Are Libertarians Just Lazy Marxists?

One of the features libertarianism (propertarianism) shares with neoclassical economics is that it tends to take the existing economic system as a given, and proceeds to analyse from there. The result is that much of what follows could be labelled as question begging: incidence of market failure do not merely beg the question ‘how can we fix this?’ but also ‘why are there so many of these?’ Questions over ‘human nature’ become questions of ‘how humans behave under capitalism.’ Neoclassicism’s failure to address any questions about capitalism as a whole is a major flaw, and libertarianism – sharing, as it does, many intellectual similarities with neoclassicism – carries over this flaw. The result is that libertarian analysis, even when cogent, fails to ask truly difficult questions.

Public Choice Theory

A major area where this is obvious is public choice theory. Libertarians will cry “don’t use government healthcare! It will simply benefit special interests!” Meanwhile, Marxists will scratch their heads and instead argue that the problem is not public healthcare in and of itself, but the fact that under capitalism, asymmetries of wealth create (and reinforce) asymmetries of power, and those with the most money are able to corrupt public programs for their own gain.

Ultimately the question is: who is the source of corruption, the corrupter or corrupted? While no one can deny that hatred for feckless politicians is surely deserved, blaming them strikes me as not really addressing the problem. Why do we see continual corruption, across countries and across time? The ultimate source of the vested interest is, of course, the vested interest! Remove the interest and the problem disappears. Remove the politician and another will take their place (most likely selected by, funded by, or in cahoots with the interest). Remove the state and the already wealthy/powerful interest can simply take care of the problem itself.

I have also commented that libertarian analysis in this area stops short of the revelation that the same arguments can be applied to all aspects of the legal system, including the corruption of ‘force, fraud and theft.’ Once you put capitalism into your frame of reference, the problem becomes why exactly these violations of liberty, rights or what have you would emerge on such a large scale under a particular economic system (it begins with p).

Value

Libertarians – as well as other schools of thought – believe value is inherently subjective, perceived only in the eye of the beholder, and so forth. This is, in fact, what Marx thought of use-value:

A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference.

Of course subjective valuation is at the heart of consumption and other decisions. The difference is that Marx extended his analysis: he linked use-value to exchange-value and differentiated the two; he explored the relationship between use-value and the commodity; he defined the “social form” of wealth as separate to its use-value. Libertarians, on the other hand, being lazy, simply stopped at use-value, equated it to exchange-value, and built their entire theory around this single interpretation.

Capitalism/Human Nature

This is a big topic so I’m not going to claim to have explained both human nature and the history of capitalism in subsection of a post. What I will claim is that libertarians are almost certainly wrong.

The problem here is that they reason backwards from our current institutions and define all of history as either a diversion from, or tendency to, our current state. Humans were always greedy and selfish; it wasn’t until the various ‘unnatural’ barriers to trade were removed that this tendency was allowed to flourish. ‘Markets’ can be found throughout history, continually pushing at the barriers created around them; again, once they were unleashed, humanity developed. Here is Marx saying the same:

Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations – the relations of bourgeois production – are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any. There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society, which the economists try to pass off as natural, and as such, eternal.

Anyone who has taken history will know that they try to pound this tendency (ethnocentrism) out of you in your first classes. The fact is that western capitalism, like all of history, is a result of specific historical circumstances. Why was Britain one of the first to develop? It was surely in large part due to the resources, military and political power it gained from its empire; a similar argument can be made for the U.S. and its ‘treatment’ of the Native American people. As well as empire and slavery, there are other specific historical coincidences that might explain the rise of Europe. For example, there’s an argument to be made that the only reason the large supplies of silver extracted from Latin America did not obliterate Spain and Portugal in a sea of inflation was because China soaked up the demand with its introduction of the silver tax in 1581. Such arguments are, of course, up for debate. What is not up for debate is that historical context is irrelevant in discussing the rise of capitalism.

Similarly, while I do not subscribe to a strong version of historical materialism (personally I think it seems to lead to an infinite regression), there is obviously a lot of truth in the fact that people’s conditions determine how they behave. An English peasant would have had different beliefs and mannerisms to a member of the feudal class. More strikingly, certain sections of the Inuit refuse to say ‘thank you’ because it implies that you have done someone a favour, rather than simply your duty as a human being. Some civilisations used similar terms for ‘ripping someone off’ and ‘profit.’ Would we have the same attitude toward profit if we used the same word for it as ‘ripping off?’ Surely not.*

Expanding the scope of libertarianism to include property and capitalist relations – as well as their history – would start to raise some interesting questions, such as ‘why do we stop a poor person from eating by force?’ (try to take something from a shop without money and you’ll see what I mean). In fact, I expect a really critical look at capitalism from the perspective of individual freedom would simply collapse propertarian libertarianism into either Marxism, or, even more likely, anarchism (the latter being the true origin of the word ‘libertarian‘).

*These claims come from David Graeber’s Debt: The First 5000 Years.

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  1. #1 by jlitaker on December 22, 2012 - 5:57 pm

    Hello. Your post is provocative and engages, both directly and indirectly, a number of philosophical assumptions that I am convinced were poorly posed from the very beginning, e.g. the libertarian concept of individual freedom. (1) I wonder if a serious, critical evaluation and transformation of this particular concept would not itself necessitate, as a consequence, many of the changes you have suggested regarding value, “public choice”, and human nature? (2) You are correct about Marx’s claim that use value is subjective with respect to what he calls its “material side” but that he goes on to argue that it is both modified by the capitalist relations of production and falls back on or modifies these relations such that there is a dialectical relationship that holds between use value and exchange value (they are distinct but stand in a relation of reciprocal causation). Marx provides a succinct presentation of this in the Grundrisse (p. 881, the section titled “(1) Value”, http://www.marxists.org/archive/marx/works/1857/grundrisse/ch17.htm#value). You may also be interested in Hegel on this very point in the Philosophy of Right (Sections 190-195, the satisfaction of opinion). You note that libertarians stopped at use value, equated it with exchange value, and then built their entire theory around this identification. This strikes me as odd because I don’t see how that is possible (in particular, how possibly to demonstrate an absolute reduction of one to the other), however I confess a great ignorance concerning their use of this terminology. But perhaps you are referring to marginal utility? (If you hadn’t guessed, I have no formal education in economics). (3) I am interpreting your statement that you do not subscribe to a strong version of historical materialism to mean that you do not subscribe to a view that posits human activity as the effect of solely “external” determinations (a form of determinism). I hope I am not misrepresenting you here, but if I am correct I thought you might like to know that Marx also rejected (while providing a succinct and devastating critique) this form of materialism in the third thesis of his “Theses on Feuerbach”: “The materialist doctrine concerning the changing of circumstances and upbringing forgets that circumstances are changed by men and that it is essential to educate the educator himself. This doctrine must, therefore, divide society into two parts, one of which is superior to society [i.e. is not also a product of society, the educator]. The coincidence of the changing of circumstances and of human activity or self-changing can be conceived and rationally understood only as revolutionary practice.” I hope you find that of interest. In any case, thanks for the post. It was quite fruitful for me.

    • #2 by Unlearningecon on December 24, 2012 - 11:53 am

      Thanks for your post.

      You note that libertarians stopped at use value, equated it with exchange value, and then built their entire theory around this identification. This strikes me as odd because I don’t see how that is possible (in particular, how possibly to demonstrate an absolute reduction of one to the other),

      Well, I guess ultimately it comes from neoclassical economics, which originally sought to have measurable ‘utility’ that people gained from consuming goods. The ratios of utility would then translate into relative prices. Libertarian analysis has this kind of thinking at its heart, even though many of them would reject the idea that they believe in measurable utility.

      Thanks for that quote from Marx on materialism, pretty much exactly what I thought.

  2. #3 by Steve on December 22, 2012 - 6:36 pm

    Caps are for emphasis only.

    The whole problem with economics and economic theory is that it fails to actually reach the deepest level of philosophy. Its whole purpose is ONLY “this for that” when it should…and must, if it is to be a human discipline with a humane outcome, be based on the totality of human characteristics and PRIMARILY based….on what is BEST about humanity. The two reigning and opposing forces war over whether profit or employment should be the most Basic purpose. Neither of these is adequate. These are shallow abstract overlays of what Humanity actually is, and what they are positively capable of.

    Genuine human wisdom is the higher order level of thinking and acting which is needed to resolve the above inadequacy. The deepest and best ideas one can begin to base economics (and any of Humanity’s systems) upon are the distillations of that wisdom, namely Faith as in Confidence, Hope, Love and Grace. POLICIES ACTUALLY based on these IDEAS, NOT ABSTRACTIONS DERIVED FROM LESSER “philosophy” will enable the evolution of human systems so desperately needed.

    And just to answer the inevitable rejoinder of the less confident among us let me repeat that it will ENABLE that evolution…..not immediately transform every individual of course….but being on the deepest ideational and experiential level….will ACTUALLY CHANGE THE DIRECTION OF SOCIETY, AND THUS NOT INHIBIT THAT POSITIVE DIRECTION AS THE ABSTRACTIONS OF THE CURRENT SOCIETY ACTUALLY DO.

    • #4 by Steve on December 22, 2012 - 9:00 pm

      Monism is the higher reality. Dualism however, is no less important.

  3. #5 by y on December 22, 2012 - 8:09 pm

    It should be “libertarianism” rather than libertarianism.

    And private-propertarianism, as most of them don’t believe in public property.

  4. #6 by Aziz on December 22, 2012 - 8:36 pm

    No.

    When I was eighteen I experimented with Marxism, going so far as to hang around with people from a Marxist political party and attending some of their events. I only came to libertarianism when I was 22, after a period of total nihilistic disillusionment with politics and economics.

    I went my own way (and fell out with them) for two key reasons: first and foremost the overwhelming emphasis on the violent overthrow of the bourgeoisie (I think that we can say empirically that violent revolutionary thought tends to create violent and coercive authoritarian states, often much worse than the thing they replaced), and second the absurd teleology of strong historical materialism. Later through reading Hayek and Bastiat I developed an aversion to centralisation and centralised decision making altogether, and determined that private property is unavoidable because it is as conceptually basic as a caveman grabbing a piece of meat, running off with it and eating it.

    This makes the Marxist program antithetical to my libertarian positions today (although I basically agree with Marx about the inherent instability issue, however I think Schumpeter turned this around into something advantageous), but I would hardly say I am a “lazy Marxist”, having investigated Marxism itself quite thoroughly and discovering various irreconcilable problems.

    • #7 by Steve on December 22, 2012 - 8:59 pm

      Aziz,

      However, would you not agree that centralized administration of individual economic freedom via a direct payment to individuals….was still individual economic freedom? A does equal A after all.

    • #8 by Min on December 22, 2012 - 10:12 pm

      “private property is unavoidable because it is as conceptually basic as a caveman grabbing a piece of meat, running off with it and eating it.”

      What about private ownership of land?

      Thanks.

      • #9 by Aziz on December 22, 2012 - 11:05 pm

        Steve —

        Well, if we have to have a central bank I’d rather they conducted monetary policy direct to the public rather than the banks so that everyone gets a fair share and a fair chance. Similarly with central government, if we have to have one I’d rather that the money was spent in an individualised way rather than a centrally planned one for similar reasons. But in reality, central governments and banks today continue to make this impossible by favouring special interests. . But yes I suppose that if you could create a non-biased, non-captured, non-punitive, non-judgmental redistribution mechanism that would be consistent with individual economic freedom. But capture is the rule, not the exception, so there is no indication in the empirical record that this is very likely in the near future.

      • #10 by Steve on December 22, 2012 - 11:24 pm

        Aziz,

        Yes, in view of this tendency the dividend should be made a constitutional right of the citizen, and distributed by a body fire walled off from the political apparatus based on the difference between total incomes and total prices in a given period of time.

      • #11 by Aziz on December 22, 2012 - 11:10 pm

        Min —

        If you occupy and control something, you functionally own it. Communisation of Russia merely effected a transfer of wealth from the wider population to the Communist Party. The owners functionally just became the party elite and bureaucrats. The closest thing to real communism is the kibbutz system where communism is practiced locally and voluntarily.

    • #12 by Unlearningecon on December 24, 2012 - 12:07 pm

      No.

      :D

      second the absurd teleology of strong historical materialism.

      If you read jlitaker above you’ll see Marx had this exact same opinion.

      and determined that private property is unavoidable because it is as conceptually basic as a caveman grabbing a piece of meat, running off with it and eating it.

      No, this is possession. Private property and possession are different things. One is an often arbitrary legal claim which can usually be dated back to forced expropriation; the other is simply based on use-value/need. People would own things under socialism.

      Often critics of capitalism mostly use ‘private property’ to refer to private ownership of the means of production.

      As always, I must hit you with the ‘you aren’t really a libertarian’ point. Certainly not a standard libertarian, anyway.

      • #13 by Min on December 24, 2012 - 3:50 pm

        It used to be thought that primitive tribes had no concept of private property. Then it was discovered that people in such tribes did have private property, personal belongings that other people did not use or asked permission to use.

        Food is shared. A “caveman” who ran off with a piece of meat and ate it risked becoming an outcast.

      • #14 by Aziz on December 25, 2012 - 1:39 am

        Yeah, I guess I’m not really a libertarian as is generally defined in economics. Seeing as most libertarians including Austrians seem to believe that the real economy is an equilibrium with (effectively) perfect competition, and that rational expectations will always and necessarily mean that any stimulus will crowd out an equal amount of future private investment. This is total bullshit. Then again, a whole lot of left-leaning “socialists” (Oskar Lange, etc) bought into the Walrasian bullshit too.

        It is difficult to really differentiate between private property and possession. I guess the former is the legal calcification of the latter. I suppose it is important to not allow entrenched interests to abuse their power. At the same time, I do think that it’s critical to have some private property protections. From a Marxist perspective, it is argued that the ultimate means of production is labour, so surely a significant protection of private property is a legal framework to protect labourers from exploitation of their labour?

      • #15 by Steve on December 25, 2012 - 5:58 pm

        “From a Marxist perspective, it is argued that the ultimate means of production is labour, so surely a significant protection of private property is a legal framework to protect labourers from exploitation of their labour?”

        I quite agree. However, when technological innovation is replacing both the need for human effort (labor) and even the need for human input (employment) then does it not make sense to monetize technology as a factor in production, in fact THE factor in production, and distribute that money so as to enable our money based system….to function properly and relatively equitably?

      • #16 by Unlearningecon on December 29, 2012 - 3:04 pm

        As min says, property – like many things – is not binary and will always be somewhat arbitrary.

        I guess the difference is this: when it came down to it in a court of law, the question asked of property would be ‘who owns it based on the law?’ With possession, the question would be ‘who has a right to own it based on ethical questions/historical use?’

      • #17 by Min on December 25, 2012 - 2:03 am

        “It is difficult to really differentiate between private property and possession.”

        It seems to me that the key question is whether other people respect one’s right of possession and use. (Actually, I think that there is a continuum.) Is that too communitarian?

  5. #18 by Min on December 22, 2012 - 10:05 pm

    You might find this site interesting. http://scholarsandrogues.com/2012/12/13/libertarians-engineers-and-climate-disruption-denial-part-1-libertarians/

    On value, according to the research, libertarians value negative liberty over everything else. I suppose that is why they go no further there.

    ‘why do we stop a poor person from eating by force?’

    Interesting question for libertarians, eh? Shouldn’t the poor person have the freedom to stay alive, even if it means stealing food?

    • #19 by Steve on December 22, 2012 - 11:29 pm

      Fortunately, that question has already been answered by both Hugo’s Jean Valjean and monkeys….who exhibit more wisdom than (admitedly) a few libertarians I encountered.

    • #20 by Unlearningecon on December 24, 2012 - 12:29 pm

      Libertarians think ‘systemically and rationally’ based on a number of undiscussed premises, some of which are value judgments.

      One such is the distinction between positive and negative liberty, which collapses once you realise that poor people can’t eat due to the law (as blogger Matt Bruenig is fond of saying, poor people are poor because they don’t have enough monery).

  6. #21 by Joshua Wojnilower on December 22, 2012 - 11:36 pm

    Great discussion as always which brings important questions to mind. I think you hint at the ultimate question at the end, if not capitalism, then what? Attending an economics program led largely by libertarians, I can attest to the fact that many scholars who have taken “a really critical look at capitalism from the perspective of individual freedom” have turned to anarchism.

    While I can see how that view might lead to Marxism or anarchism, from a pragmatic perspective, it’s hard to envision the policy recommendations of those groups garnering much chance of effecting change currently. I’m still searching for my own answers to these questions, having switched sides a couple times, but these posts are good reminder to keep my mind open to the big picture.

    • #22 by Unlearningecon on December 24, 2012 - 12:14 pm

      I think you’ll find something of a disdain for technocratic policy discussions amongst Marxists, as they are generally done by elites. In fact Marxism can be quite reactionary in the way it puts down attempts at reform. Marxists and anarchists are most likely to want to achieve things ‘on the ground’ through political activism etc.

  7. #23 by Hedlund on December 23, 2012 - 6:00 am

    UE: Not related to this post, but if you are so inclined, you might be able to contribute to this. Mainstream micro seems a bit fresher in your mind than mine.

    • #24 by Hedlund on December 27, 2012 - 5:32 pm

      Hate to just use this space to keep pointing out stuff, but I’m not the tweetin’ type just yet.

      I see he’s in your blogroll, but Glasner’s latest bears remark regardless. The last three or so paragraphs in particular ring quite strongly of a Post Keynesian perspective (complete with the suggestion of macrofoundations for microeconomics), though thinking on it I don’t imagine he’s saying anything that would have been shocking to economists writing before the 70’s. The Carlaw & Lipsey paper he cites is also of interest.

      Also, slightly more on topic: Krul wrote a post in response to your comments. But maybe you saw it.

      Maybe this whole comment is unnecessary.

      • #25 by Unlearningecon on December 28, 2012 - 3:31 pm

        Not at all, thanks for the heads up. I’m including Krul’s post in my coming response to criticisms of Debunking Economics.

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