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Exposing Flaws in Libertarian Ideology: Aug 28, 2010

It is much easier to expose the flaws in ideologies by soliciting their views on real world problems. A recent article by Yves Smith (pseudonym) on nakedcapitalism.com asks a very good question which exposes the hollowness of most flavors of libertarianism. As many of you know, inspite of my agreement with some concepts that underlie libertarianism, I do not support that ideology because of its inadequacy at dealing with quirks of human behavior that sabotage its implementation.

What is the Proper Libertarian Response to Concentrated Corporate Power?

A question for readers: in many lines of commerce, large firms often enjoy significant cost and/or revenue advantages relative to smaller players. Over time, these industries tend to evolve to a format where many of the most successful enterprises are very large organizations. These firms typically wield considerable power relative to players smaller than they are, such as employees, suppliers, and customers, and often seek to influence governments. Moreover, many fields of enterprise have considerable barriers to entry, which further entrenches the position of powerful incumbents.

How do libertarians propose to respond to the power of large enterprises?

Feel free to comment- both on this blog and on the parent post.

  1. August 28, 2010 at 12:27 pm

    If the government ended all regulation and quietly killed itself in a bathtub, very quickly the big corporations would become de-facto governments and the anti-government types would quickly start wishing for the old days 😛

    Yes, libertarians are wishing for a return to feudalism, with ALL of them as the warlords.

    • Joe
      August 28, 2010 at 12:43 pm

      It looks like that’s already happened, but nobody’s officially admitted it. Goldman owns the treasury and can use frontrunning software that would get anyone else arrested. GE, General Dyanamics, L3 and friends are free to murder and plunder. The corporate media conglomerates would make George Orwell blush. Did I mention most of these companies pay little to no income taxes (GAO study.)
      —-

      Precisely, the fish rots from its head.

  2. A Equals A
    August 28, 2010 at 1:59 pm

    Two words actually: Creative Disruption.
    —-

    It is not ‘creative destruction’.. it is really ‘screwing over others and making a profit’.

    Shit is not Chocolate- even if you label it so.

    Google it.

    Capitalism (of the laissez-faire variety) is a dynamic system with no entrenched systems of priveledge, no cartels or monopolies can emerge under real capitalism due to constant competition and innovation.
    —–

    Ya sure, and each religion is the only path to salvation. Communism failed because of implementation.. keep repeating that shit.

    The internet is basically a big experiment in a totally free market. Witness how fast things change on the relatively unregulated, unemcumbered internet in comparison to the brick and mortar world. Witness how fast companies such as myspace (previous social media market leader) fall and other companies rise (facebook, current leader). Its a story thats played out and will play out over and over again.
    —-

    Yes, but that has more to do with the limitations of oligarchy than the success of the ‘free’ market.

    There “is” no safety. Nothing and no one is safe from disruption and innovation. Like I said in the other post consumers are sovereign under capitalism.
    —-

    I would like to hear you say that after those ‘other’ people make sausages out of our your kids and grandkids.

  3. Herbal Essence
    August 28, 2010 at 4:32 pm

    Greed and corruption are a human problem, not a government or corporate problem. Much corporate corruption is enabled by corrupt government. In a limited government situation, shitty companies would not have buddies in Congress and bought-and-sold federal regulators to protect them.

    Right now there are tons of companies which are actually anti-innovative and anti-competitive, and thrive on it because their pet politicians have written regulations and government contracts in their favor.

    Big business + big government = Cronyism that entrenches the status quo. Most of the most despotic and corrupt companies suck at the government teet like it’s going out of style, and have friends in government that protect their way of business.
    —-

    Agree!

    A more fluid free market, limited government, and lower would make shitty companies fail more quickly and innovative companies grow faster.

    I actually can’t believe that any man who correctly identifies the government’s misandry and female pedestalizing, would turn around and say everything’s hunky dory with another part of the government.
    —-

    A system with an elected and functional government is preferable to one without any accountability run for the exclusive profit of a few. I am aware that the US and many other western countries no longer have functional governments. What many people think of as ‘governance’ today are, in reality, conjobs perpetrated by short-sighed sociopaths.

    While the current system will not last for long, it is important that the system that replaces it is includes a functional elected government instead of total reliance on the ‘invisible hand of the market’.

    • Herbal Essence
      August 28, 2010 at 4:34 pm

      fourth paragraph should say “lower taxes” in there. Whoops.

    • Rebel with a clue
      August 29, 2010 at 9:30 am

      … short-sighed sociopaths.
      … functional elected government …

      1. The people at the top of all organizations, including the government tend to be sociopaths. If you have a workaround for that, I’m all ears. People don’t get elected by being straightforward, and that’s just a fact.

      Balance of power.

      2. Can you give an example of what a “functional government” looks like? It’s likely impossible at larger scales, because no government is smart enough to make good decisions for everyone.

      The US government between the mid 1930s-mid1980s is a good example of something that worked very well, though it was by no means perfect.

  4. August 28, 2010 at 7:26 pm

    That’s a point many people miss, capitalism is extremely anti-free market.

    While I have many libertarian opinions, I’m actually more of a minimalist politically. I think the government is at least 10x too big and that the Federal governement has usurpted the authority of local governments to the great detriment of Americans overall.

  5. Nestorius
    August 29, 2010 at 12:33 am

    The current system is an emporocracy “the rule of the merchants”. Companies are run by anonymous merchants. Anonymity is at the root of the problem: no one knows who run the company therefore no one can be held accountable.

    In older times, the power of merchants was limited to big cities. They were bourgeois (people of a bourg “town”). Merchants were known by their names, so instead of “Microsoft” you would have “Bill Gates”. Now, merchants have influence over whole countries. They have replaced the ancient aristocracy. At least in a feudal system, merchants did not have any of these powers.

  6. L'economy
    August 29, 2010 at 6:01 pm

    As a Libertarian, this is my general response:


    —-

    and here is my- …….

    In general, though, a monopoly can’t exist except by government decree, or some other show of force. Which is why, incidentally, I have a strong distrust of military contractors.

  7. sth_txs
    August 29, 2010 at 7:14 pm

    A reasonable question, but one has to go back to the countries beginnings and realize there was strong suspicion of corporations.

    Corporations are really creatures of the state. This nonsense of giving ‘personhood’ to a legal entity was a bad step and has only become worse with time.

  8. August 29, 2010 at 7:46 pm

    All ideologies are flawed because they represent an “ideal”, and any practical application will be flawed due to subjective bias. Not only that, but we have the current status quo to deal with.
    http://www.zeitgeistmovie.com is a great doc talking about the current empire of governments and corporations working together. The book “Confessions of an Economic Hitman” is a first hand account of a man working in the Govt/Corp machine and the attrocities he’s seen, including the bankrupting of 3rd world countries to steal national resources, CIA coups, assassinations, and financially sqeezing UN votes.
    At the heart of the partnership is the banks which, in 1913 (the beginning of western decline), they dealt a killing blow to true freedom when the Federal Reserve Act was enacted.

    • Awake
      August 29, 2010 at 8:20 pm

      Lots of things have led to Western decline, Roissy’s Four Sirens have done A LOT to throw western society off kilter.

      There are ways to get back on course but they involve reconfiguring society and developing technology that can circumvent the Four Sirens.

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