The Mezunian

Die Positivität ist das Opium des Volkes, aber der Spott ist das Opium der Verrückten

The True Relationship ‘tween Economics and Power

One of the many pile drivers gainst reality laissez-faire libertarians deliver is their stated goal of separating politics and economics—commonly compared to separating politics and religion, but more accurately like trying to separate hunger from access to food.

A good place to start is to ask, what is political power? It’s obviously the power governments hold, but over what do they hold that power? Countries, right? And what are countries? Land and everything inside?

Ah, then we have found our answer: political power is resource power—economic power.

I can already hear the complaints: governments don’t just control resources; they also control people. False: they control people who use certain resources, just as capitalists do; in the government’s case, they control people who use their land just as capitalists control those who use their offices, factories, land, and other means of production. That’s what economic power is. What use is economic power if you can’t control how other people use it? Am I to understand that property rights simply protect capitalists’ rights to keep their factories and offices from awakening and attacking them like Smart House? And if so, great, then I can sleep in Microsoft headquarters and they certainly won’t call the cops to force me to leave, correct?

This logic can lead to interesting conclusions. Let’s begin a thought experiment wherein we accept capitalist ideology. Under this ethical system, if an individual and his organization owns a certain collection of resources—in this case, let’s say land and the material within—he has the right to control it in any way he wants, right? There is no limit to how large or small this collection of resources is, right? And as we mentioned before, this includes controlling how anyone uses this property. After all, if they don’t like it, they can go somewhere else, right?

Now, let us say that this individual’s name is Joseph Stalin, this organization is a little corporation known as the Soviet Union, and this collection of resources is Russia. ‘Course, there are obvious differences between the Soviet Union and the US; but it’s important to understand the nature of these differences. Corporations do, indeed, have limits in terms of how they treat the people who use their property because of government regulation. It is the lack of regulation—capitalism taken to its fullest extent—that allowed the Soviet Union to be so totalitarian.

All we need to accept this comparison are to accept two relatively reasonable assumptions:

  1. Call the Soviet Union a corporation.
  2. Accept that the Soviet Union is the rightful owner of Russia.

Point one is tautological. Capitalism would be the saddest ideology ever if it based its comparative power purely on what word we call the people in power. Furthermore, if this is the case, then state socialists should simply call for the US to be officially called a “corporation.”

Point two would probably be more controversial. It should be, but not much more than any capitalist resource distribution. Surely Americans would not pretend that such historical inconveniences such as the theft of the entire country from indigenous people and slavery would not lead to unfair resource distribution—one that does not appear to have been fixed in any way. At the very least, there is no objective proof that the US—or any capitalist country—has a particularly meritorious resource distribution (See “What the Subjective Theory Truly Means for a Meritorious Resource Distribution”), and thus theirs are backed by the same force as socialist distributions: by ownership that the state tolerates and that which it does not (what is called “theft”).

What we get from the inanity of “laissez-faire” is an Orwellian lie: support for an economy free from government intervention based on government intervention—authoritarian libertarianism. Thus we read the wise words from influential Austrian economists, Ludwig von Mises in the aptly-titled “Deception of Government Intervention”:

In the market economy the individuals are free from government intervention as long as they do not offend against the duly promulgated laws of the land. [para 3].

Translation: the market is free when individuals are free from government intervention, ‘cept those I think are necessary. This is also known as every economic ideology in the world. I’m sure Keynes and Marx would agree.

Actually, speaking of Marx, this confession of capitalism’s need for government intervention to defend “laws of the land” becomes funnier—and through which Mises seems to bolster my very point himself—when he criticizes those vile “middle-roaders” who tolerate even just a little intervention:

Such a policy of government interference with the market phenomena was already recommended by Marx and Engels in the Communist Manifesto. [para 8].

In this way, the government is forced to add to its first intervention more and more decrees of interference until it has actually eliminated any influence of the market factors. [para 13].

As we can clearly see, capitalism is just one step on the long path toward communism.

This self-contradiction leaves “libertarianism” with a logical dilemma. So-called libertarians say we need less government intervention than social democrats, and yet say we need more intervention than anarchists in order to protect from nongovernmental control (such as theft, wherein the have-nots take control of property from the haves). However, even outright socialists also only call for government intervention they feel is necessary in order to prevent nongovernmental control from corporations and the rich.

If we accept “government intervention should be eliminated, except when it’s necessary” as “libertarian,” then Keynesians, social democrats, and even socialists can just as accurately call themselves “libertarians”—indeed, some call themselves “libertarian socialists” or “libertarian communists.”

If we only accept a complete elimination of economic regulation as libertarian, then libertarianism becomes incompatible with capitalism. Without the state to uphold property ownership through suppression of theft, the system of ownership completely collapses. Indeed, libertarianism becomes self-defeating: without economic regulation, there is nothing to stop others from setting themselves up as governments and regulating the economy, whether they call themselves “corporations” or “government.”

Thus we see the sad state of the dichotomy ‘tween “capitalism” and “socialism”—two economic systems contrasted by tautology and unfounded assumptions. Leave all illusions at the door: if “socialism” is any economic system run and bolstered by the government, then “economics” and “socialism” are synonyms, and “capitalism” is simply one of many types of socialism.

Posted in Politics