"All the affairs of men should be managed by individuals or voluntary associations, and . . . the State should be abolished." —Benjamin Tucker

"You must first enable the government to control the governed; and in the next place oblige it to control itself." —James Madison

"Fat chance." —Sheldon Richman

Available Now! (click cover)

America's Counter-Revolution

The Constitution Revisited

From the back cover:

This book challenges the assumption that the Constitution was a landmark in the struggle for liberty. Instead, Sheldon Richman argues, it was the product of a counter-revolution, a setback for the radicalism represented by America’s break with the British empire. Drawing on careful, credible historical scholarship and contemporary political analysis, Richman suggests that this counter-revolution was the work of conservatives who sought a nation of “power, consequence, and grandeur.” America’s Counter-Revolution makes a persuasive case that the Constitution was a victory not for liberty but for the agendas and interests of a militaristic, aristocratic, privilege-seeking ruling class.

Sunday, March 16, 2008

The Federal Reserve's decision to underwrite the bailout of Bear Stearns, the giant investment bank that's in deep trouble because of its involvement with securities backed by bad subprime mortgages, further exposes what is called capitalism as a system of government intervention on behalf of capital. The problem is, as usual, that capitalism will continue to be equated with "free market," which is now valiantly being saved by George II, Fed head Ben Bernanke, and Treasury Secretary Henry Paulson.

The subprime problem has its roots in pro-business government intervention; the policies at fault were designed to help the housing industry and the lenders who write mortgages. Now the other shoe is falling. Big lenders and investors handling securitized mortgages who are in over their heads will get their promised bailout under the "too big to fail" doctrine. And the rescue will set the table for the next round of bad business decisions and the next bailout. It's called moral hazard.

What does this have to do with the free market? As Kevin Carson likes to say, if this is the free market, then I'm against it. Of course, it is not the free market. The free market is a profit and loss system void of privilege. When businesses fail, they are supposed to actually fail, not turn to the taxpayers. What we really have is (state or political) capitalism, corporatism, or fascism. An essential characteristic of this system is that while profits are private, losses are socialized, i.e., ultimately covered by the mass of people without political clout.

Unfortunately, potential allies of libertarians won't catch the distinction and will thus be further alienated from true free-market thinking. They won't realize that the free market is the system that would deliver what they want, particularly much of what they call "social justice."

Exactly right. It's this sort of thing that is used to justify government control of economic activity. The only pro-freedom position to reject both control and privilege. You can't have one without the other.

This will make it pretty easy in the future to ridicule establishment types who bloviate about "creative destruction." Apparently "creative destruction" is now only good for the little guy; it doesn't apply if you're so big the government can't afford to let you fail. And now Bush pontificates about making sure government doesn't "go too far" in intervening in the market. What a maroon.

I sincerely hope both vulgar libertarianism, and its mirror image vulgar liberalism, have feet of clay. Work like yours at the Freeman and unorthodox liberals like Dean Baker are certainly reason for hope.

Very interesting and logical -- it is good to have someone explain this properly :-). However, I would suggest that some things cannot be put in the free market and still be (morally) fair, primarily certain facets of medical care. Consider someone who has been told they'll die without treatment. What sort of price-point will the available treatments tend towards... not zero. Someone will bankrupt themselves to save their lives if they have to (and they shouldn't have to, of course and many others wouldn't be able to afford treatments).

The Center for a Stateless Society

Recognize

I am a Palestinian.

HT: Roderick Long

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Unless otherwise noted, to the extent possible under law, Sheldon Richman has waived all copyright and related or neighboring rights to all original content on the Free Association blog, through the CC0 1.0 Universal Public Domain Dedication. This work is published from: United States.

Markets Not Capitalism

What is left-libertarianism?

End the Siege of Gaza!

Handala by Naji Al Ali

“Logic and ethics are fundamentally the same, they are no more than duty to oneself.”