Libertarian myths

I’ve blogged before about libertarian/free-market conservative political correctness——things that many freemarketeers embrace as an axiom, regardless of reality. For example, that eliminating capital gains taxes makes sense.
This Slate article on libertarian thinker Robert Nozick does an outstanding job, discussing how Nozick started by arguing against any regulation of business or the free market, before deciding that his position had been “seriously inadequate.”
The article pays particular attention to Nozick’s key argument that individuals have the right to benefit from their talent. Wilt Chamberlain (Nozick’s example) is a superior basketball player; he gets paid accordingly; by what logic should we penalize him, or any other successful person, for being superior?
The article points out that Nozick’s analysis assumes a number of things: That we can calculate the value of Chamberlain to his employers exactly, that both parties have equal negotiating power, and that nothing actually distorts the market to favor one side. And that all ways of earning wealth work with the same smooth efficiency.
Echidne of the Snakes tackles the same issue regarding the recent Wal-Mart discrimination case. One argument raised in support of Wal-Mart was that if the firm deliberately paid women less than men for equal work, it would just fire all the men and save money, so there can’t have been a pay gap. As Echidne points out, this is an idealized model ignoring things that can happen in the real world: Managers who assume, inaccurately, that women can’t do work as well as men (or that they don’t really need the money, because it’s men who support families) or customers who react negatively to women, blacks, etc. working with them.
Or consider Lily Ledbetter. Ledbetter discovered after 20 years working at Goodyear that the company paid her substantially less than men doing the same work. She sued; the Supreme Court ruled the statute of limitations started when she was hired, so too bad, so sad (the Lily Ledbetter Act resets the clock to the point at which a worker learns about the discrimination). The assumption that both sides have perfect knowledge——who’s hiring, who’s paying the most, who’s fair——is often a myth.
In short, the free market is not the perfectly efficient, rational instrument of libertarian fantasies. As witness that even executives who’ve run their companies into the ground get big bonuses and stock options (I’ve heard reasons ranging from “They need a morale boost” to “They did the best they could in a bad economy”——none of which ever apply to the rank and file).
Switching economic subjects, this article by Matthew Vadum claiming that efforts to encourage the poor to vote are “like handing out burglary tools to criminals. It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country.”
Surprisingly, he doesn’t mean the crooks and incompetents at Goldman Sachs, Lehman Brothers and countless other investment firms that helped bring down the economy (and thereby create a bunch more poor people). No, those are the good guys; it’s the poor who are the problem, because they’ll push for more welfare, which means taking money from the wealth producers who’ve earned it.
When called on it, Vadum insists that he’s not suggesting the poor should be denied their right to vote, only that we shouldn’t encourage them. Which, of course, makes equating the poor to criminals a rather odd metaphor (he doesn’t apologize for it). I’m inclined to see this as either classist (rich good, poor bad) or possibly a racist dog-whistle (given the longstanding right-wing association of being poor with black welfare queens——some relevant links here). As to the substance of his argument, I’d say people exercising their right to vote has nothing in common with committing a crime, regardless of their lack of wealth. And I don’t see the poor voting out of self-interest any more objectionable than when the rich do it.
Digby adds a take here.

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7 responses to “Libertarian myths

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