Libertarians are very confused about capitalism

Elites didn't get rich off of some “free market.” Here's why libertarians should back radical wealth redistribution

Topics: Libertarianism, Ron Paul, Capitalism, Wealth, Free Market, Bitcoin, Big Pharma, CEOs, laissez-faire, JPMorgan Chase, Serfdom, Taxes, Editor's Picks, ,

Libertarians are very confused about capitalismRand and Ron Paul (Credit: Reuters/Jim Young)

“There is no evidence that capitalism exists today,” says former congressman Ron Paul. A leading libertarian voice in American politics, Paul says the land of the free no longer has free markets but an economy centrally planned by powerful elites, one that “allows major benefits to accrue to the politically connected,” not the most deserving.

These days, “corporate subsidies” and “privileged government contracts to the military-industrial complex” are the path to riches, says Paul. “This is not capitalism!”

If one defines capitalism as a system designed by and for the interests of those who hold capital (what it is), capitalism is what the United States has today. It is a system based not on principles of freedom and liberty and justice for all, but the accumulation of wealth for people called “capitalists.” It entails structuring an economy in such a way that natural resources are exploited for private gain and land is parceled off into mortgage-backed securities. It means rich people using their money to buy power and shape economic relations to their advantage, which makes them more money.

But let’s say this isn’t “capitalism,” as libertarians define it: this is not a genuine “free market,” which would entail the institution of private property and the privatized control of vital natural resources, yes, but would also be free of much if not all state intervention, with financial success based not on coercion and heavily armed people with guns but healthy and fair competition. Wealth would be a just reward for producing better widgets, not a license to rewrite the rules in one’s favor.

I am told this does not exist today, “the free market,” and I agree, but I suspect it doesn’t exist now – a capitalism based on rigid notions of private property but not systemic violence that manifests itself in a massive transfer of wealth to an already wealthy elite – for the same reason human babies aren’t born to alligators: because it’s impossible and goes against everything we know about our world.

We know that money buys power, for instance. And we know that rich people are not typically concerned with sainthood when it comes to their pursuit of money. When enormous wealth is allowed to accumulate in the hands of a small fraction of the population, then, that minority can use that wealth to manipulate economic outcomes – and they don’t care if they violate every principle known to the Paul family. That is why some oppose this concentration of wealth no matter whether it comes from “good” or “bad” capitalism.



But there is common ground here that can be exploited. Libertarians need not agree that the accumulation of enormous sums of wealth is immoral and unhelpful when it comes to the preservation of freedom, even though it is. All libertarians need to do is keep on with the “this isn’t real capitalism” stuff, because if people are getting wealthy off something other than producing the best widget in a free and competitive marketplace, then why do all those rich people get to keep all their money?

Capitalism without the change

“I complain about some of the rich,” says Ron Paul. “If the rich are getting rich because they have a super-good [government] contract … or subsidies and they’re part of that system, then you want to get rid of that system that’s doing it.”

Like other libertarians, Paul tries to distinguish between rotten and not-so-rotten rich people, despite his condemning the system as a whole; he sees a difference between those who feed at the trough of taxpayer money and those who – what? Traded Bitcoins for drugs on the federally indicted free market of the Silk Road? The thing libertarians will sometimes say but don’t want to admit invalidates most wealth by their own standards: There is not a single aspect of the U.S. economy untainted by state intervention on behalf of powerful rich people (again, a redundancy).

Drug companies, for instance, reap billions of dollars in monopoly profits due to “intellectual property” laws that make the free sharing of scientific knowledge a criminal offense. Oil and gas companies drill on public lands for private profit, while socializing the risks (“Sorry about the Gulf.” – BP). Even children’s books are subject to statism, with author J.K. Rowling becoming a billionaire only after using the legal system to ensure no one could so much as mention the name “Harry P*tter” without paying her a handsome fee.

As of 2012, the average CEO at a top American firm now makes 273 times as much as the average employee, up from a ratio of 20-1 in 1965. Few libertarians would say the market today is freer than the market then. So why don’t we hear anything about any grand, liberty-minded plans for the radical redistribution of wealth? When you change a system but keep the results of systemic injustice in place, you are not really changing anything. Who cares about “freedom” when the only difference between that and oppressive Big Government is that an absentee landlord now relies on a private security firm to kick you out of your home instead of the cops?

When property is obtained through illegitimate means, which libertarians would take to mean “not the free market,” then “the only proper solution is an immediate vacating of the title and its transfer to the [people], with certainly no compensation to the aggressors who had wrongly seized control of the land.” That’s according to Murray Rothbard, a guy Ron Paul describes as the “founder of modern libertarianism” and one of America’s “greatest men.”

Before throwing down with the angry white right in the years before his death in 1995 – going so far as to defend David Duke, a white supremacist and former leader of the Ku Klux Klan –  Rothbard exerted a lot of effort trying to make libertarianism more palatable to what at the time was a rising left. Distancing himself from those who were mere defenders of the rich, Rothbard argued that money made through systemic coercion was no more legitimate than highway robbery.

It’s OK to take it back

In his 1982 book, “The Ethics of Liberty,” Rothbard went after those sort of “American laissez-fair economists” who “tend to confine their recommendations … to preachments about the virtues of the free market.” People don’t want to hear that, he wrote: They want to know how you plan on freeing people, not some abstraction called a “market,” which sounds to many like a simple defense of the right of rich people to be richer than you.

Rothbard exempted North America from his calls for land redistribution, claiming America’s was the only “truly libertarian” property system because early settlers claimed land free of much state interference (sorry all you dead indigenous people). But not even he could keep that up. A few hundred words after that assertion, Rothbard pointed to the treatment of former slaves in America – what better illustration of how “property” comes to be defined under capitalism – and argues that it was incredibly unjust that slaves were freed only to spend the rest of their lives impoverished, working for their former masters. By contrast, wrote Rothbard, “elementary libertarian justice required not only the immediate freeing of the slaves, but also the immediate turning over to the slaves, again without compensation to the masters, of the plantation lands on which they had worked and sweated.”

By not doing so, the United States made the same mistake as Russia when it “ended” serfdom in the 19thcentury:

[T]he bodies of the oppressed were freed, but the property which they had worked and eminently deserved to own, remained in the hands of their former oppressors. With the economic power thus remaining in their hands, the former lords soon found themselves virtual masters once more of what were now free tenants or farm laborers. The serfs and the slaves had tasted freedom, but had been cruelly deprived of its fruits.

In 2005, financial giant JPMorgan – later bailed out by the very taxpayers it is currently foreclosing upon – admitted that it profited from the slave trade, which is to say: The effect of letting slave owners keep their illegitimate wealth can still be felt today. What then of the multitude of other state interventions on behalf of the unjustly rich that have happened since: “This isn’t capitalism,” right?

Let’s start over. The wealthy elite are too tainted by the current system of state capitalism for us to rely on a “good” and “bad” distinction when it comes enormous wealth. No one worth more than $10 million is able to get that much money without systemic state violence. There is no reason they should get a head start in Liberty Land.

Oh, forget raising marginal tax rates – that’s catnip for liberal suckers and people too dumb to put their money in tax shelters. Instead, distribute property that has been unjustly acquired directly to the people. Give property titles held by bailed-out banks to the people those banks are currently foreclosing upon. Pool together the salaries of Fortune 500 CEOs and distribute the money equally across the land.

Libertarians don’t have to agree on where all this ends (it ends with workers seizing the means of production), but they should understand that no matter what one replaces it with, dismantling an unjust system requires addressing the injustices that system created. If you don’t, then your idea of “freedom” will be attacked as the freedom to be exploited by the same people running the world today. And with good reason.

Charles Davis is a writer and producer in Los Angeles whose work has been published by outlets including Al Jazeera, The New Inquiry and Vice. You can read more of his writing here.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

Loading Comments...