historical-argument-against-libertarians

This is part of a response to a debate I'm having on Facebook. Unfortunately, that debate isn't public. But hopefully this is sufficiently stand-alone to make sense.

Roughly, I want to argue that the Right Libertarian view of the world, where the major fault-line is a divide between "markets" as in free, voluntary, horizontal structures and "the state" an oppressive, violence wielding, hierarchical structure is just plain wrong.

Instead, every epoch in history has had an economy where political power and private wealth are tightly intertwined and interdependent. The market is always embedded in, and defined by society and political power.

In the most fundamental sense. It is politics, ie. the power struggle between people and interest groups, which defines what constitutes property in the first place, who it rightfully belongs to and how it is legitimately transferred.

There can't be such a thing as a "free market" which is somehow independent of the threat of force and political power because it is precisely these things which delimit property rights. And without property rights, markets don't exist. Politics is always prior to markets, historically and conceptually.

That politics defines property was true when Pharaohs fought over land. It was true when we argued who could be owned as slaves. It's true now we argue over the extension of copyrights and software patents. Or when indigenous people protest because a government they didn't choose, sold the right to log or mine or build on their traditional hunting grounds to a foreign corporation.

In every epoch, the state (for some value of "state") defines what property is. Furthermore, what property it makes sense to have, is not given (by God or Nature) but is always historically situated : it depends on a context outside of economics, one which includes the environment and the state of technology and culture.

For example, it makes little sense for forest dwelling hunter-gatherers to develop a slave economy. Individuals in those economies need to operate with autonomy, and from loyalty to the tribe. Slaves would simply run away at the first opportunity. (It's more common for forest tribes to eat their enemies than to try to put them to work.)

Slave economies are a response to the invention of agriculture. They make sense when you can keep people working in open fields under the watch of a slave-master.

The kind of "free market" that everyone in this thread probably likes; our ideal of free craftsmen, developing and selling their skills to mutual benefit, is a response to another extra-economic phenomenon : the concentration of skilled specialists in cities. The urban market-place provided a previously unknown bandwidth of communication and so new opportunities to exchange ideas and artefacts arose, making "independent" craftsman a viable option (but see below).

In rural, agrarian communities, by contrast, the greatest wealth - land - is almost never traded, but simply passed by inheritance and marriage. And non land-owning serfs and peasants, even without restrictions from the state, have little opportunity to advance themselves by trade. Trade isn't particularly important outside the city. (Although it is important in the virtual city we're now creating online.)

However, we should also note that, even at their peak, in medieval Europe, urban craftsmen were not free agents, but bound by guilds and charters, which regulated and structured the markets, restricting who could trade what with whom.

The next twist, the corporation. An institution that could only come into existence under the patronage of the modern nation state. With the hidden subsidy of "limited liability" that shielded shareholders from the full costs of their risk-taking. This, again, was a response to, and only meaningful in, a particular historical situation. In this case, the increasing complexity and expense of capital equipment - at first, ocean-going ships, and later, steam engines, factories, mines and railways.

The best way to understand "capitalism" is as a kind of tacit deal between the nation state and a new investor-class. The state creates and protects new kinds of property like shares, and protects the property rights of the investor class. In return these "capitalists" accumulate and invest more wealth than the state could ever have achieved using its traditional fund-raising activities of taxing agricultural production and plundering its neighbours.

In short, looking at history, we don't see a long-running battle between a single ideal of freedom and and a single institution of oppression. We certainly don't see a constant notion of property rights. Instead we see evolution, a succession of species of economy occupying different niches, each of which is defined by its own specific DNA that encompasses notions of rightful authority, justice, tradition, property, religion, technique etc. Some rights, some freedoms, some obligations, and some (enforced) constraints.

That's why it makes no sense to abandon politics or "political activism" in favour of trying to solve our problems through market activities (like social entrepreneurship or building charter cities). The shape of the market and the distribution of the property are just the symptoms of the underlying power-structure.

We can't opt out of the political struggle. And there can be no notion of markets that are miraculously outside the political framework. If we had private police to enforce intellectual property, or land ownership, or limited liability, or any other property right, they'd just BE the state in all but name. And we would still have to fight to decide which laws and rights they should uphold.

For all it's faults, Democracy at least pays lip service to the idea that we individuals should have a mechanism to dispute and evolve property rights without resorting to violent direct action. If the current economy's property rights turn out not to serve us well, we should be able to vote for a new government that can change the rules.

But if we eliminate "the government" in a fit of Libertarian enthusiasm, we won't actually remove the violence-wielding power-structure that underpins the market. All we'll do is make it more opaque and remove the one sliver of accountability that is has to us as citizens.

Already, changes to property rights tend to be negotiated in secret by the World Trade Organisation with hardly any oversight by the electorate. If you formally abolish democracy you effectively usher in a situation where the same groups will keep upgrading the definition of property in consultation only with profit focussed businesses; and you won't even have a platform from which you can say that it's somehow wrong that they just created tradable pollution rights that let a fracking operation pollute your water supply. There won't really be any practical sense that it is "wrong" because there'll be no institution who's job it is to defend a right which isn't a property right.

And then the only defence we'll have against the polluter is to get a bunch of our friends together, tool up on all these new empowering self-built weapons, and go and trash his factory.

Some people might like that solution, but I'd much prefer us to have world where there are institutions that are champions of the ideal of a justice and duty of care to the weak and poor that trumps property rights and which has the legitimacy to use fore to uphold those principles.

Historical Argument Against Libertarians Random Notes