This post on Bleeding Heart Libertarians caught my eye because of its seeming defense of ending intellectual property protection as a way to redistribute wealth without state interference (bolded below). I can’t help but identify with that argument, after having spent the last few years watching the cutthroat competition between Chinese companies. (one Chinese social network took on their largest competitor by simply setting up a mirror of their competitors site on a better domain name). Still I feel the larger argument is rather weak.
But redistribution by the state is hardly the only conceivable kind. The kind libertarians ought to favor includes five elements:
1. The elimination of privilege. Existing market structures feature a broad range of privileges that shift resources into the pockets of the wealthy and well connected—whilemaking and keeping others poor. Think occupational licensure, patents and copyrights, zoning laws and building codes, the use of eminent domain to benefit developers and their clients, transportation subsidies, and tariffs, just for starters. Ending these privileges would shift resources away from those who benefit from them and improve the economic positions of many poor and middle-class people.
2. The operation of a freed market. When privileges are absent, capitalization costs are lower, and more people can enter the market. The result is more enthusiastic competition—and, of course, the practical effect of competition is to reduce profit margins and to make it harder for people to preserve entrenched economic positions. Freeing the market is itself an act of revolutionary redistribution, because, as Jeremy Weiland emphasizes, the free market will “eat the rich.”
3. Acts of solidarity. Just because forcible redistribution by the state is problematic for multiple reasons doesn’t mean bleeding-heart libertarians should be anything but enthusiastic about wise acts of solidaristic redistribution—choices, that is, by people to share their resources benevolently with others. (Benevolence isn’t just the province of statists: among libertarians, it’s been defended even by neo-Objectivists like David Kelley and Tibor Machan.) When people give without compulsion by the state, their giving needn’t dampen their productivity. And they can ensure that it’s more effective than redistribution by the state, too. Solidaristic redistribution can be very effective as a response to accident, disaster, and ill fortune.
4. Radical rectification. The state engages in theft on a grand scale. Its cronies steal too, frequently with its blessing. Some obvious examples: the theft of land in Latin America from those who worked it—converted through violence from rightful owners to tenants and the use of eminent domain to take land from ordinary people in order to enrich the state’s corporate cronies. Land stolen in this way can and should be reclaimed by its rightful owners—without compensation to thieves.
5. Radical homesteading. Even when it doesn’t steal identifiable assets and pieces of real property from particular people, the state uses its power to take resources that don’t belong to it and to use stolen money to fund its own activities and those of its cronies. Consider, for instance, the arbitrary expropriation of vast tracts of land in colonial North America (and in the newly minted United States as well) by political authorities who proceeded to parcel it out to their cronies. Or think of the ways in which the state funnels huge sums of money to the military-industrial complex or to universities that maintain cozy relationships with the “defense” establishment. There are no specific, rightful owners of unjustly engrossed land and unjustly funded businesses or universities. But they can reasonably be regarded as unowned, and ripe for homesteading. These stolen assets should be redistributed by being claimed by ordinary people willing to occupy them, people whose just claims other should be quite willing to support.
My problem with libertarianism as practiced has always been the general refusal to acknowledge that as corporations get larger, the costs of competition get higher. This obviously differs from sector to sector – manufacturers generally have an easier time competing at smaller sizes than telecoms. But the control that Microsoft has over the PC market, Apple has over the smartphone market, and google has over the Internet, provide fairly clear examples of how easy it is for one company to either buy up or marginalize it’s competition if it is extended over an industry chain. Classical hollywood is another example from times past, and the mafia is an extreme example of the effect of the lack of governance.
The success of Standard Oil, MGM, Microsoft and Apple, was not (just) a matter of state prejudice. It was mostly due to a high capital (physical or human) cost of entry, and early success developing scale.
In other words a functional market system requires some sort of trust busting activity. Which can only really be conducted by the state. It’s an activity that the state has consistently proved bad at, for all the reasons outlined in the post, but none of the proposals outlined above except the first really address that issue. The second seems overly optimistic. The third, I agree with as a defense of private aid, but seems like it would only have a marginal effect. While in his last two points he seems to be advocating revolution, or at very least Zimbabwesque land reforms, which probably wouldn’t work as well as he imagined.
This, the pricing of externalities (environmentalism), and dealing with pro-cyclical market forces (Keynesianism), are as I see it the three major unresolved issues in establishing a market-based governance system. Luckily for libertarians they are all areas in which governments consistently fail to be effective.