A Rehabilitation of Left-Libertarian Economics

7/24/2018

By Insula Qui

For those of you who are aware of any of my opinions, it might come as a surprise that I would even mention something left-libertarian. And that’s true, but only in most cases. Currently, the libertarian movement is split into factions because of cultural disagreements. Left-libertarians generally support equality, social justice, and non-discrimination. They do so passively and hope that the market will bring similar results. Right-libertarians generally are usually against the very concepts of equality, social justice, and non-discrimination. But this schism goes deeper than that.

Due to group dynamics, left-libertarians are split into two camps on economics. First, they tend to have a stronger allegiance to the Chicago school. Right-libertarians are almost universally supporters of Austrian economic theory. But secondly, the left-libertarian camp also takes inspiration from a very interesting group of people. We can call this the Spooner-Tucker-Konkin triad. We can now determine the core influences these people have had on left-libertarian economic theory. And for further clarification, Spooner is shared across both camps. Rothbard took significant inspiration from him in the critique of the state. But when it comes to economics, the left-libertarian camp is definitely more influenced by Spooner.

The first core concept is each person as a worker-capitalist-entrepreneur. Each solitary individual ought to have a role as the owner of capital, the labourer upon that capital, and the judge of market conditions. The right-libertarians are more inclined to support a steeper divide between workers, capitalists, and entrepreneurs. They see this as a natural result of the division of labour. Practically, this means that left-libertarians tend to be more receptive to causes that increase personal independence. Right-libertarians do not see the marketplace as something that facilitates independence, but something that produces values by any means necessary.

The second concept originates from the influence Proudhon had on both Spooner and Tucker. This is the concept that labour in itself is a valuable commodity. Right-libertarians tend to focus on the results of production, so they usually miss this important corollary. Because left-libertarians see labour as a valuable commodity, they focus on self-employment more than the right-libertarians do. Furthermore, they support worker related causes as the workers hold most of this valuable commodity and are the only people who can determine the uses of this commodity.

The third concept relates to that of special privileges. Right-libertarians tend to view special privileges from the state as either state-theft or circumstance. If competition is limited by regulation, the dominant company is there by circumstance. If that company receives subsidy, it does so using state-theft. Left-libertarians tend to put more focus on the company instead of the state. If a company is in a position by special legal sanction, then that company has exploited the state. This leads to a natural opposition to corporations. Furthermore, this makes left-libertarians have a much smaller estimate for the optimal sizes of firms.

We now have to touch on egoist economics and socialist anarchist economics, we can learn valuable insights from both. The core of egoist economics is the abandonment of whatever distinguishes cratics and catallactics. The libertarian has two theories, one for the production of bads, and the other for the production of goods. The egoist sees these two as one thing. If one can exploit value via threat, then that is functionally the same as when one creates something. Thus, egoists create an economic science that is not focused on creation, but rather allocation. This is not to say that egoists support threats, but rather that they do not make moral distinctions between exchanges and coercion.

The socialist anarchist sees the capitalist market as an extension of command hierarchy and the state. There will always be workers who are beholden to the capitalists and these workers will be exploited. This is because labour is not a commodity like any other, but rather a fundamental part of a person. When the control of labour is removed from that person, the person becomes alienated from his labour.

An attentive mind will have noticed that all of the following insights can be applied to libertarian economics and can even trump the right-libertarian assumptions. And this is why I consider myself a left-libertarian on economics. But now we have to still go through the arduous task of demonstrating the mechanisms by which we arrive at the conclusion that the left-libertarian arguments can beat the right-libertarian worldview.

When it comes to each person being a worker-capitalist-entrepreneur, the left-libertarians initially go further on an Austrian insight. The Austrians believe that each person acts in different quantities as a worker, capitalist, and an entrepreneur. As far as a person labours, he is a worker, and everyone must labour to some extent. As far as a person owns property, he is a capitalist, and everyone owns some degree of property, even if just in themselves. As far as a person takes part in the market, he is an entrepreneur, and everyone takes part in the market.

But the left-libertarians are even more correct in this regard. Not only is this distinction descriptive, it is normative. When left to a completely free market, each person will find it profitable to act as all three at once. A lack of interference in market signals will make entrepreneurship possible for all people. It becomes easy to see which goods are needed and who will need to produce those goods when the state does not distort demand by regulation and taxation. Furthermore, each person will find it advantageous to own property due to the drastic increase in wealth and reduction in the prices of property. There would be nothing preventing each person from owning their personal means of production insofar as their occupation allows for that. And finally, due to a lack of state grants to protect the wealth of the wealthy, all capitalists will have to work to keep their wealth.

The left-libertarians are also right in that the workers control labour. It is not a commodity that can be sold on the market without the consent of the workers. And if we now add the socialist anarchist insight, we can find that workers without control of that commodity are alienated from their labour. And due to the extensive legal systems of taxation and regulation, the state fights against workers having the right to choose their occupation. Provided that this existed and workers would not be relegated to the results of state coercion, the alienation of labour would not be a real issue.

Furthermore, right-libertarians hold a fundamentally incorrect view of the labour market. They see the capitalists as using wages to hire labour, but this is incorrect. The real transaction taking place is the sale of capital in exchange for labour with an exclusive contract to sell the results of production to the employer. This means that two exchanges take place. First, the employer takes profits for the capital he allowed the worker to use. He takes from the worker a certain degree of work hours for his own profit as these work hours are only possible due to his capital. However, after the reduction for the cost of capital is accounted for, the transaction is a simple case of workers selling their services.

This does not have to be the universal ideal. We can imagine workers paying money for capital, then distributing their own goods, and taking the profit from the sale of those goods. But this arrangement is less beneficial to the worker, so workers enter the more complex arrangement where the cost of capital is deducted from their pay since they exclusively sell their goods to their employer. Thus, the so-called labour market exchanges the right to use the property of the capitalist for the exclusive sale of the end product or service to the capitalist with the worker paying his share for the cost of the capital.

And left-libertarians are also right on special privileges, this becomes even more apparent when we consider that the production of bads and goods can be seen as the exact same thing. Companies who have special privileges, such as a corporate status, produce bads insofar as they have that special privileges. This means that companies with special privileges are the producers of both goods and bads. Ultimately, the state is ethically responsible for the production of bads, as companies do not have the power to use violence without response. However, companies can buy the privileges from the state or exploit the privileges the state has left to be exploited. In these cases, it is righteous that these companies have their assets seized insofar as they were engaged in cratic production. However, doing so would not be expedient. If our end goal is a completely free market, halting current market operations will not lead us to that goal.

<<The Unholy Synthesis of Libertarianism and Realism+++++++++++++++++++++++++++The Price of Liberty>>