thought is that violations of property rights by the state are only justified in so far as they would have prevented (or reduced the incentives) for other property right violations. This would be a justification for a minimal state that taxes to provide for national defense, courts, and protection of property rights.

  26. cs

    Yves, you’re paraphrasing libertarians and missing a key portion of the phrase – **in a free society enforcing the Rule of Law, which is exemplified by private property rights and contracts,** “the state is the only source of coercive power.”

    Without the Rule of Law, it is the Rule of Men – anarchy, corporatism, amongst many other forms. What you’re recognizing is the failure of the rule of law and hence the lack of a free society. This is something Ron Paul and many other libertarians repeat often, explaining it as a key foundation to solving the problems in our societies. In fact, I remember Glenn Greenwald a few weeks back wrote a piece about the two-tier legal system in the US.

    In a society where the Rule of Law is followed, the State is the legal monopoly on force. All your examples fail since the Rule of Law isn’t present.

      1. cs

        You’re thinking anarchism, which is quite similar in nature to the corporatism we have now.

        We need exactly the opposite.

        The libertarian solution is to remove rules, reinstate law and order, and return society to the Rule of Law.

        1. ScottS

          You know, I support civil liberties 100%. Even if someone were spewing hate speech at me, I would defend their right to say it. I support anything that goes on between two consenting adults in the privacy of their own bedroom (living room, kitchen, etc).

          But the idea that businesses are overly constrained is bonkers. Rules are how grown-ups get things done amicably.

          We aren’t better off with a private police force, a private fire department, a private “public” works department, or any of the Libertarian panaceas we are constantly subjected to. Private contracting and weak regulation will be the death of us all.

          The Army Core of Engineers is nothing more than a rubber-stamp factory, allowing disasters like Katrina to happen. The Minerals Management Service is literally in bed with the oil industry, and rubber stamping BP’s disastrous “safety” plans. And financial regulation, or the complete absence thereof.

          How can we possibly be better off with lax regulation? Honestly, what does it take to prove Libertarians wrong?

        2. attempter

          You’re thinking anarchism, which is quite similar in nature to the corporatism we have now.

          I think we have a winner for the single dumbest thing ever said here.

          C’mon, lackeys, if you want to slander anarchism, surely you can do better than this clown!

          1. cs

            I see such concepts are difficult for you to grasp. Here’s a simplified version:

            Rule of Men = Anarchism & Corporatism

            Rule of Law = Free Society

          2. deborama

            attempter, I was thinking the same thing! anarchy = corporatism has got to be the single dumbest thing I’ve read lately, and I read all day long…

    1. Yves Smith Post author

      “Free society” is an oxymoron. Societies have rules.

      Every social animal society where the member can operate independently (meaning you exclude ants and naked mole rats) have cheaters. That means you also need mechanisms to punish cheaters. Every social animal society with independent actors has members regularly engage in altruistic punishment, when they punish cheaters even though the action is not rational on an individual basis (as in the cost to the individual is greater than the benefit).

      The libertarians deny the problem of cheating and enforcement. Everyone contracts freely (ignoring the fact that negotiations are costly) and if anyone misbehaves, the courts are the remedy. That assumes going to court is cost free and everyone has equal access to the courts.

      The more you have concentrated economic power (and a lack of regulations to somewhat equalize power among market participants, like disclosure and transaction execution rules in the US stock market) the more people with less economic power get fleeced.

      The “rule of law” is plenty present in the communities where the lawyers were threatened. The only way to prevent that sort of threat is a police state like Eastern Germany where everyone spies on everyone else. Do I take it you are advocating that as a solution?

      And you seem to have missed the problem of a concerted effort to destroy someone’s professional reputation. Pray tell me how the “rule of law” solves that one.

      1. cs

        Libertarians recognize the very nature of man – imperfect. An imperfect world will never have a perfect solution. In your example, rules & regulations only empower your concentrated economic entity further, giving it greater and more effective means to accumulate more – the monopoly of the State on force and coercion.

        “And you seem to have missed the problem of a concerted effort to destroy someone’s professional reputation. Pray tell me how the “rule of law” solves that one.”

        A court system that actually focused on private property rights would not be overburdened the way the current US court system is with lawsuits from the rules & regulations. (Drug war, frivolous ADA lawsuits, etc.) Instead, you’d find that it would be responsive to Defamation lawsuits.

        1. Yves Smith Post author

          You’ve evidently never been within hailing distance of a real lawsuit (as in anything more serious that small claims court). The matter at hand has to be worth more than $300,000 and you have to have a decent chance of success to even consider going down that path. You are up to $50,000 in expenses in no time, and opposing counsel can engage in all sorts of tricks to make the action cost you more if they think you have financial constraints (ie, they can win a war of attrition). So the deck is stacked in favor of the party with deeper pockets, and if you are fighting a big or even middle sized company, that party ain’t gonna be you.

          Plus in the Glenn Greenwald scenario, how would you even prove defamation? He got lucky in that Anonymous did a raid. But the would have gone after him via multiple parties. It would have looked like a groundswell of doubt rather than an orchestrated attack. The odds that he would have found HB Gary was behind it, much the less then prove it in court, is close to nada.

  27. tz

    Speaking as a libertarian, you have said nothing in the post I can disagree with.

    (WARNING, long rant ahead)

    My problem is with the “solutions”. Instead of letting me arm or even defend myself, whether physically or in a real system of justice, what is created is captive regulators, that tend to do more for show including show trials.

    Your solution to coercion is more coercion. I end up being squeezed by the big businesses who don’t want new and disruptive competition, and the government that creates barriers that only economies of scale can handle. I cannot build a vehicle no matter if it would be safer, cleaner, and cheaper – it has to go through tests costing a billion. I cannot even invent since the patent system is capricious and convoluted.

    And there is the rub. GOVERNMENT PROTECTS THE COERCION DONE BY BUSINESSES. All the examples you cite, people could have risen up and yes, there would have been war, but it would have been a just war and a different result. When the people rise up? They call in the army, national guard, or financially, the Federal reserve to crush people who would have otherwise been capable of seeing to their own justice. Apple or Microsoft, or the Entertainment giants won’t send out their private thugs if they think I violated something, they will send government thugs.

    When businesses grossly violate the law, nothing happens. When any individual does, the government comes down hard.

    Power protects power, and corruption protects corruption.

    Only humility can crush power, and only truth and honor can crush corruption.

    The democrats and republicans are no different – Obama is W’s 3rd term. Why should I expect this bifurcated pantomime to be any different when it is you and the coercive utopian socialists crushing me from one side while proclaiming it is to fight the evil businesses, and the big businesses crushing me from the other side proclaiming it is to fight the evil socialists?

    GET THE HELL OUT OF MY WAY! LEAVE ME ALONE. GIVE ME – NOT SOME AGENT YOU OR THEY APPOINT – THE POWER TO DEFEND MYSELF AND TO FIGHT BACK. IF I HAVE TO DEFEND MYSELF, LET THE JURY NULLIFY THE ARROGANCE, STUPIDITY AND CORRUPTION OF THE EVILDOERS.

    You can’t coerce people who can defend themselves, shoot back, or even start competing businesses, or find somewhere or something else to get what they would have gone to the coercer.

    You and the businessmen you hate are both the same. Both evil. Both desiring to be masters. Both crushing freedom.

    You are trying to fight corruption with corruption, not purification. You are trying to fight coercion with coercion, not freedom. You are trying to fight lies with different lies, not the truth. You are trying to fight injustice with more injustice, not the full due-process honorable justice.

    You simply want power, not justice, truth, honor, or freedom. You say you will use it to my benefit. But you will not give me the power (liberty!) so I can decide to wield it myself. You say everyone else it too dumb to understand, so can’t be trusted. I say everyone is smart enough to educate themselves or at least to realize freedom is better than your slavery or theirs.

    Why should I care if it is your heel at my throat or that of the Koch brothers? You will have nicer heels? Nicer guns? I will be your house slave instead of their field slave? You will be a kind mistress? What if I don’t want to be the slave of either you or the Koch brothers? What alternative will you allow me and people like me?

    You are absolutely right that there government is not the only means of coercion, but instead of offering freedom, you want the monopoly on coercion for yourself. You do not hate the coercion, merely that you aren’t the one doing all of it.

    There is a fairly large Catholic libertarian movement, people like Thomas E Woods. It is appropriate on this feast day of St. Joseph the worker, Divine Mercy Sunday, and of the beatification of Pope John Paul II who wrote Centisimus Annus, in the tradition explaining Labor and the evils of socialism every decade since Rerum Novarum.

    That view tries to balance local and national (subsidiarity), recognizes solidarity – that we are all humans with the attendant dignity, and seeks the freedom of both the body and spirit of man against all evils.

    The first rule is that you cannot use an evil means to achieve even the most good of ends. No one considers themselves or what they want to do evil and will use every rationalization to call it something else. But if coercion is an evil why is the tool you seek to use?

    If you have read my rant this far, you will probably say I’m not proposing anything. Well I am, but you won’t accept it. The 1914 pure food and drug act is a model. If a product is mislabeled, anyone can go to court and get triple damages. Individuals. Not class actions, not the USDA, FDA, or the rest. I should have a similar power over my bank if they defraud me.

    Instead I have to depend on the kindness, competence, and the incorruptibly of the latest goldman-sacs drone at the SEC. Or your drones. I don’t want to depend on any drone. Let me and anyone else who is harmed take their cause to an expanded common pleas or a jury trial with judgments where I can go to the local sheriff or police and go to their office and clean out cash and property to settle it.

    It’s May Day.

    POWER TO THE PEOPLE. Not the bureaucrats or the businesses.

    Humans are in the image of God even if that image is marred. They have a mind, will, and conscience that can be darkened or ignored, but it will still exist.

    Corporations are entirely a creation of the state (something else most libertarians hate talking about if you bring it up).

    I should say you would probably make a wise Commissar and try very hard to do the right thing and might in many cases, but it is an evil thing to have a commissar wielding the power instead of having individuals wield it. You would have to work for me, the individual, at my direction, not be a conservator for poor little stupid incompetent me.

    And even if you ran everything you are not omniscient. The billions of small transactions each day affecting price and quantity – where not coerced – produce a signal, information, that no team of the brightest minds or array of the best supercomputer can calculate. You simply cannot do the job.

    I’m in software. A 100 line program can be understood and proved correct. A 10000 line program can’t. A simple, short law is easy for everyone to understand and if a judge is corrupt it shows. The clearest example is the Constitution itself. It says how to amend it – if you think it doesn’t scale or inadequate. There is no provision to destroy the clear meaning of the words to permit their opposite.

    The billions of lines of regulations handled by lots of diffuse authority is inherently corrupt because it cannot be understood, is designed to be ambiguous, incomplete, and even contradictory. You want justice? Start with shredding the federal register and limiting laws to a few general but clear lines that anyone can understand. Let individuals have the power, not bureaucrats.

    If you want freedom and to aid me in defeating coercion on all fronts I am ready to find ways we can work together to defeat it.

    If instead you think you can bridle and ride leviathan and control it for your ends, I think you are a dangerous fool. Everyone who has tried has ended up consumed or corrupted, in leviathan’s belly in either case. I am here to slay the beast, not ride it, and anyone who wants more coercion is my enemy.

    1. F. Beard

      I am here to slay the beast, not ride it, and anyone who wants more coercion is my enemy. tz

      Except coercion is OK when it comes to a government enforced gold standard? I mean, doesn’t liberty absolutely require that shiny metal?

    2. Dean Sayers

      “Only humility can crush power, and only truth and honor can crush corruption.”

      Nope, the people rising up against capitalism is not humility, and it is the only way to crush the whole structure of exploitative coercion.

  28. cs

    “It simply denies that the private sector is intrinsically dependent on the state for key functions for it to perform well, and ignores the fact its ideal of a minimal state does not scale at all.”

    This is absurd – you’re confusing libertarians and anarchists.

    Libertarianism deny no such thing and recognizes that if men were angels, the State is not necessary. Hence, it recognizes that private property, contracts, and enforcement of said rules are the key functions of the State.

    What it does argue is that the minimal state *should not* scale since the Rule of Law will be lost because the agents of the State is fallible. Imposing your sought after rules and simultaneously upholding aforementioned key functions are not possible.

    1. ScottS

      Government regulations are contracts. If you choose to run a business, you are implicitly entering into a contract with customers, and the state sets the terms based on input from the aggregate wishes of businesses and citizens.

      If I want to buy a car, I don’t need to draw up a contract from scratch with Ford specifying it has to have 4 wheels, an engine, seats, bodywork, must not explode, yada yada yada. I just want a damn car. So we had explicit regulations for certain industries, and tort for everything else.

      Regulations are just boiler-plate contracts.

      So why do Libertarians hate regulations? Because they are usually rich white males, or guys with guns, who think they’ll be on the right side when things go Mad Max. Poor people never cry about regulations. “If only Ford could build a car without airbags! Then I could afford to be killed in a rolling deathtrap!”

      Speaking of rolling deathtraps — the Pinto is the Libertarian’s dream car. Engineers originally designed it with cutting-edge safety features, namely a fuel bladder that prevented fuel leaks in rear-end collisions. But McNamera and his bean-counting “brain trust” ripped out the bladder because they figured the law suits would cost less than the fuel bladders. There is an example of lax regulation letting business “innovate.” How did that one go? The name Pinto still stinks, even 40 years later.

      So it’s up to progressives to save capitalists from themselves, YET AGAIN.

      Great post, Yves. You put your finger on the problem precisely.

      And Libertarians, seems like all we ever hear is what Libertarians aren’t. So let’s hear what you actually stand for, and think through the full implications of what you want.

      1. cs

        “Government regulations are contracts. If you choose to run a business, you are implicitly entering into a contract with customers, and the state sets the terms based on input from the aggregate wishes of businesses and citizens.”

        False, you might want to look up contract law. Your example of implicitly entering into a contract with the government, by way of contracts with other parties, lacks both consent and consideration.

        1. ScottS

          I specifically said the business-customer relationship is an informal contract with terms broadly outlined by government, with regulations being particular terms of a contract. I don’t see why I need to read about contracts. I have read quite a bit about contract law and torts. Disagreeing with you doesn’t make me wrong.

          You didn’t address my car example above. Do you want another example? How about a restaurant.

          At a restaurant, you sit down, order food, eat the food, pay, leave. There is another informal contract between the restaurant and the customer. The customer promises to pay the price of the item on the menu, the restaurant promises to prepare and serve food as described on the menu.

          If the customer walks out on the bill, the restaurant has the right to go to the police and the police have the authority to compel the customer to pay (in extreme circumstances). Likewise, the customer can go to authorities if the restaurant doesn’t serve what was promised, or what was served is harmful, and have the authorities act, using force if necessary, to compel the restaurant to behave.

          For some reason, libertarians decry this social organization. They expect the restaurant to pack firearms to compel customers to pay, and they expect the customers to do… something.. if the food makes them sick. Go to another restaurant, I presume, where the whole sorry drama can play out over again.

          This is where the Libertarian argument breaks down. They have this utopian ideal where individual liberty is king, but they don’t describe how to defend that liberty from the people with guns and money.

          Would Libertarains please move to Somalia and tell us how being “self-sovereign” works out in practice?

          Until that time, Libertarians will be treated as what we all know they are — corporatist apologists.

          1. cs

            You’re confusing anarchy with a libertarian society. Law & Order does not equal Rules & Regulations.

          2. ScottS

            Why not? How do you have law and order with no laws and no enforcement? Your position makes no sense.

            I want rules and regulations for businesses, and freedom with requisite responsibilities for myself. I want to be able to buy food and be reasonably certain it isn’t poisonous. I want businesses to spoil the environment as little as possible. This really shouldn’t be controversial.

          3. cs

            Most sane people would object that a random stranger walks up to their children and molests them while saying he’s doing a “safety check”. Yet, write-up a rule and make regulation that random molestation of children is necessary for them to board a plane and is it okay?

            Here we have a conflict of Natural Law, its codified version known as Common Law, with the Positive Law, because of our democratic “representatives”. Rules & regulations are being followed to the letter of the written legislation, but would you not say that Law & Order is being violated on a daily basis as every child is molested by a stranger?

          4. ScottS

            Most sane people would object that a random stranger walks up to their children and molests them while saying he’s doing a “safety check”. Yet, write-up a rule and make regulation that random molestation of children is necessary for them to board a plane and is it okay?

            Did you read what I said? I said I want freedom for myself, responsibility for corporations. Being groped and irradiated is not freedom. It’s a blatant civil liberty violation. On the flip-side, I want airlines to follow extremely strict safety regulations. I want air traffic controllers who don’t fall asleep on the job. Government should be going to the mat to defend my safety and liberty, mostly by enacting and enforcing regulations on large corporations.

            If corporations don’t want to play by the rules, by all means “go Galt” and set up shop in China and watch your IP get stolen, or in third-world countries where they renege on obligations and nationalize all the infrastructure you set up. And don’t come crying to Uncle Sam when the rest of the world is mean to you. You’re a Randian superman, suck it up.

            Here we have a conflict of Natural Law, its codified version known as Common Law, with the Positive Law, because of our democratic “representatives”. Rules & regulations are being followed to the letter of the written legislation, but would you not say that Law & Order is being violated on a daily basis as every child is molested by a stranger?

            Are you on drugs that you shouldn’t be on, or not on drugs that you should be on?

            The problem with democracy, especially of late, is that our obligation as citizens (increasingly referred to as “consumers”) has boiled down to pulling a lever for the mommy party or the daddy party. Democracy begins at the ballot box, it doesn’t end there. We need to participate in the process at every level. To answer the old riddle “who watches the watchers” — we do. Simply throwing our hands up in disgust because it’s hard and deciding to go Mad Max is a childish solution. Democracy is messy. Democracy is hard. Democracy doesn’t always line up neatly with your wishes or worldviews. Tough. Roll up your sleeves and participate.

        2. Yves Smith Post author

          Ahem, you really need to get up to speed here. Regulations are heavily negotiated. Look at what is happening with Dodd Frank, or more generally, the “advanced notice of proposed rulemaking” process.

          1. cs

            Yves, up to speed on what? Just because regulations are heavily negotiated by corrupt agents of the State does not mean that individuals are contractually or morally obligated to comply. The only reason law-abiding citizens do is from the threat of force from the State.

            I presume you’re using the logic of “democratic consent” by mentioning “negotiation” and implying that individuals entered into an agreement with the State through their “representatives”. Following similar principles, I could argue that since the TSA was negotiated, has support from a majority, it is perfectly okay to have Government agents harass the disabled, molest children, and sexually assault women.

          2. DownSouth

            cs said: “The only reason law-abiding citizens do is from the threat of force from the State.”

            I see you live in the same simplistic little make-believe universe as Gary Becker and Richard Posner. Anyone who has read the history of how the Danish people stood up to the Nazis on the question of “the Jewish problem” and refused to hand their Jews over to the Nazis knows that what you are hyping is inconsistent with human experience.

            For a view grounded in empiricism, and not “behavioral realism,” as the Chicago School bills the fiction it so aggressively peddles, there’s this from Dan M. Kahan:

            The ‘Logic of Collective Action’ has for decades supplied the logic of public policy analysis. In this pioneering application of public choice theory, Mancur Olson elegantly punctured the punctured the premise—-shared by a diverse variety of political theories—-that individuals can be expected to act consistently with the interest of the groups to which they belong. Absent externally imposed incentives, wealth-maximizing individuals, he argued, will rarely find it in their interest to contribute to goods that benefit the group as a whole, but rather will “free ride” on the contributions that other group members make. As a result, too few individuals will contribute sufficiently, and the well-being of the group will suffer. These are the assumptions that currently dominate public policy analysis and ultimately public policy across a host of regulatory domains—-from tax collection to environmental conservation, from street-level policing to policing the internet.

            But as a wealth of social science evidence now makes clear, Olson’s ‘Logic’ is false. In collective action settings, individuals adopt not a materially calculating posture, but rather a richer, more emotionally nuanced reciprocal one. When they perceive that others are behaving cooperatively, individuals are moved by honor, altruism, and like dispositions to contribute to public goods even without the inducement of material incentives. When, in contrast, they perceive that others are shirking or otherwise taking advantage of them, individuals are moved by resentment and pride to retaliate. In that circumstance, they will withhold beneficial forms of cooperation even if doing so exposes them to significant material disadvantage.

            [….]

            Whatever truth there is in the conventional theory is an artifact of the common acceptance of that theory’s bleak assumptions.

            So we should now reject them. To replace the conventional theory of collective action, we should construct a new and more appealing one founded on our nature as reciprocators. The logic of reciprocity not only reflects a more realistic understanding of individual emotional and moral commitments. It makes the hope that citizens will be morally and emotionally committed to contribute to the common good more realistic.

      2. F. Beard

        And Libertarians, seems like all we ever hear is what Libertarians aren’t. So let’s hear what you actually stand for, and think through the full implications of what you want. ScottS

        Good question I have tried to develop a fully consistent libertarian philosophy and failed. But at least I know one solid plank in any true libertarian platform – genuine private money supplies. And in truth, Progressives and Liberals should have no problem with them either.

        1. ScottS

          I got your back, F. Beard! I’ll always barter or exchange whatever currency you like with you.

          I think the original appeal of gold was that it was difficult to counterfeit and that is was easily exchanged globally. As long as any currency has those properties, there’s no reason to go back gold or any precious metal, because of the ridiculous downside of recurrent deflation crises.

          Let’s start our own underground currency. Hoboscrip, doubloons, favors, baby teeth, seashells, whatever you want, dude.

      3. deborama

        thank you Scott for pointing out that Libertarians are almost exclusively (straight) white males with money, and absolutely the type to think they will NEVER need any help from anybody…I have never known a single woman to be a Libertarian…women are in general much more aware of the interconnectedness and interdependency of everything, and also much more likely to need collective help and support (mostly because the men who father their babies refuse to take any individual responsiblity for them)

        1. ScottS

          Someone else pointed it out, but I can confirm it anecdotally. We can smell our own.

          As for the awesomeness of the female worldview, you should read The Illuminatis! Trilogy. Not for yourself, as you’ll find it silly and obvious, but to recommend to any men who “don’t get it.”

          There’s lots of sex and drugs in it to keep the man-child in your life entertained.

        2. ScottS

          Speaking of which, where are the ladies at? They’ve been kicking ass and taking names (figuratively) in the Middle East, but far too quiet on the western front.

          Us men broke it, it’s up to the girls to fix it. Yves can’t do it by herself!

        3. Yves Smith Post author

          Erm, I’m not so keen about gender stereotyping re innate perspectives. I think it has a lot more to do with power dynamics, that women are traditionally more economically vulnerable than men, typically earning less (in lower paid heavily female professions like nursing, often paid less in a corporate setting, and often more likely to be fired by being less likely to have upper management sponsorship). This downturn has been a big exception with unemployment being higher among men, but that hasn’t yet (IMHO) changed concerns. Women see themselves as less likely to be winners in the existing power structure, so they are more attuned to risks.

          1. ScottS

            Reminds me of something I learned in Psych 101. What we term womens’ intuition” is actually the result of socialization. That is, if someone gets the short-end of the power equation, then they will typically develop their empathy skills out of necessity. Women tend to be in that position enough that they are associated with empathy. But subservient men can be empathetically attuned, and women used to power can develop an empathy atrophy.

            That’s possibly why comptetition is more associated with men, and cooperation is associated with women. I don’t understand where social darwinists get the idea that the story of human progress is the story of competition. All historical evidence is that society moves forward on the back of cooperation.

            I know, the social darwinists are just rationalizing their greed and bloody-mindedness. Still baffling to me how they get away with it.

            All that to say, as the point was made more eloquently in The Illuminatus! Trilogy, we contain both the “male” and “female” driving forces inside us all. Subscribing to one exclusively is to throw your personality out of balance.

  29. dave

    Wow, if you support lower taxes and regulation, you support Russian mobsters killing people while a corrupt police force stands idly by.

    Straw Man of the Year?

    1. ScottS

      Indeed. Just like people who want health care for everyone are communists.

      Earn your health you lazy bums! I want to see 70-year-old firefighters rushing into burning buildings! They can bring their own oxygen tanks to save the taxpayers’ money.

    2. Deus-DJ

      Yes you do, because you fail to understand the scientific basis of group selection. By weakening the only thing society has against the power of group selectives seeking to subvert a process for their own gain, you are implicitly stating that you will allow free reign of power over the powerless. Your goal should be to make democracy work better, not to subvert it.

      1. dave

        Democracy is a fundamentally flawed system, even its proponents know that. The country was founded on the idea the rule of the mob is just as bad as the rule of the monarch, and sought to introduce concepts like liberty and private property to limit the tyranny of the mob.

        I don’t know a libertarian alive that supports Russian mob hits, but I know many leftists that signed into law massive bailouts to banksters. In the real world the government is primarily and instrument of the elite, not its counter, and that’s been going on for a long long time. Those that support increased government are therefore the pawns of the elite, who will use that increased power to their own benefit.

        1. F. Beard

          The country was founded on the idea the rule of the mob is just as bad as the rule of the monarch, and sought to introduce concepts like liberty and private property to limit the tyranny of the mob. dave

          I don’t buy that people are fundamentally a mob unless provoked and those who SHOULD deal out justice but don’t are often the source of that provocation.

          What did Hamilton give us for instance? A National Debt to the rich is his legacy.

        2. Deus-DJ

          Ok so you hate democracy and don’t care about REAL liberty, congratulations on being intellectually honest.

    3. Yves Smith Post author

      Did I say that? No. This is a classic form of psychological projection.

      But the Russian experiment was designed by the best and brightest minds of the Chicago School. Even some old IMF hands (and the IMF is awfully neoliberal in its orientation) thought it was too much, too fast.

      The proof is in the pudding. You don’t like the results and blame them on me. Funny, that.

  30. Daniel

    I think there is a very easy way to debunk libertarianism. Since libertarian don’t think the government should be involved with healthcare at all, I am calling all self-proclaimed libertarian to demonstrate one viable business model that can claim to cover 100% of the population. If it doesn’t exist, it means that you are willing to let some percentage of the population die from illnesses in the name of your ideology. Show me that one profitable business that would be willing to cover sick and old people and then I’ll be more amenable to argue with you.

    1. Susan Truxes

      I would add that we might all just debunk irresponsibility and call it good: who steps up to take responsibility for certain orphaned property like polluted water, poisoned oyster beds, thick gray air. Who steps up to manufacture enough consent to tackle that continent-sized swirl of plastic as big as the United States in the center of the Pacific Ocean? Who steps up to control all the radioactivity from all the future failed ocean side reactors. You thought mercury poisoning was a problem? It is because we are so stubbornly irresponsible that we have to be coerced, do we not? I don’t even want a world without some sensible coercion. I mean if you pollute my drinking water haven’t you coerced me into a very bad position? And all the while you just keep that dumb look on your face like “What, me worry?”

    2. Andrew Bissell

      I am calling all self-proclaimed libertarian to demonstrate one viable business model that can claim to cover 100% of the population. If it doesn’t exist, it means that you are willing to let some percentage of the population die from illnesses in the name of your ideology.

      A pretty lame argument, since every public healthcare system in the world also has some form of rationing and some way to allocate healthcare resources which are, after all, finite. Your use of the word “claim” is instructive here, since all these models can similarly only “claim to cover 100% of the population” (presumably for any and all illnesses and injuries?) without actually doing so.

      I think my favorite means of rationing is the NHS rule where they suspend one’s public coverage if one has the temerity to supplement the health care that the NHS bureaucrats deign to provide by purchasing additional health care services in the private market.

  31. yikes

    Pennsylvania Coal & Iron? Ford and GM from 80 years ago? The Moscow office of D&B?? (no government involvement there, really?…would you say the same if ex-CIA operatives did those things here)??

    Yup, with the powerful examples you cite, I’m convinced now. Those pesky corporations are much, much worse than the Federal government when it comes to power and coercion.

    1. Yves Smith Post author

      I see you like to engage is distortions.

      The point of the post is to debunk a classic strong form libertarian argument which is made all too often.

      I didn’t bother dealing with lesser forms of private sector coercion, but they are numerous. How about background checks for jobs that don’t involve handling money or accounts? So if you’ve engaged in petty forms of civil disobedience, or were engaged in litigation, no matter how legitimate, say a dispute with a landlord, you get a black mark and probably don’t get hired. This is a way for corporations to assure that no one will cross them completely outside the legal/government system.

      I see you’d rather have rule by Goldman Sachs, GE, Microsoft, I’d rather have government engage in countervailing power to concentrated corporate power. And I dimly recall that our Founding Fathers liked checks and balances.

      1. deborama

        Yves, you are the smartest economist I know. Your example of background checks is excellent. I would add drug testing to that. I walk out of any store that has a sign saying they drug test their employees. I really don’t see what business it is of my supermarket’s if their cashiers smoke a joint after their boring shifts end. You’re absolutely right, it’s all about making sure we toe the corporate line 24/7 whether it has anything to do with our performing our jobs or not (and it usually doesn’t).

        1. Yves Smith Post author

          Thanks but I’m not an economist. I argue with them on a regular basis, so I’ve gotten buzzword compatible.

      2. yikes

        Yes, I get the point you were trying to make, I just don’t think you made it very well and I thought your examples were extremely weak. BTW there was absolutely nothing in my comments that was a “distortion” (please point it out), unlike your reply, which managed to extrapolate my criticism of your post to somehow inferring support for Goldman Sachs and GE for Christ sakes!

        While we’re at it, government hiring also frequently involves background checks (as well it should), not just evil corporations, and also I doubt a dispute with a landlord or any other “legitimate litigation” will prevent someone from ever finding employment again, jeez.

        I do believe that the government’s “countervailing power” is appropriate in measured doses, but the trick is in getting that right. I also believe, unlike you, that the ability of governments to grow to abusive levels of size, influence, and power over our lives way, way trumps the risk of corporations doing the same, but I know we will never agree on this.

        Yves, you are a legendary and hugely successful torturer of Wall Street and its malfeasance, and you deserve all the plaudits you have received. But without a meaty investment scandal to sink you teeth into, and when your commentary moves to topics that I used to think were far afield, I now see exactly where your true sentiments lie. The most disappointing aspect of the incredible number of your personal rebuttals on this post in the last day or so is, I think you would actually prefer a do-loop of confirmation bias as opposed to genuine discourse. Not everyone agrees with you, it doesn’t make us wrong though, and it also doesn’t mean we don’t enjoy and appreciate your site. But I’m off it now, best wishes.

    1. gs_runsthiscountry

      flying monkeys, indeed!

      I had to check my title bar, I thought I was being redirected to Zerohedge comments section.

  32. F. Beard

    This is very soothing to hear. When I picked up that flyer and went to the bank and asked the young lady for a loan, I was the victim! Fantastic. It was that horrible young lady and her credit department. How dare they give me a loan and not look out for my best interests. Paul in TO

    Loan? What loan? That money was created as it was lent to you. Banks are essentially counterfeiters who lend out their money rather than spend it themselves – a very clever ruse invented before 1694.

    I’m the victim here and you can’t blame me. Paul in TO

    It is called “The Tragedy of the Commons”. We would all be better off if none of us borrowed from the counterfeiting cartel. However, those who do benefit at the expense of those who don’t.

    I rest my case. This represents the modern world better than I ever could. The problem in the US is that people spend all their time figuring out why they’re not responsible for their own actions and how they can qualify for victim status. Paul in TO

    The battle against the bankers has raged for centuries. Many illustrious men have warned about them.

    Well, you know what? The world is starting to view things the same way as you do. They’re the lenders and they have to take the blame for the poor borrowing victim. Paul in TO

    Who needs em? The US government should NEVER borrow in the first place either domestically or from foreigners.

    Money will not flow to the US for much longer Paul in TO

    As long the US has goods and services to sell then money will flow here.

    and then you’ll need to pay your way Paul in TO

    We always pay our own way. What is unnecessary is to pay the way of the usury and counterfeiting cartel.

    or default — blaming the lenders the whole way.

    There is no need for default, debt can be retired as it comes due with new debt-free fiat.

    Bad bankers; bad foreign governments. Paul in TO

    Correction: Bad bankers (there are no good FR bankers); silly foreign governments.

  33. Hugh

    Non-libertarians want the state to intervene when they want it to. This is completely different from libertarians who only want the state to intervene when they want it to.

    1. F. Beard

      There are those that just wish to be left alone,… Ernest Hancock

      I’m sure the thieving bankers would wish to be left alone with their ill-gotten loot.

      and there are those that just won’t leave them alone. Which one are you? Ernest Hancock

      Put me in the second camp when it comes to the government enforced counterfeiting cartel. Those who looted by government can’t complain if the government loots them back, can they?

      1. gs_runsthiscountry

        Since this thread has already veered off topic in so many directions, let jump in and as a question F Beard.

        What are you for, and what is your solution??

        So far, after reading multiple of your posts I am left with the understanding you are not for gold standard, you are not in favor of fiat currency. You seem to imply you are in favor of multiple currencies…or do i have that wrong?

        Tell us, what is your unit of account, medium of exchange and store of value.

        In your world we are back to barter….and have to punch up craigslist and exchange goats for wheat, correct?

        1. F. Beard

          So far, after reading multiple of your posts I am left with the understanding you are not for gold standard, gs_runsthiscountry

          Government must recognize no other money but its own fiat. Anything else is fascist privilege for special interests such as gold owners and miners.

          you are not in favor of fiat currency. gs_

          Fiat is the ONLY ethical government money form but it must only be legal tender for government debts, taxes and fees, not private ones.

          You seem to imply you are in favor of multiple currencies…or do i have that wrong? gs_

          More precisely, one (or fifty-one if all the States get into the act) government currencies and any number of private currencies.

          Tell us, what is your unit of account, medium of exchange and store of value. gs_

          All private currencies of consequence would have a free market exchange rate with the government’s fiat and thus to each other too.

          In your world we are back to barter….and have to punch up craigslist and exchange goats for wheat, correct? gs_

          That is precisely wrong. I propose that genuine private currencies be allowed. That would require the repeal of legal tender laws for private debts and the repeal of the capital gains tax among other things.

          But you could barter if you wish. Be my guest.

          1. Susan Truxes

            Thank you F. Beard. I have wanted to ask you that question but I thought I was too stupid. Not that I’m not.

          2. F. Beard

            @Susan Truxes

            Ask away! Sharp questions have helped refine the solution.

            Of course it is not my solution; it comes from Matthew 22:16-22.

            And I don’t know why any decent Progressive or Liberal would have a problem with the Lord. He did eat and drink with sinners you know. :) He championed the poor, the alien, the widow, the orphan, lepers, etc. He attacked the unjust rich, preached debt forgiveness, etc.

            Of course, I don’t mean you Susan! :)

          3. Jack E. Lope

            Private currencies! Honorable institutions that we trust can print money!

            We could have:
            Lehman Brothers Dollars,
            Worldcom Bucks,
            Enron Pesos,
            Braniff Bucks,
            even Madoff Money!

  34. Deus-DJ

    No, the best way to debunk libertarianism is to simply state that they are against democracy. When you implicitly deny the sovereignty of the people and give it instead to the “free market” you are inherently subverting democracy. Hayek already knew this, which is why he made a distinction between “liberty” and “democracy”. A shame modern libertarians haven’t given this enough thought to realize it. This is where modern neoliberalism comes from: Hayek’s views. Better that we have a temporary dictatorship so that liberty has a chance, rather than a democracy that doesn’t allow it to flourish…this was the essence of Hayek’s views(and he said something along this line, too, many differnt times). Modern neoliberalism has picked this up and infected the mainstream with it…look at developing countries and our attempt to make them grow using neoliberal policies, ignoring the fact that the politics of the country matter in how it grows(almost all of these countries were dictatorships).

    So it’s not necessarily a question of who has coercive power….this is entirely the wrong way to look at it. The government is an amalgamation of the citizens…if you want to prevent capture by the powerful few then YOU IMPLEMENT something while the democracy is STRONG TO PREVENT IT. So, rather than making the democracy work better libertarians are driving us backwards and making things worse.

    The key point in all of this is group selection, which is the most powerful selection process in human beings. Theories of regulation, which look to see why regulation exists and how to make it better, IMPLICITLY REALIZE that the battle regulation fights is not against individuals but AGAINST GROUPS. In other words, GOVERNMENT IS! the group selection of the people to fight against the groups who come to subvert power for their own benefit. Hence, when libertarians argue against this as government “coercion” they are destroying the foundation of democracy with ideology.

    1. readerOfTeaLeaves

      When you implicitly deny the sovereignty of the people and give it instead to the “free market” you are inherently subverting democracy.

      Precisely!

      And the very notion that the market is ‘free’ is a delusion.
      If the ‘market’ derives from complex chemical processes that pollute groundwater for 20 miles, or that spew strontium into the atmosphere, how is that ‘free’? Just because some interests control the pricing structures behind the scenes so that they are invisible to the buyers and sellers does not make any market ‘free’.

      It makes it a social venue for exchanging goods, but calling it ‘free’ does not mean those goods are accurately priced, nor does it mean the goods are produced nor sold in a sustainable fashion (environmentally, socially, and economically).

      The claim that markets are ‘free’ is an ideology that lends power to market participants (primarily corporate interests).

    2. Yves Smith Post author

      I wasn’t out to debunk libertarianism, just one argument that I find really annoying, but your point is very important.

      1. Deus-DJ

        I was actually responding to someone who said something about debunking libertarianism a few posts above mine, was having trouble with the webpage so I just made a new post.

      2. readerOfTeaLeaves

        Thanks, Yves.

        Nice to see such a passionate conversation take place around the general topic of libertarianism, and its problems.

  35. Hugh

    Most of the -isms and -ologies of today have shown themselves to be easily manipulated by the kleptocrats. Libertarianism is amenable to kleptocracy because of its laissez-faire attitude to economics –so conducive to looting– and its hostility to the social safety net –which steers resources away from the looters. So kleptocrats make use of libertarians until they need bailouts to keep their organized thefts going. Then they drop them like a red hot coal.

    There is nothing peculiar to libertarianism about this, except for the specific hot button issues associated with it which kleptocrats can exploit. You see much the same with small government conservatives who favor big government wars or are from states that receive substantially more from Washington than they send to it. You see it in moderate progressives/liberals who can always be bought off with a lesser of two evils argument, that these kleptocrats are somehow better than those kleptocrats. Indeed this is a trait they share with movement conservatives. A few rhetorical gestures from time to time is enough to keep most of them in line.

  36. Jim

    It may be that libertarians misunderstand liberalism.

    The sovereign state(in some form) is the condition of possibility for liberal order. Only a state that is elevated above society can govern us while also leaving us free.

    Over the past 35 years there has been a considerable modification of this type liberalism.

    We have gone from liberal government to a neo-liberalism of rules (perhaps even more so in Europe than the U.S.).

    Hayek was the main theoretician of this neo-liberalism of rules–he called it “spontaneous order.”

    Hayek saw liberalism’s superiority in the increasing elaboration of rules that supposedly no one in particular designed or willed but are accepted because of their great effectiveness not only for economic order but for what he called civilization in general.

    What this perspective primarily ignores, among many items, was that liberalism was and does remain a search for better government.

    Theoretically government realized itself by leaving men free as possible by granting them unprecedented latitude for action. But the government reaps the benefits of this freedom in increased prosperity and hence growing revenues.

    It is also true that our liberal order oscillates dramatically between the two poles of the market and the state.

    The period that ended recently was characterized by a strong movement toward the market, people imagined that one could do without state regulation.

    The financial and economic crisis has struck a sharp blow to this idea of governance.

    There now appears to be the possibility of repoliticization, but it is not at all clear what form it will take.

    During the 1930s the great collectivities of nation and class were reactivated but with consequences no one wants to see repeated.

    Many on this blog call upon the state as the insurer of last resort (rather than class or nation).

    Thus for the moment the liberal order remains in control, if only by default.

  37. Glen

    Good post. Pop that other idiotic assumption too where all we ever hear blathering about is government corruption when it’s quite plain to anybody with half a brain that corporate governance is now so corrupt as to be non-existent:

    No Wall St crook has gone to jail for the crash of 2008, but also of note – no Wall St corporate officer has been fired by the board for wrecking the company either.

    1. jacke

      Government corruption supported through deregulation and distortion of the rule of law now permeates our entire society. In reality, we can argue the philosophies of libertarians, communists, progressives, Democrats, Republicans, ad infinitum, but those who are lining their pockets through power, influence and our increasingly corrupt and unethical legal system don’t care about such philosophy or terminology. The banker who is using government policy (and government bailout money) to cover his game of stealing real estate on the side, making him rich outside the bank, isn’t thinking about such ideas. His fraudclosure lawyer who has set up the theft, and is now making sure that the borrower who has been taken is put into bankruptcy so that he has no way to sue the bank, doesn’t care about such ideas. The judge, tired of all these foreclosures and overloaded on cases, who issues default judgments based on the fraudclosure attorneys’ frequent appearances in his court and the same golf course, doesn’t care about such ideas. The hundreds of workers who lose their jobs to such corrupt games don’t care about such ideas.
      The original basis for a democratic government is predicated on an ethical justice system, innocence until proven guilty, and the rights of the accused be confronted with a preponderance of evidence. Today’s legal system is the most corrupt, unethical, and dangerous to our democratic system ever devised. When government officials such as Ben Bernanke embrace a total lack of regulation and enforcement of the rule of law, saying that powerful interests such as banks” acting upon their own self-interest will “do the right thing” for the country, and that federal regulators are not equipped for and should not be expected to go after such criminals, we are doomed, no matter what label one puts on it. Free markets depend upon a level playing field for all, enforced by the rule of law.

      1. wunsacon

        >> Government corruption supported through deregulation and distortion of the rule of law now permeates our entire society.

        Your statement is ass-backwards. Private parties paid for deregulation and distortion of the rule of law.

        To use attempter’s language, you’re mistaking puppet for puppet master.

  38. indio007

    Maybe we need a basic premise here.
    2 wrongs don’t make a right.

    Is it right for the STATE to offer it services at the end of a barrel of gun?
    NO!

  39. Mickey Marzick in Akron, Ohio

    The question to ask is how and why “private parties” in a capitalist political economy have coercive power?

    Without private property – my ability to deny the usage of something I own or control [water, land, natural resources] to you – the only constraint/coercive force on an individual would be that of nature.

    Expropriation of nature [privatization by individuals] beyond a certain point then requires those without their piece of nature to find something else with which to procure their existence, but not from nature so much as from other men. This great transformation in which individuals who once had a claim – right to life – on nature’s bounty into individuals who had nothing but their labor power to sell – free to starve – has taken hundreds, if not thousands, of years to accomplish. For the serf who had runaway from the manor to the nearest town and found selling his/her labor power to a local burgher was better than staying down on the manor, it was FREEDOM. But to the thousands of peasant/farmers who watched the enclosure of their piece of nature into larger sheep runs that left the vast majority of them nature-less [landless], the result was not freedom, but sixteen or more hours a day in the “Satanic Mills” of industrializing England. Hence, what initially may have started out as advantageous morphs over time into something less advantageous and may come to be seen as oppressive/coercive.

    Only when both NATURE and LABOR-POWER are decommodified – not subject to privatization – will the coercive force available to private parties cease.

    The environmental movement, in some ways, is a first attempt to establish a “global commons” in which the DECOMMODIFICATION OF NATURE might take place. That’s why opposition to it is so vociferous from reactionaries exalting the sanctity of private property, if not contract. Many a libertarian sees environmentalism as an assault on private property rights – the sine qua non individual freedom. And they’re correct insofar as an individual without private property is less free than someone who has such property [ownership of and control over water, land, natural resources] What they often overlook is how this historical condition in which so many came to have nothing but their LABOR-POWER to sell occurred, conveniently dismissing the COERCION employed to bring it about! Today we would call this ownership of and control over nature CAPITAL as it now encompasses the means of production [machinery, factories, and labor power itself.]

    CAPITAL is able to coerce LABOR by simply refusing to purchase it. Perhaps this is an effort to turn each and every one of us into “capitalists” or much-less ideologically-loaded “entrepreneurs” – the ideal of most libertarians, forcing us to be free, if you will, but not in a Rousseauian context! Unemployment/underemployment has to be seen as the DECOMMODIFICATION OF LABOR-POWER of, by, and for CAPITAL. It is conducive to capitalist accumulation in advanced capitalist political economies. And so long as labor remains a commodity, policies to promote full employment or “sharing the work” must become political issues, not just left to the invisible hand of economics.

    Up till now, most labor movements have conceded the existence of LABOR-POWER, taken it as a given, and sought to acquire “MORE” for their members from the capitalist table. The amount of coercion employed to win this concession has varied from country to country depending on the influence of anarcho-syndicalism in each, but it was when the COMMODIFICATION OF LABOR became accepted as a fait accompli that trade unions lost their revolutionary potential.

    In this country, recall that it was the Clayton Anti-Trust Act that became known as the Magna Carta of labor. Why? Because labor-power was juridically nullifed as a commodity. Hence, it was possible to organize unions because they were no longer deemed a “restraint of free trade” and subject to the Commerce Clause of the US Constitution. Any combination of workers would and often was deemed unconstitutional prior to the passage of the Clayton Anti-Trust Act. But it was only the American Federation of Labor [craft-based skilled workers] that benefitted. Industrial workers were largely excluded until the 1930s, the formation of the Congress of Industrial Organizations [CIO], and its merger with the AFL in 1955.

    It is no coincidence that the only revolutionary labor movement – the Industrial Workers of the World [IWW]- commonly known as the Wobblies in this country was a SYNDICALIST organization. That it is largely a memory attests to its extermination by both private parties and government agencies. If assassination/lynching by private police/militia didn’t work, antisyndicalist legislation enacted by many states, and the Red Scare of the 20s combined to do the rest.

    So long as the commdification of NATURE and LABOR are taken as givens, most libertarians will continue to associate private property [including labor-power] with FREEDOM. Only when they admit that private property enables one human being to coerce another will their philosophical system acquire significance for the 90% of the population borne with little more than their LABOR-POWER to sell to capitalists who increasingly employ capital and machinery to render it superfluous so as to better coerce it.

    Only when SYNDICALISM becomes the revolutionary ideology of, by, and for working people that both the DECOMMODIFICATION OF NATURE and the DECOMMODIFICATION OF LABOR will transform the institution of private property into that libertarian ideal of individual freedom for all, not just that for those who benefit disproportionately from the commodification of nature and labor manifested in, by, and for the institution of private property.

    WE SHALL BE ALL!

    1. Tomk

      Makes sense to me. My dream is a world where renting a human will be as unacceptable as owning one is now. In the meantime, back to doing a billionaires chores while mine are neglected. It’s not that I don’t appreciate the job, and even sometimes enjoy the work, but it feels wrong to trade my time for money.

  40. pezhead9000

    F.Beard: +1
    Yves: 0

    Yves, with all due respect – you have a great blog and we (readers) respect and value your opinion but you went off on a bit of a rant here. Democrats & Republicans have failed us and at least the Libertarians are trying to get us back to stricter framework based on our constitution that values:
    – individual rights
    – Peace (no foreign wars)
    – Solid money
    – Enforcing the rule of law

    And if can legalize certain substances – that would be a bonus!

    1. Deus-DJ

      No, libertarians are driving us backward(for reasons I stated above)…window dressing doesn’t make libertarianism what you claim it is.

    2. wunsacon

      >> with all due respect

      With all due respect, (L)ibertarians ally with Republicans. 59% of you voted to RE-ELECT George W. Bush, and so are as a group as much in favor on spying on Americans, war mongering, theocracy, and inflation as the rest of the Republican party.

      If you want to talk about (l)ibertarians, then I can talk, too, about (l)iberals, socialists, and greens — none of whom belong in your simplistic “Democrats & Republicans” categories.

    3. dictateursanguinaire

      Hey, Sanders, Kucinich, Grayson, et. al were all doing the same thing, minus “solid money” aka gold feudalism. Somehow when the libertarians pimp their candidates, they conveniently forget about the mixed economy people who are also hardcore civil libertarians (which includes a good chunk of the people on NC.) One can believe in sensible government regulation of the economy and still the government should keep its paws out of, e.g., the bedroom. Libertarians don’t have a monopoly on policies like drug liberalization and pretending like they do is pernicious

    4. Yves Smith Post author

      pez

      This “everyone is guilty” meme is very misleading. Did you miss the post by Bill Black two days ago?

      http://www.nakedcapitalism.com/2011/04/bill-black-my-class-right-or-wrong-–-the-powell-memorandum’s-40th-anniversary.html

      I attack Democrats more than Republicans because they engage in bait and switch and have sided with corporations pretty much as badly as the Republicans. But let’s not lose sight of where this sorry development started.

      The argument made that the state is the only source of coercive power is usually coded, by associating everything associated with the private sector as virtuous and aligned with freedom and everything involved with the state as coercion. So it is typically not stated as baldly as I have put it, simply because stating it so clearly would make it obvious how untenable the argument is. So it is finessed but inherent to the position.

      Here is a typical example (http://www.famguardian.org/Subjects/Politics/Articles/SocialismVCapitalism.htm):

      What are the characteristics of the entrepreneur? The entrepreneur is that man or woman with unlimited drive, initiative, insight, energy, daring creativity, optimism and ingenuity. The entrepreneur is the man who sees in every field a potential garden, in every seed an apple. Wealth starts with ideas in people’s heads.

      The entrepreneur is therefore above all else a man of the mind. The entrepreneur is the man who is constantly thinking of new ways to improve the material or spiritual lives of the greatest number of people.

      And what are the social and political conditions which encourage or inhibit the entrepreneurial mind? The free-enterprise system is not possible without the sanctity of private property, the freedom of contract, free trade and the rule of law.

      But the one thing that the entrepreneur values over all others is freedom–the freedom to experiment, invent and produce. The one thing that the entrepreneur dreads is government intervention. Government taxation and regulation are the means by which social planners punish and restrict the man or woman of ideas.

      Welfare, regulations, taxes, tariffs, minimum-wage laws are all immoral because they use the coercive power of the state to organize human choice and action; they’re immoral because they inhibit or deny the freedom to choose how we live our lives; they’re immoral because they deny our right to live as autonomous moral agents; and they’re immoral because they deny our essential humanity. If you think this is hyperbole, stop paying your taxes for a year or two and see what happens.

      So how do we have the enforcement of property rights and a court system? Hhm, we need a government, that means taxes. Oh, but that’s coercive and really terrible. Yet the private sector REQUIRES THESE THINGS to exist, per Heilbroner. And how did some people come to have private property? A lot of expropriation was involved, starting with indigenous people being herded off to undesirable land. That was sometimes done by private parties and blessed later by the state, BTW.

      1. dave

        So by proving courts, police, and property rights are good functions of the state you seek to prove the functions of a government vastly larger then any minimalist one that grants those things is justified?

        Nothing about liking that cops try to catch murderers justifies massive transfer payments from one generation to another, or massive industry subsidization, or a giant arms industry, etc.

        The libertarian point is simple: violence tends to lead to sub optimal outcomes. Since the party with the most access to violent means is the government, its usually the one leading to sub optimal outcomes.

        1. DownSouth

          dave said: “Nothing about liking that cops try to catch murderers justifies massive transfer payments from one generation to another, or massive industry subsidization, or a giant arms industry, etc.”

          What’s your criteria for what makes something “justified”? Most people consider murder to be morally wrong, but that redistribution of income is legitimate because it has been approved by a democratic political process.

          If we toss out morality and democracy, then what do you propose in their place to give the law legitimacy?

      2. bob goodwin

        “The everone is quilty meme” meme is also disingenuous. I would agree that corporatism has more of its roots in the republican party than the democratic party. I will also agree that the ‘free market’ meme has been turned on its head during the bailouts. But you took all of that, and blamed it on the Libertarians? If we had really had much power, don’t you think pot would be legal today? Do you think we would be in three wars?

        Libertarians are Republicans because it is the better of the two parties. Not because it is a good party. If Obama had stopped the Bush policies we might be having a different conversation today.

  41. Frankenstein Government

    So you are having a hard time distinguishing crony capitalism and splitting hairs about whether the state or corporations have coercive power? Wow. Hardly a newsflash even for us retarded libertarian types.

  42. lark

    I bet libertarians score high on the autism scale.

    They just do not understand social life. They have this notion that life with a minimal government will be more free. Problem is, a strong and competent government controls the thuggery that would otherwise arise. This thuggery can take the form of gangs or of corporations and banks. But it is thuggery and the role of a democratic government is to oppose and control it.

    Libertarians have this idea that in a world with minimal government they would prosper. I beg to differ. In a world of gangs / thugs, it is the socially clueless whose rear parts are entered and pillaged on a regular basis. That would be you, dear libbies. You really should get a clue.

    1. ScottS

      I think you’re on to something. There are two distinct types of libertarians — sincere Ron Paul Libertarians, and George W. Bush corporate boot-licking lackeys.

      I think the Ron Paul Libertarians are just guys who got lost on the way to the ACLU office. They want civil liberty, but are anti-social and don’t want to cooperate with others. Which would explain why they don’t much like unions, either. I mean, a union is private and makes its own rules — what’s not to like for Libertarians? The sticky social parts. You have to campaign to get support for your ideas then vote with everyone else and take the group’s decisions even if you don’t like them.

      I think you’re exactly right, lark. Libertarians are moderately intelligent or super-intelligent, and anti-social and completely lacking in empathy. High-functioning autistics all the way.

      1. Cahal

        I’ve always been a fan of the autism theory. Just look at Bryan caplan for gods sake.

    2. Patriot

      Absolutely. Libertarians don’t understand that in societies that don’t have a highly developed government, everything is done on a clan/family/fictitious kinship basis. That can be far more intrusive than any government. But most libertarians have never lived in that situation since they are the privileged children of American suburbia.

      1. ScottS

        Exactly right. Any exposure to a family-oriented culture would quickly disabuse Libertarians of the merits of “getting government off our backs.” With no third-party authority, alternative social hierarchies like patriarchy or matriarchy or theocracy quickly develop — infinitely more invasive and restrictive than even a police state. Which is why Big Brother is a big brother, not a bureaucrat, policeman, or any arms-length authority figure.

        Ergo, Libertarians == privileged white suburbanites.

        Libertarians have no idea how great they have it in a nanny state.

        What’s funny is that truly wealthy (whites) tend to be extremely clannish. They’ve somehow duped suburbanites into atomizing themselves, probably aware of the danger an educated, orangized middle class represents.

    3. Andrew Bissell

      Is there a term for people who are eager to diagnose those with whom they have political differences as suffering from mental illnesses and deficiencies? I know it has been a popular tactic in many totalitarian regimes, I’m just wondering if it has been given a name.

      And I’m very interested in a definition for that buzz term “anti-social” which doesn’t basically boil down to “having a less expansive view of the proper redistributive role of government than I do.”

      1. ScottS

        You got me there. I do think we have sufficient wealth to give everyone in the county a modest lifestyle whether they work or not. In addition, I think the government should be distibuting Pell grants to anyone who wants to improve themselves, and effective MacArthur grants to anyone with dedication to fine arts or socially constructive enterprise. And I think noone should be able to live in the lap of luxury coming from interest on a family fortune. Earn your luxury, or live a modest life like the other parasites.

        That would be quite redistributive, you’re correct. So sue me for thinking that:
        1. We can afford to take care of everyone and should
        2. You should have to earn life’s little perks, regardless of your genetics.

        I fail to see anything false about those two points and don’t apologize.

  43. Sauron

    There is a central paradox that every libertarian faces. If everyone is given the maximum opportunity to pursue their own liberty, it will not maximize the liberty in a society. But lead to tyrannies, monopolies, plutocracies, and warlordism. An example of such a paradox is a fire drill. If we all are constrained to act in an orderly fashion and not rush for the exits, more will be saved.

    So any reasonable libertarian must allow some constraints on liberty/coercion. Now what laws and their attendant coercive enforcement maximizes liberty is an empirical, not a ideological question. One could be an egalitarian socialist and still give a libertarian defence of it. Or one could be an anarchist and give a libertarian defence. Or somewhere in-between.

    I would argue for the egalitarian model–on the basis of empirical observation. Others may draw different conclusions.

    Which

    1. Sauron

      Talk about coercive power! I couldn’t finish my thought because of my daughter’s pestering.

      I think what is so frustrating about debating libertarians is either (a) they will deny the paradox and the empirical facts or (b)they don’t and their position is not really different from liberalism/secular humanism broadly construed but they think it is.

      Either way we have a sterile debate. Either pounding our head on a wall of pigheadedness, or a bunch of arguing about nothing in particular.

      Exacerbating this problem and muddying the debate are two problems:

      Firstly, is the fact that many that claim the mantle of liberatian, as opposed to some other liberal term (socialist, social democrat, liberal, secular humanist, etc.) are the utopian extremists (and we have to keep pounding our head on that wall) so the term ‘libertarian’ sends up a red flag for other secular humanists.

      Secondly, the moderate libertarians tend to think their position is different from liberalism/secular humanists when it is not. Furthermore they tend to think it is a’new’ and ‘exciting’ ideology when, in fact, it only is in its extreme form.

      At least that’s my take on why arguing with a libertarian is so frustrating.
      Sauron

      1. Martin Finnucane

        The frustrating thing about arguing anything with any soi-disant libertarian (with the evident exception of one F. Beard, who doesn’t really look like a Lib to me) is that the argument quickly devolves into some variant of the following: “You, sir, are worse than Hitler”; or, “You, sir, are worse than Mao”; or, “You, sir, are worse than Kim Il Sung”; or “You, sir, are worse than ” … ad vomitum. This coupled with the Lib. assessment of the putative real American legacy, so that somehow the all-hallowed Founders and Framers were actually (and anachronistically) disciples of Austrian school gold-bug hacks. An intellectually dishonest mode of discourse for an intellectually bankrupt worldview. The puzzle, to me, is why this view seems so compelling to anonymous posters on blog comment sections. Are we bing punked by Koch flunky-moles? Or does the gold standard present some sort of weird, atavistic attraction against which I am somehow immune?

        1. jonboinAR

          To someone as uneducated as me and, I suspect, many others, really, the idea of fiat money is scary. It seems to un-ground money, if you will. Hyper-inflation is just around the corner. Gold, in my abstracting, would appear to give money a real base.

          I have decided for now to place my faith in fiat money, because, for one, I think Bill Mitchell andsome around here may be on to something, though I’m not sure what. What really convinces me (provisionally, until, and if, I educate myself better) is the argument that there was more economic instability when we were on the gold standard. Maybe related to that, I don’t know, is the example of Greece, which can’t inflate itself out of a fiscal problem, lacking fiat power over the currency they use, or something. Besides, hyper-inflation keeps staying around the corner.

          Also, gold bugs seem nutty somehow. Maybe it’s the name.

          1. F. Beard

            Gold-bugs are worse than nutty; they are also often hypocritical fascists. Why? Because while they all decry government fiat, some of them wish to replace it with gold fiat!

            The only thing that makes gold look attractive as money is the current system of a government enforced money monopoly for ALL debts noit just government ones, taxes and fees.

            Let it go progressives and liberals – the idea we can get by with only a single money supply. We can’t. And if you don’t let go, the fascists may succeed in making that single money supply gold based to the harm of us all.

            Let the gold-bugs play with their shiny metal in the private sector where they can do little harm or else we might all be forced to live under it.

    2. Susan Truxes

      the contradiction between freedom and equality – and that’s just on the narcissistic human scale. Forget the rights of the earth and all its creatures

  44. Siggy

    It’s a political economy and has been since we began to aggregate into societies.

    Physical and economic coercion can be implemented by either or all of the government, private groups, institutions, corporations and individuals.

    Yves makes an interesting point and we have all of this philopsy by a number of dithering dilettants. In one sense it’s amusing, in another it’s saddening because it’s not worth arguing.

  45. Frankenstein Government

    Wow.

    Reading the comments here is so heartwarming. Name calling, diminishing statements, egos far superior to any libertarian ego. Statists, collectivists.

    Realists.

    I see how well the existing parties, you Republicans and Democrats have done. With that, I can rest my case. Do the same thing you’ve always done, get the same sorry ass results.

    1. Yves Smith Post author

      I see you are a paragon of objectivity. There is at least as much sharp rhetoric from the libertarian defenders as from the opposition in this thread. And your comment is classic “pot calling the kettle black”.

  46. Matt

    Um, how about the cases of Afghanistan and Somalia? The governments there exert practically no power, but private warlords sure do.

    1. ScottS

      Shhh! You’ll blow their fragile world-views. Then they’ll go all Galt and leave to start their own infinitely superior, productive country and show us mundanes how it’s done.

      I keep my fingers crossed.

    2. Sauron

      Those examples alway spring to my mind when I think the “state-is-evil” types.

      A hard-core libertarian, though, is in favour of a strong, but limited and tightly circumscribed, state with a monopoly on armed force. Which is fine as far as it goes, but in the larger economic and social sphere they tend to view private property as sacred and ignore economic means of coercion (or not acknowledge them as such) over considerations of justice and fairness. They will bemoan every loaf of bread stolen, but spare no thought for those who have never had a loaf of bread to steal.

      They usually try to wave away such problems by saying wide-spread injustice and unfairness wouldn’t exist if an intrusive State didn’t exist to give the unjust and unfair power, which is pretty weak. Not much better than saying there would be no criminals if there were no laws for them to break. Either that or they’ll deny/ignore non-violent coercion altogether.

  47. pezhead9000

    Ok, let’s dispel the extreme prejudices that libertarians are “anarchists” democrats are “socialists” and republicans are “facists” – though some of these may be more accurate than others.

    Thank you for the Bill Black article – I have the utmost respect for him – although I read the article as a view on the Corporatist manifesto which I don’t believe is related to Libertarianism. The libertarian view on Corporatism is that it results in a destruction of competition.
    Today’s corporations are protected by the Government – otherwise Fraud of America and other bankers would be brought down, we wouldn’t have a huge defensive industry nor a tax code that favors specific industries and that allows GE not to pay taxes.

    If we want generalizations then Democrats are Socialists where no matter how hard little Johnny works the best he can make is a ‘C’ because we live in this egalitarian dream world where everyone is average and we don’t reward hard work or ability. This didn’t work too well in the late sixties with the communes because some of the dudes figured it was better to get stoned all day then help in the garden. Finally, the others realized how ****** unfair this was and went back to law school.

    Republicans on the other hand believe given their membership to the country club they don’t have to study – their parents will donate to the booster club and they will pass with flying colors.

  48. Alex

    I recently flipped a libertarian with one simple case-in-point. I asked him if he would rather live in Nigeria, where central government is incredibly weak and violence is rampant, than in a state with a functioning bureaucracy that taxed at 30-40%.

  49. Daniel

    So I am a government contractor and work mostly with civil servants or ex civil servants (DoD or others) that are now retired and working as government contractors. Most of them have higher education and are what I consider somewhat smart. However, it is mind boggling how many of my colleagues whose income or benefits are paid by the government proclaimed themselves libertarians. They have absolutely no sense of conflict between their daily life and their ideology. Not only is libertarianism an half-baked ideology, I’d say it is a bit of a snobbery. And I am not claiming this to give myself a sense of superiority. It is purely based on the fact that if the ideology can thrive in a government subsidized environment, it must be the product of one’s psyche to differentiate oneself from its peers

  50. Cyrus Rex

    Libertarianism, to the extent that such a concept actually exists, can only survive in extremely small homogenous communities such as hunter-gatherer societies. Anything more complex quickly develops structural heirarchies and some form of governmental institutions. Large complex societies cannot exist without complex governments. The problem is how to separate the regulators from the regulated.

    The current problem in the U.S. is that the regulator is a wholly owned subsidiary of the regulated, thus equating government with the very largest corporate and financial interests. As long as this persists there is no such thing as capitalism (there never was any true libertarianism) there is only corporate socialism or, in the extreme form, pure fascism. It is possible that the problem is one of sheer size. Once institutions and corporations gain so much power they are incapable of acting independently because they are no longer flexible enough to actually compete in a competative world. Survival then depends upon corrupting the regulatory process to insure that competition is not permitted to destroy the dinosaurs, which will then continue to feed on the food of governments — the tax structure.

    It is ultimately a self-consuming and self-destructive process as we now watch the Empire consuming itself and its young with ever increasing fervor. Libertarians always sound good until someone wants to build a waste disposal site next to their estate — then the appeals and demands for government action become manic.

  51. MikeJ

    Cato Unbound had a debate on the ideas put forth by James C. Scott in Seeing Like a State (http://www.cato-unbound.org/issues/seeing-like-a-state-a-conversation-with-james-c-scott/). His thesis is that states can only exert power on what they *know*, what is “legible” to them. For example, commoners had no real need for a surname unless a king sought to keep track of them for administrative purposes (such as taxes). Assigning surnames made the people “legible” to the ruling authority.

    Brad DeLong had an interesting response in the debate. He relates the example of the Byzantine Emperor Justinian I, whose desire to impose his vision of how the society should work was undermined by wealthy and influential landowners, who preferred a type of proto-feudalism. At the end, Brad says:

    “A state that makes civil society legible to itself cannot protect us from its own fits of ideological terror, or even clumsy thumb-fingeredness. A state to which civil society is illegible cannot help curb roving bandits or local notables. And neither type of state has proved terribly effective at constraining its own functionaries.

    In some ways, the “night watchman” state — the state that enables civil society to develop and function without distortions imposed by roving bandits, local notables, and its own functionaries, but that also is content to simply sit back and watch civil society — is the most powerful and unlikely state of all.”

  52. chris murphy

    In fact for a great part of US history the the private sector controlled greater forces of physical coercion then the state. According to the historian Robin Blackburn in the 1880’s the Pinkerton detective agency had 30,000 agents while the US Army’s strength was only 27,000.

    1. F. Beard

      Excellent point that accords with my assertion that government must have a legal monopoly on non-defensive force and that it be strong in its proper domain.

  53. EmilianoZ

    Libertarianism, one of the most effective instruments of irrationality created by the oligarchy.

  54. Amin

    Hayek on wealth redistribution:

    “We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice”

    Hayek on the fatal conceit of believing government intervention can meet economic/social goals:

    “To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.”

  55. Bert

    The bottom line here is that these private armies, police, saboteurs, or goons are acting within the framework of laws passed and enforced or not enforced by the government. The government is a player here also, and in a big way.

  56. F. Beard

    Please name for me ONE example of a large society successfully governed by libertarian principles. KFritz

    I suppose the Hebrews in the time of the Judges was one:

    In those days there was no king in Israel; every man did what was right in his own eyes. Judges 17:6

    In those days there was no king in Israel; everyone did what was right in his own eyes. Judges 21:25

    As for my own philosophy, I don’t know precisely what libertarian is but I often know what it isn’t. Our banking system isn’t. It is fascist.

  57. F. Beard

    Private currencies! Honorable institutions that we trust can print money!

    We could have:
    Lehman Brothers Dollars,
    Worldcom Bucks,
    Enron Pesos,
    Braniff Bucks,
    even Madoff Money!
    Jack E Lope

    People could always choose to use the government’s fiat for all debts, not just government ones. The existence of genuine alternatives (competition) would tend to keep everyone’s money honest including the government’s

    And private monies, since they would be completely unacceptable for government debts, would have to please the private sector or go out of business.

  58. F. Beard

    Let’s start our own underground currency. … ScottS

    Why underground? The government itself should recognize the benefit of genuine private money alternatives – a healthy, stable economy to tax with a decreasing need for social services. Genuine and legal private currencies are a win-win for the private sector and government.

    The bankers would lose out, though. Good riddance!

  59. H. Skip Robinson

    “It simply denies that the private sector is intrinsically dependent on the state for key functions for it to perform well, and ignores the fact its ideal of a minimal state does not scale at all.”

    ‘Intrinsically’?

    I don’t need a government or its involvement for me to contract with another person, which is the essence of the libertarian free market philosophy. And there is nothing that free enterprise can’t do, or has done, if it is in somebody’s best interest. From building roads to creating a militia, a voluntary society has and always will perform better than a society of force and involuntary servitude

    Without capitalism we would not have houses, cars, ships, food or just about everything else we need to survive. Without government we would have a better world. The government is merely a group of leeches that use their police and military buddies (thugs) to steal from those, property which it rightfully belongs to and redistribute it to themselves and their cronies whom it does not rightfully belong to. They use the imperfections of humanity to erroneously promote their existence. And when people do, for some reason, fall for their promotional deceptions, the negative ramification always end up being worse than the original imperfection. People get food poisoning and we all of a sudden need an FDA. Of course people are still getting food poisoning and the deadly side effects from a multitude of drugs approved by the FDA but that another issue.

    We have been shown the negative ramification of government yet still hold on to this notion that the King (now oligarchs) are going to take care of us. Ignorance is bliss. How will government take care of us when first they must steal from us.

    1. jonboinAR

      I’m a simple technician, in pest control. One of my accounts is a large meat processing plant. The government, represented by USDA, makes me go through a stupid onerous process of checking, cleaning, labeling mousetraps. These traps never catch a mouse, probably never will. I have the mice very effectively controlled otherwise. Yet I waste a bunch of time every month on those stupid traps whose presence pleases USDA.

      But there’s another effect the presence of USDA has on that plant. The plant is kept very, very, very clean. If you went in there with me while I work during the hours they’re shut down and you didn’t know what the equipment was for, you could not tell by any presence of blood, meat, smell or carcass remnant whatsoever.

      You would be deluded to think that the plant would be like that without USDA looking over its shoulder constantly. They inspect the heck out of it every single day. In this case, stupid as its regulations may occasionally be, the government is quite effectively protecting you and your family from salmonella poisoning.

      You take the good with the bad, brother.

    2. attempter

      Without capitalism we would not have houses, cars, ships, food or just about everything else we need to survive.

      You’re right, nobody ate or had houses or ships before the 1700s.

      Ignorance is bliss.

      Evidently.

  60. F. Beard

    Let’s understand this libertarians (and I am one) – Wealth in an honest society (with, of course, an ethical money system) would flow to the worthy. However, since 1913 at the latest, we have not had an honest society. We have had instead a government enforced counterfeiting cartel otherwise known as the banking system. Very many of our social problems stem from that system. I note that little socialism was required in the US till the bankers wrecked the economy in the 1920’s and 30’s.

    Therefore, if we wish to transition to more liberty, then the elimination of the banking cartel should be the very top priority since it is the root problem.

  61. F. Beard

    Dear progressives and liberals,

    Little wealth redistribution would be required if the theft of it from the poor was not allowed in the first place. And how is that theft accomplished? By so-called “credit” extension in a government enforced monopoly money supply which is essentially government backed counterfeiting for the banks and well-connected.

    No theft = no need for restitution.

  62. Sig

    You either willfully misrepresent libertarian arguments or have not put a good-faith effort in to understand them.

    Clearly, private entities commit crimes. Individual, non-government people obviously commit murder, assault, fraud, rape, theft et cetera. If this is true of individual people it is also true of groups of individual non-government people- whether they be a labor union or a corporation.

    However, the difference between an individual / group committing these acts of violence and the state is liability. The state bears no liability repercussions for it’s acts of violence. Private individuals do (if they get caught, obviously.) And, in so much as certain privileged persons do not face liability, it comes via the hand of government- which is again the source of the problem.

    Your idea of ‘capital coercion’ is in essence the entire idea of a free market.

    I will give you a cow if you do X.

    I will perform the job you need done if you do X.

    X could be pay me money, build me a house, provide sexual services, or anything else.

    Refusing to enter into a contract / arrangement with you, whether I’m refusing you access to my resources (time, skills, tools, et cetera) or vice versa, does not violate either parties self-ownership. The non-aggression axiom comes from the true core belief of libertarians- that each owns himself. Read Rothbard’s ‘For a New Liberty’ if further clarification is needed.

    1. Cahal

      The state does bear repercussions; that is why we have democracy. And not only democracy, but various other political institutions set up to make governments accountable to the people and to govern through the consent of the governed.

      As for your free market ideals, well that all sounds nice, but in the real world certain parties sometimes have the bargaining power (natural monopolies, economic rent, labour markets) and the only ‘choice’ someone has is to take the offer or go without (‘going without’ meaning starving in the case of labour).

      You also haven’t dealt with defamation, ‘social’ coercion (bullying, exclusion), externalities and so forth. You simply cannot condense political philosophy down to the idea that a minimal state somehow minimises coercion; the world is just not that nice a place.

      1. Sig

        War is murder. Taxation is Theft. Conscription is Slavery. If a private individual or group of individuals were to commit any of these acts the latter term would be used instead of the former. This is the lack of liability on a fundamental basis.

        In a more perceived wrongdoing perception that you discuss, even here the state barely takes liability- http://www.cato.org/raidmap/

        Anecdotal example: http://www.seattlepi.com/local/article/No-charges-in-woodcarver-shooting-by-Seattle-1016227.php

        The difference in your other two paragraphs comes down to the method at which we arrive at our conclusions. You come from a utilitarian stance; I come from a natural rights self-ownership stance. For me, if you could prove that a tyrant king could rule to maximize happiness / minimize ‘coercion’ / maximize whatever utility metric you would like to use, I would still reject the set up as a violation of self-ownership. You would jump into it with glee.

        I do not advocate the existence of a minimal state. I advocate the existence of no state.

        The issues you bring up with are actually dealt with quite well in the book I referenced. It’s available for free here: http://mises.org/rothbard/newlibertywhole.asp

        Finally, an interesting / fun thought is to apply the perceived injustices of the system to the sexual marketplace. Now, reproduction is clearly necessary for the continuation of life; and one could argue that it’s necessary for many’s happiness. Can your perceived injustices of natural monoplies, social coercion, exclusion, and externalities be applied here? Should men and women be forced to reproduce with people they do not want to to right this injustice? But you’ll just ignore this as ‘silly.’

        1. jonboinAR

          …but I guess, working in a mine while a child as my granddad did wasn’t slavery. Huh! As I said above, you take the good with the bad.

          1. jonboinAR

            You’re in favor of eliminating government, but I don’t hear anything about big business. They will eat the likes of me without government to protect me. My grandkids will end up down in some mine. It may sound like I’m craven or something, but it’s just reality as I see it. Big, interconnected, urban-type society, with big infrastructure and big businesses to keep its lifeblood flowing, it seems to me that it requires robust government functions to keep the big fish from eating the little ones. I think I’m better off paying protection money to the government.

        2. Sig

          I desperately would like to know how your response has any logical refute of either of my arguments. A logical refute would have to explain things in self-ownership terms or debunk the idea of self-ownership.

          Instead of the employees using the violence of the state to force the employer to accept his terms, is it morally different for the employer to use the state to force the employee to submit?

          An example with numbers to make the logic more clear.

          A mine worker thinks he should be paid $1,000 an hour by the mine owner. The owner disagrees and refuses to employ him. The worker then goes to the state, coopts the states violent hand, and forces the owner to accept the worker’s terms.

          The reverse.

          A mine owner thinks that a worker should be paid $1 an hour. The worker disagrees and refuses to work for him. The owner then goes to the state, coopts the state’s violent hand, and forces the worker to accept the owner’s terms.

          How are the two situations different? Specifically, from a self-ownership standpoint or from a refutation of the idea of self-ownership.

          1. attempter

            A mine owner…

            How is it possible to “own” a mine (or land, natural resources, infrastructure…), other than through the artificial construct of big, aggressive government called “property”?

    2. jonboinAR

      The only one hiring around here is the local plant, un-unionized. I, lacking a job and needing to make rent so my family doesn’t get thrown out onto the street, go down there to apply. They say, “We’ll pay you this much and these are the working conditions.”

      I say, “That pay will barely keep us from starving and those working conditions are terrible.”

      They say, “Take it or leave it. There’s others looking for work.”

      I’m free to starve. Great. Thanks libertarians for returning us to the glorious pre-FDR times when my grandfather as a child was sent down into the mines.

      1. F. Beard

        I say, “That pay will barely keep us from starving and those working conditions are terrible.”

        They say, “Take it or leave it. There’s others looking for work.” jonboinAR

        Excellent point! The government enforced counterfeiting cartel drives the population into debt slavery thereby wrecking the economy and the solution is to reduce wages for the innocent?!

        Says who? Those without a moral clue?

        And please spare us the Austrian arguments that depressions are necessary to purge the “malinvestments”. May their jobs be the first to be purged then.

  63. H. Skip Robinson

    Cahal,
    You have not made the necessary effort to understand all aspects of a true free market system or you wounldn’t being saying things that are not true. Democracy is a fallacy. We are, as all governments are a, “Fascist Oligarchy” which attempt to control all means of production. Essentially it is the communist model with heavy taxation and regulation instead of ownership. Same results with the redistribution of wealth going to those that are in control. Read the Communist Manifesto and see for yourself how many of the 10 platforms are now law in the country. Intellectually, those that represent the Fascist/Keynesian Economic Model long ago lost the intellectual debate and are now just using pure deception and misrepresentation to continue their controls. Read Milton Friedmans book “Free to Choose” and “The Voluntary City” by the Independence Institute for starters.

  64. spark

    I see that Yves has fallen into the tar-baby trap of arguing with libertarians. It’s an endless maze with no end in sight..

    I prefer to just say “I reject the most basic premises of your argument” and leave it at that.

  65. Cahal

    Unfortunately I’ve fallen into the trap of arguing with Libertarians too.

    For the various libertarians who responded to me with various natural rights/quasi-philosophical arguments:

    – Your idea of ‘natural rights’ seems to be nothing more than ‘the right to have the state back up business’.

    – The term ‘free market’ is nonsensical. In your libertarian haven, what would you do about limited liability laws? Immigration restrictions? Laws that protect shareholders? Slavery laws? Child labour? The list goes on.

    – Please do not make condescending suggestions that I read libertarian book #429; that is simply an appeal to absent authority.

    – Libertarianism will never happen, because it’s stupid.

  66. Lance Brown

    Yves,

    Kudos for kicking anarchists in the nuts, I guess…but I didn’t read anything in your article that applied to me – a 15-year-plus L/libertarian, card-carrying LP member, and Atlas Shrugged fan, who scores 100/100 on the World’s Smallest Political Quiz.

    I can’t dedicate my evening to reading all 200+ comments, but I see two main points that should be underscored:

    1. Any libertarian who says that government is the only source of coercive power has misspoken. That’s not a faulty philosophical assertion, it’s just a factual misstatement. I could go punch someone in the face, which is use of coercive power, and I am not of the government. But that punching would be illegal, rightly so, and correspondingly, any acts of physical aggression by ANY private entity (including companies) should be illegal. Since theft of property is an act of force, and fraud is essentially a form of theft, almost all economic misconduct would fit under that same banner (i.e., should be illegal). Your examples of private force were of things that either were illegal or should have been/should be illegal (except when done only in defense).

    2. Libertarians do not believe that government should not exist. The key distinction between anarchism and libertarianism is that libertarians DO BELIEVE that government (probably) has a necessary role in society, that role being: the one legal bully/bodyguard. Government is the entity that society enlists to ensure that acts of aggression don’t occur (or that justice is done when they do), so that people can live as free people and do their thing. The economic component of that is that government becomes the ultimate adjudicator of the (otherwise free) dealings between people. Primarily, protecting against theft and fraud, and enforcing contractual agreements.

    That is the Libertarian line as I understand it from about 15 years of soaking it up from within. And almost all of what you decry in your post isn’t operating inside those parameters. (Genuine) Libertarians would be the first to say that governments should neither help corporations apply force, nor look the other way when they do. Countries and times (like the Wild West) where violent lawlessness runs wild are not examples of libertarianism in action. At all.

    You argue that such corporate influence and corrupting of police, etc. is inevitable under libertarianism (or maybe just inevitable, period?), but I don’t think that has to be the case. I may be mistaken, but I think the roots of most of the chumminess between government and business in America’s history has started with government either subsidizing or “regulating” a given industry. Loopholes aplenty for doing so exist in the powers handed out by the Constitution, and few protections stand against it. Under the current legal framework, there is literally nothing in the economic sphere that government is not allowed to get involved in one way or another.

    But if a clearer line was drawn concerning government’s role in private dealings between individuals (including all manifestations of willing groups of individuals, i.e. companies, organizations, etc.), then the possibility of a genuinely free market (or something much closer to it) could exist. And it would be a LOT more people-friendly (and abusive-corporation-unfriendly) than anti-libertarians imagine. I consider myself to be a “green libertarian”, meaning that I believe in “green” goals/values, but believe that libertarian principles are the way to get there. I wouldn’t still be behind the LP if I didn’t think that freedom is the best bet for society, the environment, and the weakest among us. (We certainly won’t get there with the unholy-alliance economic model that we’re currently following, and which is backed by the Dems, GOP, and the Greens.)

    If you ever get around to considering actual libertarian ideas, I’d love to hear what you come up with. Or how you “shred” them, I suppose. :-)

    Be well, be free,
    Lance Brown

    1. Nathanael

      Bzzzt. Learn more history.

      The control of powerful private interests over government started early. Arguably, they *created* most governments. Their interest in doing so relates partly to the desire to exert violent force (to determine who can control people and labor), but also to the government’s role as the arbiter of who owns *land* (which, in a state of nature, is not owned by anyone).

      We can argue that government should simply prevent the exploitation of labor. But we can’t get around the next problem so easily.

      Why does the government have to regulate who owns land? Fundamentally, because if it doesn’t, powerful businessman will despoil and pillage the land for their own private benefit, and to hell with the kids — it’s an attempt to address an environmental problem. The only alternative is communal, democratic land ownership, i.e. socialism…. but at too large a scale that starts to look identical to government control of land ownership.

      The only intellectually honest libertarianism is socialist.

  67. Anarcho

    Originally, libertarian was simply used by anarchists (anti-state socialists) as an alternative for anarchist. The person who coined the term was a communist-anarchist, in a letter to Proudhon (as in “property is theft!”).

    And anarchists were well aware that private property created authoritarian social relations as well as power. That was why they were (and we are) socialists (anti-capitalists). That was why Proudhon argued that “property is despotism” as well as “theft”!

    The term was used in this sense in the late 1850s, one hundred years before right-wingers in America (better called propertarians) decided to steal the word from the left:

    150 Years of Libertarian
    http://anarchism.pageabode.com/afaq/150-years-of-libertarian

    Don’t take my word for it, here is leading propertarian Murray Rothbard admitting it:

    “One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, ‘our side,’ had captured a crucial word from the enemy . . . ‘Libertarians’ . . . had long been simply a polite word for left-wing [sic!] anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over . . .” (Murray N. Rothbard, The Betrayal of the American Right, p. 83)

    So, yes, genuine libertarians (anarchists and other anti-state socialists) are well aware that private parties have coercive power too. It is only the fake “libertarians” of the right (the propertarians) who think otherwise.

  68. Wonks Anonymous

    I tried googling the Tom Ferguson quote, but all I could find was results from Yves Smith. Where is it from?

    1. Yves Smith Post author

      His book Golden Rule. There is a lot that is worth reading that is not on the Internet.

  69. Don Pratt

    Business governs more of our lives than does government.
    The consumer has little to do with the product or service, other than purchase or not.
    And, the overwhelming majority of people fear their boss, or bosses, more, and more frequently, than government.
    Often it is fear, by bosses or others with authority in voter’s lives, that makes for bad choices.
    Additionally, voters don’t generally choose what they want, just someone they don’t want, particularly after the choice of corrupt or limited dingbats is decided for them.
    Further more, BIG BUSINESS that is at the local, state or national level, owns our government before or after the elections and so few people have any desire to know, much less change, that fact.
    After all their churches, sports gods, shopping rewards and television idols have been wonderful addictions – soothing their souls.

  70. Dirk77

    270 comments and so you think after reading them they would make a dent in me one way or the other. I’m starting to wonder whether this whole blog comment thing is overrated. Has any reader ever altered his basic philosophy from all this? There may be a balance between this, traditional reading and traditional arguing one to one, but what that is I don’t know. If only I belonged to the leisure class and had the time. Daniel Ellsberg in his quasi-autobiography, argued that it was very hard to get anyone in DC to change their political course once they got there because most are so busy (and most are on a mission with their minds made up I guess). I think most people would agree that that seems to be true to a degree with regular people also. All that work just to get by. I’d give a lot to know what people a 200 years from now are going to laugh about in our views now. The Human Comedy. I guess I should be glad I’ve got a part.

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