Understanding Truncated Free-Market Thought & General Delusions

Understanding Truncated Free-Market Thought & General Delusions

This is a response to an email received.

QUESTION:
Dear Peter,

I have been talking to libertarians about an RBE and get frustrated countering their narrow arguments. I have included some points brought up I would like help with, if you have time.

About resource abuse and exploitation, he says:
“If you own something, you want to maintain it in good condition. Private property means people will care about their property, including resources and employees… Those employee are also there voluntarily in a free market, so it is their choice.”

When I talk about poverty and imbalance, he says things like:
“People who give other more value in voluntary trades, end up with the most resources. Incompetent people quickly lose their resources to more competent people in efficient markets. This makes sure resources are used in an effective manner.”

or

“Capitalism tells us what kind of work is highly valuable. If you want to make money, study to do that kind of work. With internet, anyone can study almost anything. There are no excuses.”

When I talk about how the monetary-market preserves scarcity and hence more people suffer unnecessarily, he says:

“Scarcity is a fact if life. End of story”

How do you deal with these people?!
David

ANSWER:
David,

I feel ya.

I had an exchange with a libertarian/ancap a while back and after about 40 min of listening to this person talk, I was so irritated I spent the rest of the 2 hour conversation biting my tongue in anger given how offensive and self-serving he was in his ideology.

I can honestly say there is no economic philosophy more narcissistic and detached from reality than the Austrian/Chicago/Anarcho-Cap folks. It’s Adam Smith’s “invisible hand” on crack.

They see everything in theory, with little reality.

Overall, the central problem is this:
Everything they say is partially true but they defend the ideas as though they are empirical and universal.

I will quickly run down your noted quotes:

>”If you own something, you want to maintain it in good condition. Private property means people will care about their property, including resources and employees…

Regarding “If you own something, you want to maintain it in good condition.”

This is true because you don’t want to have to buy another one. Sure. But this argument only embraces a narrow fraction of market commerce as a system. (FYI, “system” is an idea the Austrians have a very, very hard time with!)

An “owner of a business” does not share the same value when it comes to employees or even land use for profit in many cases. It depends on the circumstance.

Unless an employee’s ability is so rare the owner has to keep them and pay them very well to do so (“maintaining in good condition”), the person is just another service to use and “cost efficiency” or saving money means they (the employer) will seek to pay as little as possible to the employee, disregarding his or her well being more often than not.

It is a dictatorship, not a partnership. Employees are coerced by the need for money to submit to this covert slavery. Given the unemployment crisis due to automation (also due to saving money), many people with PHDs are now currently under or unemployed in this world.

As far as land, as I mentioned, you could argue the owner of a home’s front yard wishes to take care of it, sure – one doesn’t want to have to pay to fix things.

But in the resource/business context, the shortsighted nature of use very often creates the condition of abuse. The owner of a forest plot to harvest lumber might very well have zero concern regarding what such action has on the ecosystem and environment in general and see the lumber as the only important issue in order to gain profit. Therefore, they are not “taking care” of anything in effect when it comes to what “taking care” means – as we have seen for decades with deforestation and the tragic loss of biodiversity globally.

As far as “Those employee are also there voluntarily in a free market, so it is their choice.”

Statements like this really piss me off.

It’s a good thing libertarianism didn’t exist in the same capacity during abject slavery as these people would likely be writing books about how the slaves must really like their servitude since they must have “chosen” to be African. This is truncated reductionist thought gone berserk.

Completely absent any sense of causality outside of the “snapshot” of the single market interaction. Again, they have no clue about systems theory, network interactions and chains of causality. Just like African slaves were put into a condition (system) that forced their labor by force, so is the pressure of the existence of the market economy itself, which forces all humans into submission in one form or another to survive.

I will debunk it this way:
A woman walks into a pawn shop. She puts a ring on the counter and the guy on the other side says he can offer only $500 for the exchange. She accepts and the exchange is made. No gun to anyone’s head, right? It’s “voluntary”!

This is all the Austrians would see. They call it “Praxeology” which is, like all of this, partially correct, but ignoring the systemic nature of causality in a complex social system and the pressures that emerge that influence behavior.

It turns out that the ring is her dead husband’s wedding ring. Her husband died a month before from a heart attack, unexpectedly. With two young children, she now has to find a way to get money to pay rent since her husband was the one gaining income before and she helped the kids. So, she had no other option to keep financially afloat but to sell a dear possession to a pawn shop.

Praxeologically, it is a “voluntary” exchange. But in reality is a last resort act of desperation and deeply unnecessary (!) if society had basic, non-market systems to support people on the structural level. The same goes for most women who fall into prostitution.

Now, if you say this to an Austrian, they would say something like “well, that’s why we have charity!” Well, if you (speaking to the Austrian) agree with the need for charity, which is non-market in the act of acquisition, then you are not a true believer in the “free-market” as a truly effective universal model now are you?

Also, a quick statistical assessment of polls on human labor satisfaction proves the vast majority do not like their jobs. A 2013 Gallup poll “found that only 13% of workers feel engaged by their jobs” worldwide. Hmm…why don’t they just leave? It’s voluntary right?

It’s painfully stupid. Moving on:

>”People who give other more value in voluntary trades, end up with the most resources. Incompetent people quickly lose their resources to more competent people in efficient markets. This makes sure resources are used in an effective manner.”<

Again, it is true in an isolated way. However, not everyone is equal in capacities and it is impossible in many cases to decide if a person has natural limitations (ie. low IQ) or is just “incompetent”. There is no black and white to the human condition. Everyone is different and my view is that every human being deserves to live a decent life without deprivation since it is technically possible and feasible. In this you also remove about 90% of crime by meeting human needs directly as well, as per the interests of TZM. (see the book to the stats)

A well meaning, hard working person might very well fail miserably… or maybe they do not have the cut-throat mentality or have an ethical disagreement with the way competition works in the market. There are many, many other variations than “incompetence” to justify a person’s lack of ability in the economic context and to think it is hence justified to remove people’s ability to have a quality standard of living because they don’t “fit” the model – is structural bigotry, pure and simple.

As far as:
>”Capitalism tells us what kind of work is highly valuable. If you want to make money, study to do that kind of work. With the internet, anyone can study almost anything. There are no excuses.”<

There are no excuses? What if you had a disease that made you quadriplegic or you had exposure to a toxic chemical that harmed your brain functions? Competition in the market is also about angling and hustling as much as it is about “working hard”. What if you can’t afford the Internet?

Once again, it assumes everyone is the same – an equal playing field – and has the same capacities in the arena of market competition. This isn’t so and it is deeply twisted to say the market itself should be the judge of people’s self-worth.

As far as:
“Scarcity is a fact of life. End of story!”

Last I checked the entire point of an economic system is to manage scarcity. However, declaring “scarcity is a fact of life” does not mean achieving abundance in terms of use (meaning there is substantially more than enough over time to meet the needs of everyone), is thus irrelevant.

I would hope that would be partly the goal of any economy from the standpoint of well being, right? The difference between the market system and an NLRBE is the focus. The market likes scarcity as it creates increased profits. It is a scarcity preserving system because if there was an abundance, the market would fail.

A NLRBE is hence not “scarcity focused” like the market. It is “abundance focused”. It sees abundance as a goal and hence real technical efficiency (non-market) is key, along with sustainability… as without sustainability principles being technically applied, abundance simply would not happen, by definition.

Anyway. That’s all I have time for. In the end, try to be patient, if you can.
~p