Bryan Caplan  

Outsourcing My Critique of Left-Libertarianism

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Which hurts more in the short ... The Coming Tax Increases...
Despite many areas of agreement, I think that left-libertarianism is basically wrong.  One day I'll post an in-depth critique.  Until then, I'm outsourcing the job to Daniel Shapiro and Steve Horwitz.

Shapiro highlights:
Being one's own boss is quite a risky proposition, so I would be puzzled by a confident prediction that in a freed market this would be something a large percentage of people would choose even without state barriers that make it more difficult to be one's own boss (occupational licensure, oppressive taxation, etc.)  And morally, being one's own boss is hardly an unequivocal good. I would suck at it, and I would be puzzled by anyone who argued that I should choose a life at which I have no comparative advantage.
And:
How do left-libertarians know these firms will tend to be small and flat? Firms which are financed largely by equity will, in a freed market, be those that maximize shareholder value, and how do we know that a substantial number of those firms won't be hierarchical firms? I endorse Roderick Long's argument that the larger the firm the more likely calculation chaos will impede efficiency, and it's also true that bossing people around can impede efficiency. But those are ceteris paribus claims, and it may be a firm needs to reach a certain size in order to be efficient, and that too little hierarchy can impede efficiency. So I remain puzzled.
Horwitz highlights:
[Left-libertarians] often commit a rhetorical error that is something of the obverse of what they call "vulgar libertarianism."  Left-libertarians often seem to argue that even just a little bit of statism so distorts markets that the results produced by the mixed economy bear little relationship to what a freed economy would produce.  Just as putting one drop of a liquid one owns into an unowned lake does not make the whole thing yours, neither does one drop of statism suddenly mean that the results of a mixed economy are vastly different from the results produced by a freed market.  Overstating the transformation that freed markets would bring can lead left-libertarianism to both a dangerous utopianism about freed markets and a reluctance to challenge bad criticisms of really existing markets for fear of engaging in vulgar libertarianism.
And:
The problem I often see in left-libertarian writing is the sense that the world of freed markets would look dramatically different from what we have.  For example, would large corporations like Walmart exist in a freed market?  Left-libertarians are quick to argue no, pointing to the various ways in which the state explicitly and implicitly subsidizes them (e.g., eminent domain, tax breaks, an interstate highway system, and others).  They are correct in pointing to those subsidies, and I certainly agree with them that the state should not be favoring particular firms or types of firms.  However, to use that as evidence that the overall size of firms in a freed market would be smaller seems to be quite a leap.  There are still substantial economies of scale in play here and even if firms had to bear the full costs of, say, finding a new location or transporting goods, I am skeptical that it would significantly dent those advantages.  It often feels that desire to make common cause with leftist criticisms of large corporations, leads left-libertarians to say "oh yes, freed markets are the path to eliminating those guys."  Again, I am not so sure.  The gains from operating at that scale, especially with consumer basics, are quite real, as are the benefits to consumers.
And:
Faced with the claim that "capitalism" has generated massive inequalities, libertarians can adopt two kinds of strategies. One is to argue like the left-libertarians that state intervention is responsible for the inequalities and then argue that a freed market would, perhaps, produce less inequality.  Another is to show that the data being trotted out are misleading about the real degree of inequality or income mobility and to argue that even with a palsied invisible hand, the underlying market forces are not producing massive inequality, the further impoverishment of the poor, or restricting mobility.  One could make a similar argument about the very real increase in consumption possibilities available to poor Americans. Although I think the first strategy has some truth to it, I also think this second is both rhetorically effective and correct.

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COMMENTS (11 to date)
chipotle writes:

Okay, so left-libertarianism, particularly in its more strident forms, has the feel of a "just-so story." It's as if they are saying that the way to reach left-wing goals of peace and freedom and material equality is just to go another route.

It's a little too neat.

OTOH, the criticism described in the last block quote of Horwitz suffers from the opposite problem. He says the answer is just to point out that capitalism doesn't get the credit it deserves.

Well, this is crazy. Talking about "capitalism" as if it were one uniform thing is a major mistake. How many different thousands of policies regarding economic, legal issues are there in a capitalist economy? How many of those policies are regulations which limit or define the terms of exchange? The US is not Hong Kong is not Chile is not Singapore. Aren't these all capitalist countries? And yet they're so different. All modern industrialized countries live in "mixed economies;" capitalism vs. socialism is an outmoded perspective.

That's why this discussion is hand-wavey and fruitless. Policy must be discussed on a much more granular and detailed level. Gasbags bloviating about capitalism or social democracy or even such hoary topics as equality and liberty teach us next-to-nothing and frequently make us stupider.

Jeff writes:
Faced with the claim that "capitalism" has generated massive inequalities, libertarians can adopt two kinds of strategies. One is to argue like the left-libertarians that state intervention is responsible for the inequalities and then argue that a freed market would, perhaps, produce less inequality. Another is to show that the data being trotted out are misleading about the real degree of inequality or income mobility....

Isn't there a third option: to embrace the inequality as a natural consequence of (relatively) equal opportunity coupled with wide disparities in individual talents/skills? Or are we worried our leftist friends are going to use this as a cudgel to advance their old "capitalism leads to oligarchy" line?

Troy Camplin writes:

A freed market would also be a purely self-organizing network process. One of the features of self-organizing processes is that they exhibit power law distributions. Thus, firm size would follow a power law: many small businesses, a medium number of medium-sized businesses, and a few large businesses. Thus, large businesses would not go away. Part of this is, of course, economies of scale. Thus left-libertarians are empirically wrong if they claim that a freed market would necessarily eliminate large businesses. And the fact that organizations have organizational network structures, which are hierarchical in nature (vs. scale-free network structures of self-organizing processes), suggests that the "flattening" is not realistic, either.

MikeDC writes:

What do left-libertarians actually argue on the point of inequality?

As a practical matter, I can't tell that they've influenced the thinking of anyone on the left in any meaningful way.

Glen Smith writes:

Must not understand what it means to be left-libertarian versus right because many arguments presented above seem to be the one that most of my friends who I'd consider right-libertarians cling to. Of course, most of these are conservative statist in libertarian clothing.

Peter Beardsley writes:

Glen, you're missing a point and illustrating it at the same time: left libertarianism is an inherently inconsistent worldview, so pinning down what any of it actually means is an exercise in futility.

Urstoff writes:

I wouldn't call left-libertarianism inconsistent; rather, I think basically a more utilitarian-based libertarianism rather than a rights-based libertarianism. How do we produce the best outcomes for the greatest number of people? A minimal state based on markets (or anarcho-capitalism, for some).

The problem comes in when left-libertarians start talking about social justice or inequality without explicitly stating the moral reasoning behind such concerns, as it can easily be mistaken for a position that, for example, inequality is intrinsically bad rather than bad for some type of outcome it produces.

Peter writes:

I say inherently inconsistent for this reason: the one core assumption and/or logical conclusion I've seen from all left libertarians I've ever encountered is that government can and should make freedom.

This stems from the idea that freedom is not natural, that men left to their own devices would descend into brutality and a world of might makes right. Your rights are not natural; government dictates them and creates them. Life, liberty, the pursuit of happiness...fine and noble ideas, but they're alien to the natural state of man. Government instills civility, law, and order, and these things make men more free than they would be in a natural state.

It has some assumptions, but seems reasonable enough on its face. The problem comes from the facts that (1) in this view, no rights are natural, and (2) that if rights are created by government, if government doesn't exist, there is an implicit moral obligation and theoretical possibility to do so.

If someone has a moral obligation and theoretical possibility of doing something, would they not then have the right to do it? And if they do, do they not have a set of rights (even if only limited to that one)? And if so, is there not a right endowed to man by nature / nature's God that government had no part whatsoever in creating? That's why it's inherently inconsistent.

MikeDC writes:

I'm a utilitarian who doesn't believe in any natural rights, but it doesn't follow from those premises that government "makes" freedom.

Government is an arrangement and system of agreements between people. It is not the government that "creates freedom" for people, but people who create an arrangement in which they govern themselves by allowing each other freedom. Or not.

Rights and government come into being simultaneously through the agreement of people.

Government is obviously not a maker of freedom of itself. Historically we can unequivocally demonstrate that most people put themselves or are trapped into extremely oppressive and often brutal governmental arrangements.

That is, there's no moral obligation to to make a government. Just the practical consideration that, for most people, they lead better lives if they enter into cooperative agreements with other people.

Unfortunately, once we get into those agreements, it's hard to get out of them when they become coercive and the terms of the agreements change.


Andrew writes:
For example, would large corporations like Walmart exist in a freed market? Left-libertarians are quick to argue no, pointing to the various ways in which the state explicitly and implicitly subsidizes them (e.g., eminent domain, tax breaks, an interstate highway system, and others). They are correct in pointing to those subsidies, and I certainly agree with them that the state should not be favoring particular firms or types of firms. However, to use that as evidence that the overall size of firms in a freed market would be smaller seems to be quite a leap. There are still substantial economies of scale in play here and even if firms had to bear the full costs of, say, finding a new location or transporting goods, I am skeptical that it would significantly dent those advantages.
This is a rather astonishing statement. Has the author really considered the history of the corporation in general, or even Wal-Mart specifically? Wal-Mart existed as a private company from 1945 through 1969. By 1969, there were roughly two-dozen stores. It was incorporated in 1970 and began trading stock one year later. In five years, its size had quintupled, and in fifteen years it had nearly 2,000 stores, an eighty-fold increase. That is not just "economy of scale" -- it's what happens when investors have limited liability. It also illustrates why the corporate form was created by state governments in the first place -- to amass wealth-generating entities, from which revenue could be extracted.
David Friedman writes:

One problem with the discussion, illustrated by Glen's comment, is that "left libertarianism" means (in my experience) at least three quite different things.

One is the version of libertarianism that was featured in a recent online Cato symposium in which I was one of the participants--pretty clearly, that's the version that was being discussed in this post. I'm tempted to describe it, after unsuccessful attempts to get a better definition out of its proponents, as a version of conventional libertarianism presented, and to some extent twisted, as far as practical to appeal to left wingers, especially left wing academics.

A second meaning, not too far from that, is one of several approaches, of which "geolibertarianism," meaning the position originally argued by Henry George and associated with the Single Tax, is the best known. What they have in common is some underlying argument that justifies what most other libertarians (usual sense) would see as unjustified income redistribution. For details, see two books published by Palgrave and edited by Peter Vallentyne and Hillel Steiner.

A third meaning, and the oldest, is left-wing anarchism, typically anarcho-communist or anarcho-syndicalist. That use of "libertarian" predates, I think, the modern use of the term to describe modern versions of classical liberalism, especially the more extreme versions. I suspect that is what Glen thinks of left-libertarianism as meaning, in which case his comment is correct.

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