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The Oberlin Review

Libertarian Economics Crudely Misguided

Jordan Ecker, Contributing Writer

Jacob Britton’s “Wealth Distribution Fails to Invigorate Economy” is a five-paragraph rehashing of key libertarian talking points (The Oberlin Review, March 31, 2017). It may prove heuristically useful, then, to offer a step-by-step rebuttal of each argument to demonstrate the overwhelming inadequacy of libertarianism as a political philosophy.

Britton poses three questions: What justifies wealth redistribution, what would redistributed wealth look like and is wealth redistribution good for the economy?

Arguing on avenues paved by libertarian thinkers like Robert Nozick and Friedrich Hayek, Britton says that the state is justified in taxation only for the purpose of “essential government functions like national security and the justice system.” This implies that taxation for any purpose beyond the “essentials” is immoral and violent. Britton says any demand for state intervention in a democratic society to redistribute wealth is beyond the “essentials” and is “subjective” and “mob rule.”

This argument is nonsensical. Britton provides no criteria for distinguishing essential state activities from non-essential state activities. His two examples suggest that the state is justified only so long as it protects some set of individual rights. But can we imagine a consistent and worthy conception of individual rights that includes security from foreign invasion but does not include security from poverty?

If the question isn’t one of maximizing individual rights, but of minimizing violence, then Britton again fails: Violence is implicit in a capitalist economy where the worker is faced with the decision to accept a contract or starve. Coercion and violence always exist in capitalism. The state can work to minimize it or it can do nothing. In my view, one of those options is clearly more just than the other.

Britton’s next argument is that wealth distribution without a targeted goal of equality (e.g. the wealthiest have only 10 times as opposed to 100 times more than the poorest) is unprincipled. He says that without an explicit goal, we are left only with the implicit goal of “radical equality.” He seems to think radical equality is a bad thing, but offers no arguments for that view. I think radical equality is actually a fantastic political value, and if he wants to argue the opposite point, it would be at the very least entertaining to read his effort.

Britton next states that because we are a “supply-driven” economy, capitalist spending is better for the economy than working-class spending because capitalists invest with an eye to the “long-term.” Where to begin? Capitalists do not invest with an eye to the long term. The economy is neither clearly supply nor demand-driven: It is healthiest when demand is equal to supply, but sadly, as Karl Marx demonstrated and the latest 2008 crisis reminded us, capitalism cyclically causes demand and supply to fall out of sync with one another. Only democratic and deliberate intervention in the market maintains its functioning. Britton’s gloss of economics is so crude as to be comedic if it weren’t being used to justify the continuing domination of the many by the few.

Finally, Britton says expropriating the ruling class is not a viable strategy because the CEO of Walmart makes only $19 million a year, which redistributed to Walmart employees comes to only $9. Happily, the CEO is just a petit-bourgeois middle man. Marxists advocate for the expropriation of the capitalist, properly bourgeois class. In the case of Walmart, this is the Walton family, whose wealth cautious estimates peg at $149 billion. This comes out to about $70,952 for every Walmart worker worldwide. Sounds good to me!

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4 Comments

4 Responses to “Libertarian Economics Crudely Misguided”

  1. JV on April 7th, 2017 9:02 PM

    “Marxists advocate for the expropriation of the capitalist, properly bourgeois class”

    Yes, and you can look at Venezuela, Cuba, East Germany, or the USSR to see what happens next: universal poverty and totalitarian government. Reliably, every time Marxist ideas have been put into practice.

  2. Man with the Axe on April 9th, 2017 11:35 AM

    Take a step back from the theoretical and look at countries which have adopted your philosophy. How did that work out? Radical equality has been achieved in Venezuela. It works well in Cuba. It worked well in the Soviet Union. It worked well in Eastern Europe. It worked well in Cambodia under the Khmer Rouge.

    Meanwhile capitalism has raised billions of people out of grinding poverty for the first time in human history.

    Before you can take from the rich to give to the poor you have to create the wealth in the first place. It is this most banal of truths that causes radical equality to result in abject poverty for everyone. The bottom quintile of Americans live much, much better than did (or does) the ordinary person in any radical egalitarian society.

  3. Bob on April 9th, 2017 6:03 PM

    “can we imagine a consistent and worthy conception of individual rights that includes security from foreign invasion but does not include security from poverty?”: Sure we can. I can. And I think you can, too, since you mention “minimizing violence” in the next sentence.

    But then you conflate violence with “the decision to accept a contract or starve”. I see a big difference between shooting someone (violence) vs. not giving him free food. That’s not to excuse letting someone starve – not at all. But I just can’t see putting it on the same level as premeditated murder.

    I’m puzzled what alternative you would consider to be “violence-free”. You seem upset that someone would be expected to “accept a contract” (presumably to do work). What would you want society’s expectations to be? Should everyone get support even if they refuse to do work? Even Marx didn’t propose that (“from each according to his ability”). So if Marxism requires people to work, how is that less violent than capitalism’s expectation?

    Food isn’t free – it requires labor to grow, harvest and distribute. SOMEONE needs to do that. The requirement to work for food comes not from human cruelty but from the laws of physics. Someone who gets free food provided for him is being given an elite privilege that most people, by necessity, cannot enjoy. How is that fair to everyone else?

    I guess you could say that the natural world is committing violence against us by forcing us to work for food, but I don’t think any philosophy based on that would have any practical value in the real world.

    Now I know, you’ll probably amend your statement with “only the weak and disabled get free food.” OK, but now your objection isn’t that “the decision to accept a contract or starve” is violent, because you’re agreeing that some people should be expected to work. So where does that leave your argument against libertarianism?

  4. L.K. Samuels on April 11th, 2017 4:49 PM

    Well, guess who were also big proponents of re-distributing wealth. It was the German National Socialists (Nazis). As one German businessman wrote: “These Nazi radicals think of nothing except ‘distributing the wealth.” That same German businessman wrote that some business friends were “studying Marxist theories, so that they will have a better understanding of the present economic system.” This comes from Günter Reimann’s 1939 book–The Vampire Economy: Doing Business Under Fascism (p. 6 in 2014 edition). Reimann should know; he was a member of the Communist Party of Germany and had gone underground to fight the Nazis in Germany. The Nazis were extremely anti-capitalist and hated the business community. They imposed high taxation, forced companies to give Third Reich loans, and eventually nationalized over 500 companies in key industries. Moreover, Hitler gave a number of speeches supporting “social justice” (main one in 1920) and a “socially justice society.”

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Libertarian Economics Crudely Misguided