Cliches of Statism, and How to Answer Them

Tom Woods and Stefan Molyneux discuss many of the cliches libertarians find themselves having to answer, involving child labor, labor unions, monopolies, the environment, and more. Listen here.

I generally agree with the content of this discussion, except, like most mainstream libertarians, they’re going far too easy on historic capitalism in terms of the role of the state in fostering it, and the degree to which corporatism and statism continue to be interconnected.

The idea of “pro-corporate” libertarians is a joke. There’s nothing wrong with a joint stock company as a model of economic organization. Even many early socialists favored those as an alternative to state-capitalism. But the Marxist version of labor history is largely correct in that the industrial revolution simply replicated the feudal plantations as business corporations and the peasantry as the proletariat. Working conditions in 19th company towns were about the same as they were on slave plantations. They called it “wage slavery” for a reason. If it hadn’t been for the reforms of the 1930s like the Wagner Act the US might’ve had a communist or fascist revolution like Italy, Germany, and Russia. Franklin Roosevelt was a member of the capitalist class who was trying to save his class from such a fate. That’s what he said at the time.

“The True conservative seeks to protect the system of private property and free enterprise by correcting such injustices and inequalities as arise from it. The most serious threat to our institutions comes from those who refuse to face the need for change. Liberalism becomes the protection for the far-sighted conservative.”
-FRANKLIN D. ROOSEVELT, speech, Sep. 29, 1936

I would certainly agree that a genuine free economy is preferable to the New Deal model (which was mostly about pacifying the working class to prevent further upheaval), but the common claim of mainstream libertarians than the New Deal was a subversion of a previously free society is nonsense.

The Marxist critique of class exploitation is pretty much the same as the classical liberal critique with the addition of Ricardo’s labor theory of value. Even Hans Hermann Hoppe admits that. The early anarchists like Proudhon, Warren, Spooner, Tucker, De Jacque, Fourier, etc. had pretty much the same ideas as 19th century radical liberals like Molinari, De Puydt, and Bastiat. They just took it further. A lot of our modern libertarians are more like the 19th century Social Darwinists (Spencer, Sumner), which isn’t even authentic Darwism.

I generally don’t participate in “big capital vs. big government” debates because it’s kind of like arguing about whether you would rather have cancer or AIDS, and it’s an argument that proceeds from multiple false assumptions, such as a wrong understanding of both political economy and elite theory. Relying on government to rein in big capital is like treating lung cancer with cigarettes,and postulating big capital as an alternative to big government is like saying pneumocystis carinii pneumonia is an alternative to HIV.

The only true constraint on ruling class power (political, economic, whatever) is the threat of pitchfork carrying peasants capable of annihilating the ruling class i.e. the Nicolae Ceausescu treatment. The only true civic duty is not voting, jury service, or military service, but to be one of the “thieving, murderous hordes of peasants” denounced by Martin Luther.

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  1. My views are a bit muddled on this subject but here goes. While I share the view that capitalism is preferable to big government, I do not think that it is inherently good. A lot of libertarians hold it up as a Force of Light but that is highly dependent on the underlying culture. Even without big government, capitalism can easily be wielded by private owners to enslave others. Capitalism can play out in an entirely different way in Nigeria or Spain. There do not seem to be any inherent guarantees that some form of fascism or slavery could not arise in a capitalist system. Especially if the corporation is the primary form of asset ownership. The corporation is certainly a strange entity. It has a very cold and impersonal feel and mirrors governments with its’ bureaucratic structure.

    Has there ever been a purely capitalist system in any event? You would need a stateless or decentralized system of governance I would think. Certainly not in the 20th century. Even transportation innovations like the rail and roads would have probably developed very differently if not for state and corporate collaboration.But like I said, this area is a bit of a blind spot for me.

    As an aside, is Molyneaux even a libertarian? I could have sworn he denounced libertarianism and recently seemed to endorse nationalism. The cynical side of me feels as if he is just trying to broaden his audience by appealing to different groups. Sort of the way Coulter plays to her target market with immigration and an anti-war stance all of a sudden.

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