Libertarian Lovefest

By William Easterly

The vision of seasteading is an urgent one. We can already see that existing political systems are straining to cope with the realities of the 21st century. We need to create the next generation of governance: banking systems to better handle the inevitable financial crises, medical regulations that protect people without retarding innovation, and democracies that ensure our representatives truly represent us.

Seasteaders believe that government shouldn’t be like the cell phone carrier industry, with few choices and high customer-lock-in. Instead, we envision a vibrant startup sector for government, with many small groups experimenting with innovative ideas as they compete to serve their citizens’ needs better.

Currently, it is very difficult to experiment with alternative social systems on a small scale; countries are so enormous that it is hard for an individual to make much difference. The world needs a place where those who wish to experiment with building new societies can go to test out their ideas. All land is already claimed — which makes the oceans humanity’s next frontier.

This really is quite cool. The idea of being able to set up individual societies around the world should be intriguing to everyone, regardless of your political or cultural persuasions. 

ourben:

I used the word “high,” simply replace it with adequate or whatever word you see fit.

How about I read the words you actually use?

You know perfectly well what my argument was. Libertarians do not abhor the “rights” of workers and clamor for subsistence level wages for laborers.

Why have you decorated the word rights?

You said yourself that wages were too high. How low should they be exactly? Where is the subsistence level when you’ve factored in all the new living costs that come with annihilating the public sector? Who are you to decide what subsistence is?

We believe that an unfettered market is the best way to achieve individual prosperity and rising wages (and, as a result, rising standards of living).

I largely agree with that. I also recognise the value of charity. I just don’t think there would be enough of it - until there is enough, government is a necessary evil.

1. Far-flung country? I was referring to Western Europe and America during the Industrial Revolution. Now, granted, markets were not completely free during this period, but it would be somewhat mischievous to assert that markets are more unrestrained today than they were during the early days of capitalism. There was a steady rise in real wage rates and an increase in prosperity. Investment per worker increased and productivity exploded, and as a result standards of living rose drastically. The poorest American today is leaps and bounds ahead of a Medieval aristocrat, wouldn’t you agree?

Everything you just said happened has nothing to do with anarcho-capitalism.

And no I wouldn’t agree. I’d agree that the poor today are relatively better off than the poor of yore. But aristocrats? GTFO.

2. Enriching the state through destruction does not increase prosperity or wealth. War is the destruction of wealth; it is necessarily detrimental to the standards of living of all participants. Most people take your position, however, which is why it has become popular to suggest that the Second World War made America rich and solved the Great Depression. 

I don’t know whether it solved the depression. I know a lot of the rest of the world was decimated though. To argue that had nothing to do with thriving post war US industry is frankly absurd.

Far more than a “feeble few” are against the Iron Law of Wages, my friend. The idea that all workers will be kept on the brink of survival through base wages is not only theoretically incorrect, as it discounts the effects of investment, productivity, and labor as an input, but also empirically disproved (see the Industrial Revolution again).

Oh fuck off.

I didn’t say all workers are kept on the brink of survival. Stop making shit up. We’re talking about low skilled entry level jobs. And in real life, where we are, the Industrial Revolution was as much a workers rights revolution. That’s why children don’t work in fucking mills any more.

Collective bargaining develops, competition for workers arises and increased marginal productivity allows more to be accomplished in less time. All of these trends lead to a rising standard of living.

And it happened without anarcho-capitalism.

In those Western societies that, at one time, embraced the [tenets] of free market capitalism, wages are indeed above subsistence levels (of course, one must take into account the disastrous effects of state-sponsored inflation and intervention).

That’s the money printers for you. They’ll dilute money regardless of regulation.

I am not in favor of lowering wages, I am in favor of removing barriers to entry into the labor market. I am arguing that by removing minimum wage, you are allowing more people to work at a price that they deem acceptable. This does not automatically infer a return to the 1500s.

I’m arguing that’s it’s not really that big a barrier to entry. FWIW there are actually lots of ways around minimum wage, at least in England there is. Just recently I was toying with the idea of an internship with a TV producer, my friend tried it and she was made to make cold calls for cash 12 hours a day.

It was an ad hominem fallacy, because instead of attacking my points in detail, you waved me off as a child of privilege and a mooch.

I wasn’t waving you off. Jesus…

The Karl Marx thing was a joke, because he was, largely, a wealthy dependent that never had to work, and yet he never espoused liberal capitalism.

Fair enough. Your jokes need work.

I am against price controls on consumer goods and anything else, and I am against intellectual property (it ignores the concept of scarcity and therefore is nothing more than monopoly creation).

Hallelujah!

In terms of unions, I have no problem with them.

Hallelujah!

Collective bargaining is a natural process that emerges in the market society. Similarly, I do not oppose the concept of child labor.

Huh…?

In a perfect world, it would be nice to suggest that no child should ever work, however I feel as though condemning a family to starvation through child labor laws is not necessarily more compassionate than keeping kids off the farm. 

I feel that taxing the well to do a little so 8 year olds don’t need to push mine carts is probably better.

When you attack my position by citing some sort of imaginary devotion to mathematics, I feel a need to correct you. Whether or not you find that significant is of no consequence to me. 

/facepalm

I work for minimum wage as well, but I suppose that is neither here nor there. To be quite honest, I do not doubt that wages would drop slightly. There would not, however, be a drastic reduction in the wages of those people currently working for minimum wage. Collective bargaining institutions are designed to acquire cost of living increases for their workers, and it would seem that this practice would continue. What’s more, the individual American worker is probably not going to accept a 50% cut in his/her wages. The workers are not powerless in this situation. Without capital (labor) inputs there can be no production. 

But there can be Mexicans.

Real wages have been rising constantly (this may have changed recently, I’m unsure) since the development of capitalism.

Real value wages controlled for household expenditures are not rising at all.

http://www.youtube.com/watch?v=akVL7QY0S8A

I’ve already addressed that elsewhere, but the idea that mechanization, population augmentation and increased productivity will lead to lower real wages seems untenable.

Oh right. So you’re saying that supply and demand laws apply to all products except labour then? 

I’m starting to ramble, so I’ll finish up. Firstly, who is forcing workers to accept low wages?

Low demand.

What institution exists (besides the state, of course) to ensure the oppression of the workers by their employers?

Unscrupulous employers.

Unionization and labor contracts are not governmental phenomena; they are natural outgrowths of the market society. 

Yeah I know. But not all workers are represented, not all industries are large enough, and in your ideal world with private policing - what’s the market force that prevents Thatcheristic union busting?

By the way, if I was on fire, I would very much like to be urinated on. Choosing the lesser of two evils is sometimes a necessary part of human existence.

Tax is the lesser evil.

I decorated the word “rights” because I do not believe that that term is necessarily appropriate in that context. Issues of standard of living and wage rates are not really rights issues, considering there is no inter-subjective framework under which “labor rights” can be adequately defined. Perhaps one could suggest that all workers have a right to enter into agreements with others, but that isn’t the definition most people subscribe to. Regardless, I feel as though moving this discussion away from rights theory and towards utility analysis is beneficial, at least to understand improvements in wage rates and standards of living. 

Quite frankly, I am no one to define what subsistence is. There is a basic consensus that the level of subsistence is the level at which survival is attained, however you bring up a good point in regards to the subjectivity of the concept. That is precisely why I am against price controls on labor. By creating a price floor, the government is designating a state-wide subsistence level; drawing a line in the sand (so to speak). I do not think it is possible to effectively determine the wage that every individual in society is willing to accept for their labor. Every human being has different wants and values, and as such must be allowed to determine the parameters of their own agreements with others. It may seem very odd to us that illegal immigrants are willing to work for almost nothing, but this simply means that what they are getting paid is more valuable to them than their unemployment. 

In regards to the new living costs that come with dismantling the public sector, you raise an interesting point. It could be argued that the absence of taxation would allow for a sizable increase in disposable income and savings, however it is true that much of Western society does not pay taxes. There is, however, truth in the notion that government intervention artificially increases costs through a suppression of competition. State-sponsored monopoly, credit expansion, corporate subsidies and protectionist trade policies all lead to higher real prices for consumers. I would argue that the destruction of this system will not burden workers with outrageous costs when all is said and done. 

To be honest, I agree with you. You will find that there are a great deal of libertarians out there. Some oppose immigration, some fiercely advocate intellectual property rights, some want to dismantle the state in an instant and some want to preserve the state in a weakened form. I recognize that a gradual move towards statelessness is preferable to an all out collapse of the system, for it allows people to become less reliant on government institutions and for new businesses and ventures to emerge. With that being said, it is important to note that the welfare state can be said to “crowd out” charitable giving. Generally speaking, when the government enters a sector of society, it pushes private individuals to the wayside. People are less inclined to donate to charity because there are government programs that do it for them. 

Again, you are not incorrect. Anarcho-capitalism, aside from a few experiments in medieval Iceland and possibly the American Old West (although that is a stretch) is at the moment an untested social system. I cannot cite any successes of anarcho-capitalism, for I have no examples to draw on. As a result, I am forced to find those instances which most closely align with my theories. Laissez-faire capitalist countries are as close as we can come to market anarchy. As I said earlier, the story of the Industrial Revolution is the story of rising standards of living, and it was characterized by individuals and firms operating in a relatively unrestrained market.

In terms of the aristocrat point, I seem to have erred just a little. I wrote that response up in lecture and did not properly reread my points. I meant to say that the poorest Americans are much better off then their medieval counterparts (that is, the extremely poor of pre-industrial Europe), and that many poor people now have access to luxuries that were unavailable to even the richest of aristocrats. Things like electricity, affordable and safe food and plumbing, for example. I apologize for my earlier mistake. 

In terms of WW2, it is very true that the United States government made quite a bit of money off of rebuilding and money lending, however this does not necessarily translate into economic prosperity. War did not create wealth or capital, it destroyed it. And while the American state may have made some money churning our bombers and tanks, the individual American was not necessarily better off because of it. If you are interested, Robert Higgs wrote an excellent article about the effects of World War 2 on the Great Depression and what eventually led to renewed economic growth. 

We were discussing the Iron Law of Wages, were we not? This economic law suggests that all workers will receive wages that allow them to survive and continue working, but that competition between them will ensure that real wages do not rise. Regardless, I would argue that even unskilled laborers saw their real wages rise because of investment and productivity advancement. The Industrial Revolution was a great many things, I do not discount that. Workers wanted more independence, higher wages and improved working conditions. For the most part, they got these things with minimal government interference. Workers are an integral capital input in the production process. They most certainly hold some sway over their entrepreneurial overlords. 

The argument that there are ways around minimum wage laws is a fair one, and it should be noted. That is why nothing can be held in absolute. Minimum wage laws, on the whole, increase unemployment through structural and institutional obstacles. That is not to say that some individuals will not risk breaking those laws, however the probability of someone working for a wage that is below the price floor is reduced significantly. I suppose that the market for immigrant labor in the United States is a good example of your point, as it demonstrates a critical failure in the ability of minimum wage laws to maintain a predetermined wage rate. 

In regards to child labor, you are assuming that there are actually people to tax, or that a state apparatus with the ability to effectively collect tax revenue actually exists. In reality, those countries where child labor is seen as necessary or acceptable are often characterized by stringent and crippling poverty; there is no wealth to redistribute. In cases like that, the choice between children not working and families starving becomes very, very real. We don’t have to worry about child labor in Canada or England, because even without these laws in place the practice would not resurface. 

As I said, I am unsure if the trend towards rising real wages is continuing (I seem to recall a chart that demonstrated that real wages have been decreasing recently, although I have been hard pressed to find it). My point was more in reference to that period of Western growth that was characterized by relatively free market capitalism. 

Not at all (in reference to the supply and demand thing), I’m saying that as capital accumulation and investment increase and out-pace population growth (which has historically been the case and is theoretically the case in capitalist societies), a general trend towards rising real wages tends to arise. This process can obviously be disrupted by a great number of factors, but there is no inherent tendency in capitalism that promotes decreasing wages. 

Could it not be argued that low demand is a result of state-backed barriers to entry into the labor market and increased costs associated with interventionism?

The issue of union persecution is an interesting one. It would seem that for a large part of history, unions were forbidden by employers that often had state backing in that regard (Thatcherism, as you called it). Currently, the opposite seems to be true, as unions have become powerful political entities that can influence public policy and rent-seek with even the biggest of businesses. I would argue that removing the state would level the playing field to a certain extent. Inherent in the idea of a union is the prevention of union-busting. That is, if enough workers agree to bargain collectively, the union can no longer be stagnated by the employer. In this regard, I would again mention that there exists a symbiotic relationship between employers and their employees. The dependence that exists in an interconnected market is not so one sided.

In regards to the fire example, taxation is a non sequitur. Pissing on me will extinguish the flames, but taxing me most certainly won’t. 

On a side note, this is a very enjoyable conversation. 

(via ourben-deactivated20111205-deac)