Why libertarians and others are wrong about maximally deregulated markets and laissez-faire economics

I do have an admiration for certain facets of libertarianism.  These days, any ideology that doesn’t favor pointless globalist wars, and doesn’t care for the present Orwellian degree of domestic spying, certainly does have something going for it.  However, there are some flawed characteristics about “socially liberal, fiscally conservative” (SLFC) ideologies such as libertarianism, Objectivism, anarcho-capitalism, and neoconservatism.  (The latter is worse than the others because it actually does like spit-in-your-eye wars and domestic spying.)  Their laissez-faire economic position is one of these problems, a sort of free market absolutism emphasized heavily throughout the SLFC spectrum.

This is going to be a wild ride.  I’m afraid that I’m about to piss off some readers royally here.

One problem is the SLFC tendency to use The Market as essentially a barometer of absolute good.  One way it comes out is equating what’s good for the economy with what’s good for everyone.  In conditions where a rising tide lifts all boats, that much is so.  However, it’s kind of worn out now that we’ve experienced half a century of stagnation in real wages while business productivity has been climbing steadily and upper management swims in gravy.  Lately, they’ve been introducing the idea that we’ll have to eat bugs and live in pods.  How precious.  “Let them eat cake” sounded a lot better.

Another way is equating maximum permissiveness (deregulation) for businesses with maximum liberty for the public.  This is implied by the political compass test, a popular recruitment tool for libertarians, where they take the square symbolizing freedom on both axes.  Freedom sounds great, of course, but there’s always the question of “freedom to do what?”  Regulations on businesses are meant to keep them from putting their hands in the cookie jar.

Is what’s good for The Market good for everybody?

First of all, let’s make it clear that The Market is an abstraction.  It’s a reification of the effect of lots of people buying and selling inside a marketplace, which is a domain of exchange, or several of them.  (Is there anything particularly magical about that?)  Still, in SLFC ideologies, The Market is given great emphasis; much like the Word of God is emphasized in theocracies.

The comparison is hardly an exaggeration.  As the theory goes, sooner or later, The Market will take care of any sort of problem that might arise.  That makes those supply and demand curves on a chart into sort of a universal healer.  Not only that, The Market is the force of destiny.  Economic trends are the Prime Mover, and the cosmic law that must be obeyed.  Objectivists usually are atheists, and so are some other SLFCs, but they end up all but worshiping The Market.

I’m familiar with Adam Smith’s theories.  The Market finds its own level, and prices set themselves.  I could go into a long explanation of why this is so – the “invisible hand” effect – but any introduction to supply / demand curves can do that much.  Artificially interfering with the prices will have consequences of one sort or another.  This lends itself to an anarchistic argument for having no limits whatsoever.  That means no regulations – again, the thing that keeps businesses from putting their hands in the cookie jar.  It’s quite true that too much red tape will lead to inefficiency and unnecessary hassle, but that’s not a good argument to do away with all regulation whatsoever.  The critical factor, of course, is a regulatory climate that keeps hands out of cookie jars but isn’t burdensome to legitimate trade.  Still, even that is bad according to laissez-faire doctrine.

The theory goes further than that.  Any impediment to trade is considered an absolute bad thing.  Obviously tariffs are a big no-no, and free trade agreements (in practice, a bipartisan fuckup) were a big priority in globalization.  Borders wouldn’t even exist if globalists got their way, and everyone would use one currency.  (Everyone would look the same too, but all that’s another matter.)  This isn’t so much to do with warm, fuzzy One World internationalism.  It’s so that the big players can make more money that way.  Also, getting as rich as possible isn’t enough; the NWO types expect to call the shots in any future world government.  Imagine there’s no sovereignty, it’s easy if you try, ooh ooh ooh…

Economism

SLFCs are usually economites.  In this context, this means people whose sole gauge of worth is money.  To an economite, anything you can’t put a price tag on has no value.  Therefore, a beautiful, primeval forest isn’t worth a nickel more than what you could get if you sent a logging crew to clear-cut it and then sold it to become a big parking lot.  The fact that all that natural beauty would be destroyed forever matters nothing.  Also, if an endangered species of birds lived there, tough luck for them.  Tough luck for all the other forest creatures too.  Economism ignores factors like these, among many other externalities.  Those are inconvenient details that get in the way of the theory.

If a factory closes so that it can be relocated in a country where the workers are paid peanuts and labor laws are a joke, then this is something considered to be good.  If this wipes out a small town’s economy back home, tough luck for them.  If globalization becomes a trend and devastates entire regions – such as the USA’s “Rust Belt” or Britain’s northeast – tough luck for them too.  (Feel free to imagine greedy management types rubbing their hands together gleefully.)  If The Market says that cities, regions, or even entire countries must be blighted, then so be it.  The government mustn’t try to do anything to stop it, because that would interfere with CEOs trying to squeeze pennies until they bleed.  Moreover, the politicians know which side their bread is buttered on; both parties get payola from the same major donors.

Libertarianism has much to say about individualism.  However, when economism prevails, people are merely economic units; atomized and replaceable cogs in the machine.  Does that maximize freedom for everyone?  I’ll leave that for the reader to decide.  On an odd side note, Marxism – quite different from Libertarianism – is another economite ideology, though they have a different context for the term.

Are corporations always wonderful?

As I wrote about the SLFCs in Deplorable Diatribes:

It’s rather odd how much neocons, Libertarians, and Objectivists idolize corporations. Haven’t any of them ever worked in a cubicle hell resembling Office Space? Anyone who has experienced kiss up / kick down management culture should understand that not every corporate officer is John Galt. Some of the suits are more like James Taggart, occupying themselves with looking important, claiming credit for other people’s work, and otherwise screwing up everything.

Libertarians and anarcho-capitalists especially have a preconceived bias that governments are bad and always screw up everything.  (There’s at least something to that; our present globalist regime certainly has been a mess for a long time.)  Meanwhile, they and other SLFCs often believe that corporations are always good, a position which is perfectly silly.  These ideologies do have a lot to say against collectivism.  Granted, governments are collectives, but what exactly do they think corporations are?  Why haven’t the SLFCs figured this out yet?

Corporations can be (and often are) just as capricious as the government of a banana republic.  Employees often are expected to kiss ass, just as they would be if they were citizens under a petty tyrant.  A company can’t put you in a gulag because they don’t like your opinions.  However, they can deprive an employee of his or her livelihood for nearly any reason, except in places protected by unions or strong labor laws.  Some others have vast powers over society, which I’ll describe in another article.  SLFCs tend to have an odd idea that something bad is wrong only if the government is doing it.  They don’t mind if corporations do the very same thing.

Are regulatory agencies like the EPA necessary?

There is a popular anarcho-capitalist YouTube commentator who certainly is quite intelligent, but really needs to take off the ideological blinders.  (I won’t say who this is, because he’s come a long way so far.  If you guessed who I’m talking about, you’re probably right.)  He said that we don’t need the FDA, because if any company sold bad food or bad medicine, then word would get around and it would hurt the company.  This is a perfect example of the SLFC notion that The Market will fix everything.  In this instance, he was dead wrong.

Once upon a time, hucksters plied a steady trade selling fraudulent snake oil cures and ineffective patent medicines.  Standards in the meat packing industry were pretty atrocious around that time; Upton Sinclair’s The Jungle provides the scoop on that.  These two things were the very reason why we got the FDA in the first place.  When The Market failed to fix these problems, the government had to step in.  I can imagine how it went over back then:

  • “What, I can’t sell my miracle cancer cure salve without actually proving it works?  You’re taking away my freedom as a businessman!”
  • “How dare the government tell me that I can’t sell rotten meat!  What a bunch of Fascists!”

Finally, none of the above is to say that all businesses are bad.  They do have a legitimate place in society, of course (which doesn’t include calling the shots).  The point is that they tend to be flawed to one degree or another.  This is not so different from all other human institutions, including governments.  A sensible regulatory environment is a check against companies misusing their powers, just as Constitutional protections keep enlightened governments from becoming tyrannical.  Finally, we should remember the proverb that money is a good servant but a bad master.

Why libertarians and others are wrong about maximally deregulated markets and laissez-faire economics

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