by Cory Massimino
http://c4ss.org/content/30085
Smash the State, Eat the Rich
In Why the Rich Tolerate Being Looted Jeffrey Tucker argues the rich today act differently than they used to. They wear common clothing, avoid luxurious houses and cars, and even call for higher taxes on themselves. Tucker explains this new phenomenon by drawing upon an essay by Peter Leeson and says, “Property rights are weak today… The more property is vulnerable to looting by any source, the more people have the incentive to hide their wealth.” The logic works, however I disagree with the premise. Property rights today are weak when looking at the US economy generally. But property rights specifically for the rich are anything but.
I believe Tucker has fallen victim to a trap that many libertarians fall into when trying to defend freed markets. Tucker is espousing “vulgar libertarianism.” The term, coined by anarchist author, Kevin Carson, refers to times when a libertarian condemns the existing state power (which, of course, Tucker always adamantly does), but at the same time, defends those who benefit most from the state power. And who are the biggest beneficiaries of state violence and theft? The rich. This is not an uncontroversial opinion.
The large sums of wealth that rich people currently enjoy are not the products of entrepreneurship, or productive genius, or voluntary market exchanges. In fact, those things are great and I wish we lived in a world with more of them. Rather, these gigantic personal estates and corporations are a result of state intervention. In Let the Free Market Eat the Rich, Jeremy Weiland points out some of the ways in which the government socializes the costs of being rich leading to a system where the average Joe is subsidizing Bill Gates. He writes,
The biggest subsidy enjoyed by the wealthy lies in government regulation of finance… [Average Joes
like you and I] don’t pay for this “service” in proportion to our deposits. Instead, we help subsidize the regulation and maintenance of the financial system from which the elite depositors benefit disproportionately.
This subsidization extends to the realm of property protection as well. Weiland continues, “Police patrols of moneyed neighborhoods provide an example of socialized security, where defense and sentry costs are not paid directly by the beneficiaries.” Since the rich tend to own more property and are more likely targets of theft, they disproportionately benefit from state protective services.
Kevin Carson points out,
The dominant feature of the American polity is welfare for big business and the rich. This welfare consists of a wide array of government interventions into the market to enforce artificial scarcities and artificial property rights.
In fact, corporate welfare is rampant in the US economy. According to a study done by Good Jobs First, for state and local government, “at least 75 percent of cumulative disclosed subsidy dollars have gone to just 965 large corporations.” According to a Cato study, on the federal level, “corporate welfare in the federal budget costs taxpayers almost $100 billion a year.” That’s a $100 billion wealth transfer from the Average Joe to giant corporations.
Plus when we take the US Empire into account, Kevin Carson argues,
Adding up the so-called “defense” budget, two unfunded wars, “national security” spending on DHS, CIA, DOE and NASA, and interest on debt from past wars, the bulk of the federal government’s budget goes to welfare for the Military-Industrial Complex.
In other words, more giveaways to the rich.
These are only direct transfers to large corporations. There are also a myriad of ways in which government regulation games the system, tilting the market in favor of already established, large, hierarchical businesses headed by the rich.
State policies such as urban renewal projects, price and wage controls, licensing and safety requirements, limited liability, costly regulation, capitalization requirements, quantitative easing, financial regulation, zoning requirements, protectionist trade policy, intellectual property laws, and various other barriers to entry all promote centralization and cartelization at the expense of the voluntary transactions and private ingenuity that Tucker, as well as myself, loves so much.
These policies not only created the large disparities in income we see today, they embolden them. When large corporations face little to no competition because they have a stranglehold on the market, the middle rungs of the economic ladder are cut off. We are left at the mercy of the corporations and their special ability to channel state violence for exploitative and anti-competitive purposes.
With the advent of more and more corporatist policies, the distinction between state (“public”) and corporate (“private”) is blurred. As Rothbard argued in Confiscation and the Homestead Principle,
Government, he pointed out, is after all not a mystical entity but a group of individuals, “private” individuals if you will, acting in the manner of an organized criminal gang. But this means that there may also be “private” criminals as well as people directly affiliated with the government. What we libertarians object to, then, is not government per se but crime, what we object to is unjust or criminal property titles; what we are for is not “private” property per se but just, innocent, non-criminal private property. It is justice vs. injustice, innocence vs. criminality that must be our major libertarian focus.
A government by the rich and for the rich is nothing new, though. The status of the rich in the Gilded Age, which Tucker seems to refer to with reverence, was no more honest or virtuous than it is today, which, is to mean not honest or virtuous at all. In State Socialism and Anarchism, Benjamin Tucker identified the four (state created) monopolies of his day: the money monopoly, the land monopoly, the tariff monopoly, and the patent monopoly.” Far from being an era of laissez-faire, the late 19th century was dominated by a class of rich parasites, just like the modern economy.
The freed market, without all these distortions and giveaways, is truly an equalizing force. Weiland went on to conclude,
A truly free market without subsidized security, regulation, and arbitration imposes costs on large scale aggregations of assets that quickly deplete them… It may be that libertarianism, taken to its logical conclusion, is far more egalitarian and redistributionist than we ever dreamed – not as a function of any central State, but rather due to its lack.
Jeffrey Tucker writes,
None of us will be truly safe until the rich again walk the streets with pride, live in huge houses in full view of the hoi polloi, and dress proper to their station in life.
On the contrary, we will only know safety (from the iron fist of state capitalism) when today’s rich walk the street with woe because their friend, the state, is gone. When the rich live in shacks in full view of ghettos because their friend, the state, is gone. When the rich dress in dirty, torn clothes, because their friend, the state, is gone.
Tucker continues,
After all, a world that is not safe for the rich is not safe for the rest of us either.
I believe a firm understanding of the relationship between the rich, their fortunes, and state power leads us to conclude the exact opposite conclusion. A world that is safe for today’s rich will never be safe for the rest of us. Not until the rich’s massive fortunes, and the state power propagating them, is destroyed will we be safe. Smashing the state and eating the rich are two sides of the same coin.
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An interesting polemic. A lot of what he says seems to match personal experience: many very “rich” people I meet or observe in the UK seem to be essentially spivs or rentiers, making money from activities that simply couldn’t be so profitable in a truly free society. There is also a huge senior managerial class: it’s well compensated members, many of whom have job titles that make one scratch one’s head. These people move between the public and private sector at will, leaving havoc in their wake, increasing their compensation with every move. I don’t think this waste of resources would exist with true competition.
But he overstates his case and talk of “eating the rich” is juvenile Spartism. “Rich” is a relative term. I also meet plenty of people who are better off than me because they are harder workers, more intelligent, luckier, more charismatic, etc. Unless my kids knuckle down, these people’s offspring will also inherit such advantages. Such is life. Pretending, in a futile attempt to win-over state socialists, that a free society won’t have economic inequality or even inherited social classes is a waste of time. The point is that a free society doesn’t make these inequalities structural using violence. It allows upstarts to move upwards and the rich to fail and become less rich.
This is why we really, really need a distinct “Euro” (or “Brit”) Libertarianism. Otherwise we’re never going to make any headway while we’re dominated by this American obsessive compulsive disorder regarding “the Corporations”.
I’ve nothing against Americans per se, and if they wish to weep themselves to sleep over the memories of Benjamin Tucker and Lysander Spooner, they’re welcome to it. But it can be of little benefit to those of us looking for liberty and free markets (rather than this bizarre anarcho-communist “freed market” stuff) and I really think we need a clean break from it.
Interesting.
I think IanB has it right here, in that in essence – if I understand him – there’s nothing wrong in principle with large corporations, so long as they are subject to the same (minimal) regulation of behaviour as the rest of us.
Also, a State Monopoly of Monies is a bad idea, as Hayek and others have already said.
Indeed, David.
“The corporations” have variously experience favours and impositions by the State, as has every other notional group, class or bloc. The idea that they are somehow uniquely beneficiaries is simply the articulation with this American Progressivist narrative of “the corporations” as the enemy of “the small business” and “the people”; developed a century ago to sell socialism to Americans who, in general being in favour of markets, weren’t buying “bourgeois vs. proletariat”.
In a free society, there will be big businesses. Anyone hoping otherwise is in cloud cuckoo land, and anyone desiring otherwise doesn’t really desire a free market. The idea that if the Apple iThing is fashionable, and thus millions of people buy iThings and Apple are thus a big, successful company is somehow wrong makes no sense at all. At least to a libertarian, surely.
Exactly. Karl Marx all over again. He who railed against capital, but lived off his wife’s capital and by sponging on his pub-crawling companion (and successful industrialist), Engels. No thanks. We can always improve the present system and eliminate abuses, but spare us the Revolution. We have seen it all before.
Actually most (not all) government spending and regulations are “Social Justice” stuff that certainly do not benefit “the rich”.
“Corporations” (bodies corporate – clubs, religious foundations, trading companies and so on) go back to the Middle Ages (as does the idea of limited liability – for example one does not sue every “fellow” of a college, one sues the college, its assets).
American companies are actually some of the most highly taxed (and over regulated) in the Western world – they did not use to be (America used to be a good place to do business), this will mean long term economic decline (there has been massive RELATIVE decline over the last 60 years but it will turn into absolute decline if the polices of recent years are not changed).
As for the general envy ridden vileness of C.M.s article – it is only to be expected, leftists (in the modern sense of collectivist sworn enemies of everything libertarianism stands for) tend to be bad people and C.M. is clearly a leftist. He simply wishes to rename the state “the people” (or some such) and then plunder.
However, his desire to eat human beings (“eat the rich”) should be noted – people who plan to eat other people should be treated in the same way as rabid dogs.
It is actually tragic that some sincere people are mislead by stuff such as this article. Instead of campaigning for less government spending, lower taxes and deregulation (and the credit money system – which really is “welfare for the rich” with its “low interest rates”, “cheap money”) they spend their time denouncing “the rich” (as if the Koch Brothers and the billionaires who fund the Tides Foundation had the same opinions – on some sort of “Class” basis) and “big business”, the “capitalist corporations” – like some bad Hollywood film or television programme, or (for that matter) much of what is taught in the schools and universities.
In this way the collectivist modern “left” seek to control BOTH sides of the argument – the official “left” (the socialists – the Red Flag people) and the “alternative” (the Black Flag people – who say they want to “smash the state” when actually wanting to replace the current, vile, state of affairs with even more collectivism accept calling it “the people” or whatever).
If the modern collectivist “left” succeed in controlling both sides of the “argument” (giving a “choice” of eat-the-rich “or” eat-the-rich) then it is game over for liberty – for Civil Society.