A Rant About Free Market AnCap/Libertarian/Austrian Groupies
There are about several different flavours of right-wing ideology in the 21st century. Take your pick: old, blue-haired conservative, neo-conservative, tea-party patriot, or (a bit harder to pin down) libertarian.
I would have added neo-liberal to the mix, but most would probably hem and haw over the particulars. Neo-liberals make up perhaps most of the Democratic Party. If you want to know the difference between neo-conservatives and neo-liberals, the answer is very little.
You have to hand it to right-wing thinkers. They really know how to reinvent themselves when coaxed. They have a knack for creating splinter groups when ideologies diverge. When things go wrong, and they are not haranguing about those evil leftists, they just pugnaciously scapegoat one another.
If they are from the First World, they would have had almost every need satiated via consumerism and told that it was the free-market which bestowed its godlike benevolence on “the” chosen ones, despite an overbearing, malevolent state. They probably never traveled much, never looked at or experienced some real poverty, and never worked or witnessed someone working a soul-crushing job while living in a cinderblock, dirt floor shack for peanuts. If a group of people share all these things in common, odds are they will find libertarianism (the right-wing version) very appealing.
In the US, libertarians are an odd strain of right-winger. They tend to be more socially liberal. After all, they constantly advertise they are advocates of individual rights and freedoms. But they have rather dubious economic ideas. They also vary in opinion when it comes to the government’s role in the market and whether we have a free-market already or not. These variations, I believe, only happen given a certain level of initiation. Young people who have found what’s all the rage among disenchanted 20-to-30 somethings are just diving in. They read a little Ayn Rand and Hayek, visit Reason.com, and look at some other free-market propaganda. They try to learn the lingo and talk-the-talk, walk-the-walk, but like Gene Wilder in Silver Streak, they generally make fools of themselves.
You see. The free-market is this magical place where Ayn Rand’s ideas come into full-bloom. Everyone gets a fair-shake and deals directly with individuals in voluntary exchanges. All human actions work in accordance with one’s own self-interest, without fuzzy things like empathy, compassion, biophilia, tradition, family, or anything else not related to avarice and self-love getting in the way. Everything is governed by the efficiency of the markets. If you have a grievance, it can be settled in a private court where court decisions can happen secretly without the public learning about any unnecessary or embarrassing details. Things like externalities, corporate monopolies, moral corruption, and fraud are completely invisible or just minor nuisances. If people do become victims of fraud, then they must have been parasites and deserved it. All that matters is converting your very essence into energy for trade, which is just a fancy and obtuse way of saying, “I did it for money.” In this free-market utopia, the state is a shadow of it former evil self. It serves the markets, not the people, ahem, mob. Without the state or some form of public organization which serves the public good, commerce, private property, incorporation, and contracts would not be possible, because these things would be unenforceable and, therefore, meaningless.
Speaking of lingo, you can identify this special group of right-winger with certain buzzwords and ideas: human action, self-determination, information symmetry, pricing mechanism, objectivism, free association, self-interest, voluntary exchange, freedom, government tyranny, state monopoly, the efficiency and absolute moral hegemony of the markets, monetary incentive, Hayek, Mises, Crapitalism, An-Cap, and Crony-Capitalism. They always make a priori statements about human behavior, markets, and government and then try to say, “I’m using the proper logic. You are not.” I took discrete math. I know what logic is. Mises himself said his musings on free-markets based on praxeology was a bunch of a priori assumptions not based on facts or experience, not science, even though he claimed it as such. Hayek, the scion of free-market orthodoxy, said that when it came to the social sciences, they could “never be verified or falsified by reference to facts.” It seems libertarians are entitled to their own set of terminology and epistemology in these discussions, but we, the hoi polloi, are not. Logic indeed!
When they apply what sounds like sophisticated jargon, they sound obtuse and self-absorbed. Indeed, it sounds like some child trying to sound introspective and wise to make up for being vain and shallow, like this kid here.
If someone has to resort to baby-talk (e.g. “I have the logic. You do not understand the markets.”) and condescension to express ideas, then they are not using logic or reason but something else.
I remember telling one in a Facebook thread the free-market was a myth. (After all, do not those in the Libertarian camp always complain about how we do not have free-markets?) One of them said it was just a way of describing a system, not an ideology. The free-market just meant markets operating with little government interference. Well, that was a new one on me.
Actually, I was already aware of that definition, but these people always respond in the usual manner like some cartoon evangelist from a Chick Tract preaching the Gospel to someone who was already Christian or living in a nation with a high percentage of Christians. Yes, I have heard the Free-market Gospel since I was a child. I found libertarian ideology very attractive (still do), and according to the Political Compass, I fall somewhere in the very far-left lower quadrant. I was once a believer, and just like most de-conversion stories you will hear from former Christians, I no longer believe and am now a skeptic. “But,” as they usually say, “it’s not an ideology. It’s logic and nature and good and….” If the free-market is just a natural system, then why do Libertarians claim we do not have free-markets? If it is just a description of a system, like socialism, communism, and capitalism, then why revise history to fit within a certain ideological framework; why redefine human nature to fit within a certain ideological framework; why all the think-tanks, such as the Mises and Cato Institute? Why invade people’s pages and blogs, frame everything that hints at collectivism as statist or tyranny, down-play fraud, pollution, unemployment and differential advantage, and refer to any form of government intervention as a form of violence and coercion?
They often talk big about free-markets allowing for greater self-determination. So I asked on the thread, “What if the free-market interferes with my right to self-determination (free will)?” In other words, what if something the free-market creates, for example defective products, fraud, and pollution which can cause harm, interferes with the ability to support myself? Another replied smugly, “The free-market interfering with your right to self-determination is like WhatsApp interfering with your right to communicate.” I guess he never heard of lead paint, leaded gasoline, mercury in milk, excitotoxins in food, or the Ford and Firestone debacle. But he is a Silicon Valley type where the motto is “We’re making the world a better place.” Yet the software industry had its share of blunders too, sometimes with disastrous results.
You point to fraud and abuse in the marketplace, and the libertarians say, “That’s not the free-market.” Absolutely mind-boggling! It is the same as the people saying, “We do not have true capitalism; we have crony-capitalism.” It’s like chasing unicorns. All this deregulation which started back in the ’70s apparently did not usher in the free-market. If the free-market does not exist in the present, then it might as well be a myth, which is exactly what it is. But back to the Facebook libertarian. He said the only way to guard against fraud was “information symmetry.” It is a “condition in which all relevant information is known to all parties involved. For example, in the stock market, stock information has a full public disclosure, and all investors are in the same position to share information.” You should already be aware of the problems with making a claim like this. Information symmetry is describing a state-of-being; it is not a process. In ideal conditions, both parties in a transaction are informed and are on equal terms; they have achieved information symmetry, but that is not reality. Fraud happens, because there is a lack of information between the two parties. People often deceive themselves into believing they are informed when in fact the opposite is true. Sometimes people intentionally try to deceive one another. There is a word for it, “lying.” There is no way of knowing, shy of being omniscient, what the other person is thinking or if fraud is afoot in a tightly closed off building while waiting for some business contract to be finalized.
I gave him Galt’s Gulch in Chile as an example. These were highly intelligent, wealthy businessmen and women who were taken for a ride by some guy named Ken Johnson and his associates. They all thought they had information symmetry. The only way these people could have been saved is if they could have had full disclosure from the very start, which would have defeated the purpose of defrauding them, possibly read the guy’s mind, or automatically assumed that any man who tries to recreate one of Ayn Rand’s fantasies in the Chilean desert according to the whims of pampered, rich people must be a con-man. After all, the Randian hero, Francisco d’Anconia did the exact same thing in Atlas Shrugged by building defective housing for Brazilian workers as a part of a government contract. I think I remember him blowing up the copper mine, when he went on strike. The Facebook libertarian replied that they obviously did not have information symmetry, and if they did, the fraud would not have taken place. So how does one achieve information symmetry? Education! And around and around on the free-market merry-go-round we go.
I finally gave up and said, “Well, if I am reading you right, you want markets to be freer but not too free as to prevent people from doing stupid things, such as eating Arsenic to look young and beautiful, using Radium to cure impotence, and selling Asthma cigarettes.” He replied that he had no problems with people selling poison water to each other openly.
More than a myth, the hierophants of the Free-market Gospel have established for themselves a cult. So if you really want to startle all the right-wing libertarians out of hiding from your thread or blog, just say, “The free-market is a myth,” and presto! No sooner said than done, all the little Austrians will come at you like a linebacker after insulting his mother, and they have the audacity to proclaim they are not a cult.
Arguing with an An-cap/Free Market/Austrian/Libertarian is migraine inducing. They tend to go around and around in circles using pretty words like self-determination, non-coercion and voluntary exchange, but when you try to get them to pin down exactly what this free-market paradise actually looks like, it starts to look more and more like a fantasy. It is a fantasy. It just takes a quick google search to prove this true. Look up snake-oil ads in the image section, and you will find ads for “Brain Salts,” tonics, potions, cigarettes which cure asthma, and on and on. Did you know that during the Atomic Age Radium was put in everything from suppositories to Hot Chocolate to face-powder? During the 19th to early 20th century, women ate Arsenic to look young and porcelain. Makes a great case for the FDA, no? “Well, that’s ancient history,” you might say.
In May 2000, the U.S. National Highway Traffic Safety Administration (NHTSA) contacted Ford and Firestone about the high incidence of tire failure on Ford Explorers, Mercury Mountaineers, and Mazda Navajos fitted with Firestone tires. Ford investigated and found that several models of 15-inch Firestone tires (ATX, ATX II, and Wilderness AT) had very high failure rates, especially those made at Firestone’s Decatur, Illinois plant. This was one of the leading factors to the closing of the Decatur plant. — https://en.wikipedia.org/wiki/Firestone_and_Ford_tire_controversy
Firestone and Ford tire debacle triggered a recall when a number of vehicles with faulty tires crashed at high-speed on the highway causing over 3,000 injuries and over 240 fatalities.
Let us not forget the recent 2008 mortgage, loan, and banking crisis. We did not just have regulators asleep at the switch. The banks and the credit rating agencies worked together packaging junk-bonds in mortgage-backed-securities and listed them as AAA. But that is not all. Banks defrauded plenty of their customers, preyed upon low-income households, loosened underwriting standards, sold their loan obligations to some other entity, lost contacts, and robo-signed on loans and contracts their customers never agreed to.
And about those efficient markets. About 40 percent of all food in the US goes uneaten. Privatizing the utilities yielded mixed results. “When local governments turn to private companies to manage vital utilities like water, energy, and public health, the poorest customers often lose. By law, private utilities can set their rates based directly on the cost of their investments, which means they can charge a lot, with little concern for how that impacts low-income consumers. Unlike public utilities, private utilities do not serve a constituency — they serve investors.” The people of Flint, Michigan and Detroit are suffering from privatization schemes which have turned their bustling metropolises into fetid hovels.
There is a really good paper which goes into depth on the history of privatization. It is called The Privatization of Everything by Betty Reid Mandell.
Shkreli, Randian boy-wonder and pharmaceutical entrepreneur, efficiently chose the fastest way to make his companies’ investors the most money in a short amount of time. He was the one who was famous for price gouging life-saving drugs raising the price of a single pill of Daraprim from $13.50 to $700. In December of last year in 2015, he was arrested for securities fraud.
Brooklyn U.S. Attorney Robert Capers said at a news conference that Shkreli “essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off defrauded investors in the prior company.” — http://www.reuters.com/article/us-usa-crime-shkreli-idUSKBN0U01IM20151217
Shkreli had a history working with hedge fund companies like Merrill Lynch and Lehman Brothers through his own company, Elea Capital. He like the others did some shenanigans which got him into trouble. “Barely 23, he was managing hedge fund Elea Capital in New York and lost it all in 2007. Around then, a trade with Lehman Brothers ended with a $2.3 million judgment against him, prosecutors said. In 2010, he lost his clients’ $3 million investment in his new fund, MSMB Capital.” He eventually opened shop again as MSMB Healthcare. His investors got nervous when they observed his companies operating like hedge-funds and not anything remotely related to healthcare. — http://www.bloomberg.com/features/2015-martin-shkreli-securities-fraud/
His case produced documents which revealed the inner workings and motivations of drug-company executives. They confirmed deep suspicions most Americans felt all along that drug companies were ingratiating themselves at the expense of the most vulnerable among us. “The documents show that these tactics are not limited to a few ‘bad apples,’ but are prominent throughout the industry.” — https://www.washingtonpost.com/news/wonk/wp/2016/02/02/how-pharma-bro-martin-shkreli-described-his-own-drug-price-hike-almost-all-of-it-is-profit/
Then there is “Crazy Eddie” Lampert. He was the well-known hedge fund manager, who pundits called the “Steve Jobs of the investment world,” the richest man in Connecticut, who used Ayn Rand as his compass and steered the Sears fleet straight into an iceberg.
And whatever happened to bitcoin? I seem to remember it was all the rage with Silicon Valley libertarian types. It was deemed a triumph of the free market over the state monopoly. After that tussle between the FBI and the Silk Road and the Ceo of Mt. Gox arrested for fraud, the buzzing has died down to chirping crickets. I guess unregulated markets are efficient when it comes to fraud and malfeasance.
Ooops! I guess the markets do not always protect us or ensure the greatest freedom or the greatest good.
What about this business concerning self-interest, monetary incentives, and individual motivation? Monetary incentives are good, if you want a person to operate like a machine and perform mechanistic drudgery, but it is a terrible motivator when it comes to jobs which require creative, cognitive ability. Individuals also do rather poorly when it comes to long-term planning. They will chose short-term gains almost every time over anything promised in the future. The polluted Animas, San Juan, and Colorado rivers from the leftover abandoned mines in Colorado are a testament to the shortsightedness of man. People are not always rational actors and are to an extent insane in their solitude.
“It’s … that they can’t tell when they are … (being rational), can’t will themselves to do so, and often think they’re being rational when they are not. As a result, there is a gap between the way our important institutions officially work and the way they really work, and this gap causes a great deal of harm.” — http://bigthink.com/Mind-Matters/human-irrationality-is-a-fact-not-a-fad
There is a very useful RSA video which elucidates just what motivates us.
Our true ability only seems to manifest itself when we collaborate and work together, rather than in constant competition. We are after all social creatures. We cannot live apart from each other. We cannot survive for very long on our own in the wild, either. Competition can be fun and character building but not when it is used to pit us against each other in a fight for supremacy or survival. We need a careful mix which appeals to both our collective and individual natures.
At this point, free-market libertarian ideology seems like one big con. So what is its staying power? Why is this pernicious philosophy still so appealing and intractable? I just recently heard a conman say that people who are already satisfied with their lives are hard to deceive. When the heart is in disarray, that is when rumours, conspiracies, and such become believable. People with surplus in their lives have a surplus in their hearts. That’s why the people the conman targets are the dissatisfied. Hearts filled with anxiety are the easiest to deceive. He went on to say, “You might think my plan in selling charms was to cause deterioration of human relations. But it is quite the opposite. Human relations were already deteriorating, and that is why everyone jumped on them… If something that is completely incomprehensible starts getting popular, doubt your generation. Consider that something might be very wrong. That’s because the generation has been enveloped by darkness (in other words, despair, emptiness, alienation, etc.).”
Times now are more tumultuous than ever with austerity, financial collapses, war, and news media awash with horror and death. In young people, anxiety has given way to cynicism and “looking out for number one.” This is at the heart of Randian philosophy. Small wonder we are still seeing young men and women still desperately clinging to this hazardous worldview.
Forgive my long rant. I hope you have found reading this epistle as liberating as it was for me writing it.
Edit:
Just recently, I had a fellow libertarian of the right-wing variety admonish me with a not so clever formula: Rand =/= Libertarian. I would have to agree with him. I hope he gave his clansmen the memo as well. Indeed, Rand has nothing to do with libertarianism. Not even American libertarians have anything to do with libertarianism in the traditional sense.
American libertarianism was invented as pro-corporate PR propaganda in the post-war period after WWII by Milton Friedman, his associates, and the newly formed think-tank FEE. It was and is as phony as the astro-turf movement the Tea Party.
They cannot seem to make up their minds as to whether they want complete anarchy or a minimalist state with anarchy and corporate rule mixed in somewhere. But I have found American libertarians who swear by Ayn Rand’s books and have very much co-opted her philosophy into theirs. There is an entire website called Galt’s Gulch Online completely devoted to talking about Randian and libertarian ideas.
Here is what Ayn Rand herself has said in 1971 about the American strain of libertarianism which should make crystal clear now and in the future their connection with the author:
For the record, I shall repeat what I have said many times before: I do not join or endorse any political group or movement. More specifically, I disapprove of, disagree with and have no connection with, the latest aberration of some conservatives, the so-called “hippies of the right,” who attempt to snare the younger or more careless ones of my readers by claiming simultaneously to be followers of my philosophy and advocates of anarchism. Anyone offering such a combination confesses his inability to understand either. Anarchism is the most irrational, anti-intellectual notion ever spun by the concrete-bound, context-dropping, whim-worshiping fringe of the collectivist movement, where it properly belongs. — “Brief Summary,” The Objectivist, Vol. 10, Sep. 1971
He went on to say other things. He denied that food waste is a problem or should I say not a problem within industry, ignoring agro-biz lobbies congress. He also seemed to suggest that because the US has an obesity problem, therefore, the US produces too much food and no body is being starved against their will. People choose not to eat and/or become malnourished, according to him. He later said my posts were not an indictment of the food industry, despite what problems may exist, and fed me the same article linking back to the source I used to make the claim about food waste in the first place!
He kept on going on and on about government this and government that, “We have the most regulated economy in the world. It’s all government’s fault. Government forces businesses to lobby because they are not free. Here! Watch this video on Netflix. It will explain everything.” My word! He took a deep drought of that Birch Friedman Free-Market kool-aid.
He also said that Venezuela would be lucky to have that problem, probably indicating it had some to do with socialism and not a problem with the elite in that country. The thing is Venezuela and its people were doing rather well during Chavez’s administration. The problem came once Chavez was gone and the price of oil plummeted. In fact, it was Venezuela’s addiction to oil which made the crisis worse. Even during the current crisis, the wealthy elite are not starving with the people. This video highlights just some of the problems and abuses inflicted on the Venezuelan people which the mainstream media is practically silent on.
The other stuff was just rubbish, such as his claims that deregulation is a myth. He was upset I trounced on his beliefs without making an argument against right-wing libertarianism just dismissing it. He seemed a bit confused. It is not my job to debate with him or give him reasons and evidence when he makes an insouciant plea or demand. He is the right-wing libertarian. The onus is on him to come up with evidence, defend his heroes and praxeology, not the other way around. Maybe if he took more heed in the title, the word “rant” should have given him a clue. I am not in the mood to debate with someone in a weird kind of cult.
