The Hollow Libertarianism of the Right:
A Review of Kevin Carson’s Formal vs. Substantive Statism
Alan Bickley

Libertarianism, in its modern mainstream form, is a scam. It parades around in the guise of opposition to tyranny, waving the banners of “free markets” and “personal liberty,” all while turning a blind eye to the structures of power that actually shape the world. At its worst, it reduces to nothing more than cheerleading for a capitalist system that is every bit as coercive as the state it claims to oppose.

Kevin A. Carson’s Formal vs. Substantive Statism: A Matter of Context is a much-needed dismantling of this sham libertarianism. He takes apart the naïve belief that power only resides in the visible arms of the state, exposing how economic elites use corporate structures and regulatory capture by state-enforced monopolies to exert control just as insidiously as any authoritarian government. Unlike mainstream “libertarians,” who seem to think freedom is achieved the moment the government steps back, Carson recognises that the reality is far more complex.

Two Faces of Statism

Carson’s argument revolves around the distinction between formal statism and substantive statism. Formal statism is the kind of oppression everyone can see—the police, the military, government surveillance, taxation. It is what libertarians traditionally rail against. Substantive statism, however, is the deeper, more insidious kind: the ways in which power is exercised through economic structures and cartelisation. These forms of oppression don’t wear government uniforms or carry state insignias, but they are just as effective in keeping people in check.

As Carson puts it:

If the substance of statism is coercion, then substantive statism is any means by which a privileged ruling class, regardless of its formal nature, appropriates part of the labour product of the ruled by coercion.

This is the point that most modern libertarians completely fail to grasp. They act as though statism only exists when a government is directly involved, but they are blind to the coercive structures that emerge when wealth and power are concentrated in the hands of a few. They pretend that a billionaire dictating the terms of employment in a rigged market is just “free enterprise,” even when that market has been shaped by state-enforced corporate welfare and regulatory barriers that eliminate competition.

The Libertarian Fraud

This is where Carson’s analysis is at its strongest—tearing apart the hypocrisy of so-called “libertarians” who, in practice, are nothing more than corporate apologists. He is merciless in exposing the intellectual dishonesty of those who claim to fight state control but do nothing to oppose the economic monopolies that exist only because of state privilege.

The so-called ‘free market’ of actually existing capitalism is, to a large extent, the result of centuries of expropriation, enslavement, and enclosure.

This is an argument that should be obvious to anyone who isn’t ideologically blinded. The current economic system wasn’t built by rugged entrepreneurs winning out in fair competition. It was built through a long history of theft—land enclosures that robbed peasants of their means of subsistence, corporate subsidies that ensured only the biggest players could survive. And yet, the modern libertarian movement ignores all of this, pretending that the present distribution of wealth is some kind of natural outcome of free competition.

A genuine free market would require abolishing not only direct state intervention, but also the structural privileges that have accumulated over centuries of exploitation.

This is what separates Carson from the frauds who dominate mainstream libertarian thought. He understands that a truly free society isn’t just one without government control—it’s one without entrenched economic privilege.

The State as a Tool, Not the Source of All Evil

One of the most interesting parts of Carson’s argument is his rejection of the idea that all state action is inherently statist. He argues that under the right conditions, state power can actually be used to dismantle existing concentrations of power rather than reinforce them.

Where existing economic structures are based on coercion, mere abstention from action is not neutrality—it is a decision to allow the status quo to continue.

This is a crucial insight. If economic power is already centralised, then simply “deregulating” won’t create a free market—it will just entrench the power of those who already own everything. This is why Carson argues for policies like breaking up corporate monopolies and abolishing intellectual property laws. These are not statist interventions in the traditional sense—they are means of dismantling the structures that make substantive statism possible.

The standard libertarian response to this is to cry “government overreach!” and insist that markets will correct themselves. But Carson rightly points out that this is fantasy. If the starting conditions are unequal—if some people already own vast amounts of land, resources, and capital—then “letting the market work” just means allowing those inequalities to harden.

Libertarianism as a Corporate Ideology

Most modern libertarians aren’t against oppression; they just prefer it when corporations are the ones doing the oppressing. They have no problem with workers being subjected to coercive labour conditions, so long as it’s technically voluntary. They have no problem with monopolies running entire industries, so long as it’s done under the banner of “private enterprise.”

As Carson puts it:

The ideology of mainstream libertarianism has functioned, more often than not, as an ideological weapon for capital against labour.

This is why so many self-described libertarians today are little more than corporate propagandists. They fight against workplace safety regulations but say nothing about employers who force their workers into unsafe conditions. They campaign against minimum wages but have no problem with companies keeping wages artificially low through non-compete clauses and union busting. They claim to oppose state power but will go to war to defend intellectual property laws that allow corporations to monopolise entire industries.

To the extent that the state enforces artificial property rights and barriers to competition, corporate power is just another form of statism.

Exactly. The modern libertarian movement doesn’t fight coercion—it defends it. It just prefers coercion that comes from the private sector.

Conclusion: The Libertarianism We Actually Need

Carson’s Formal vs. Substantive Statism is a much-needed rejection of the shallow, corporate-friendly libertarianism that dominates the modern right. He reminds us that the real enemy isn’t just government overreach—it’s all forms of concentrated power, whether they wear the mask of the state or the corporation.

If libertarianism is to mean anything, it has to be about dismantling all forms of privilege, not just government privilege. It has to reject the structures of control that keep people in permanent subordination, whether through taxation and regulation or through economic dependence and monopoly.

Mainstream libertarians don’t want that. They want a world where the strong are free to dominate the weak, where power is unchecked so long as it wears a corporate logo. They want a world where the state isn’t abolished—it’s just outsourced.

Carson, at least, understands that this is no kind of freedom at all.