To describe this line of reasoning as selective would be a gross understatement. After all, let’s assume that labor unions are as evil as the RTW lobby says they are. Even granting that for the sake of argument, labor is not the only interest engaging in collective bargaining. What about the individuals involved in the employing corporation? Aren’t these businesses effectively “capital unions” exploiting incorporation laws to achieve a better bargaining position relative to labor? Isn’t the reason why investors pool their resources and form businesses to get better deals in the market through economies of scale? Isn’t that why they try to get investors rather than simply borrowing all the money for their start-up costs–to spread the risk and the reward?
So unions of labor are only one side of this story; to emphasize collusion on the workers’ side is to leave another form of collusion totally unaddressed. Corporations are capital unions, organizations whose members work together to negotiate wages and benefits (and other costs, of course) downwards to get the best return for themselves. Why is one form of collusion wrong and the other not?
I’d add that, in historical comparison to labor unions, corporations are much more fully creatures of the state. While labor unions have existed for much of their history in legally unrecognized forms, arising from the spontaneous organizing efforts of workers themselves, government-granted incorporation has always been a necessarily statist activity. There’s nothing free market about dictating to the market that corporations must be dealt with on their own, special terms. Conferring limited liability, entity status, and other privileges on corporations is intervention to skew the market, a crime that can only be laid at the feet of the state and the capitalists that run it.
I view this RTW movement as not only the argument that capital gets to deal with labor in a privileged manner, but also a defense of the entire balance of power between employers and employees. It’s about more than just authoritarianism and a system that favors capital over labor; it’s also about the legal codification of class distinctions inherent in the structure of production. To the extent capitalists decry so-called “class warfare,” I believe they are trying to gloss over the privileged terms on which they want to do business, allowing them to claim there are no classes of consequence while entrenching them further. That allows them to safely defer to the market, while ensuring it always delivers the balance of power they desire.
After all, if RTW folks truly believe that each and every worker deserves the right to negotiate individually with the capital union, why stop there? Why not also grant each and every shareholder, investor, creditor, and other owner of the corporate capital union the right to negotiate individually with the worker himself or his labor union? Why should both the worker and the owner be forced to deal with the extractive, exploitative management class as the exclusive agent of the corporation? If it’s unfair for the labor union to monopolize labor relative to a given employer, isn’t it equally unfair for the capital union to monopolize capital relative to a given employee?
The reason is that capital unions are politically and legally favored in labor negotiations, because they have always been favored. Our entire political economy is built around doing business on their terms. If you want a genuinely free market in labor, you can start by ridding yourself of the biased narratives that explain how collective barganing is virtuous and crucial for those with money, but unnecessary and evil for those who don’t.
]]>Greenwald invites us to consider a series of bills that enlist government in punishing corporations for views they express, money they donate to causes, etc. Some examples:
I agree with him that the above laws are unconstitutional. Government is prohibited from discriminating or giving unequal protection to the free speech rights of corporations as currently settled law stands (that was indeed one of the caveats he made). Indeed, Greenwald took pains to point out that even in the Citizens United case, not one Supreme Court justice questioned the legitimacy of corporate personhood at all (I addressed Greenwald’s commentary on this matter in more detail here). I also agree with him that The Nation’s Lee Fang takes an unprincipled, politically expedient position against corporate personhood – one cannot confine one’s critiques of the doctrine to only those cases where it acts against one’s sense of justice. Nobody wants to be allied with a hack like Fang less than I.
However, I do take issue with Greenwald’s notion that protecting corporate rights are constitutive to unbiased government. The imaginary laws he suggests are careful to target particularly contentious political issues that divide our nation. I assume his goal here is to show how Fang’s argument could be pressed into the service of a variety of illiberal ends. But why should we only consider narrowly moral issues in light of interventions by government? The examples ably illustrate the heaviness of the hand government uses to skew society to its political vision in general; no need to contain our outrage to only those narrow attempts at referreeing decorum and moral convention.
Indeed, the sole problem I have with Greenwald’s thesis is that it doesn’t go nearly far enough, constituting a blind spot for certain institutional arrangements he (and not simply the Supreme Court) considers beyond dispute. I would argue that the corporate form owes its very existence as a legitimate legal fiction to government intervention in the first place. Not only that, the intervention was designed to favor a certain view – in fact a political, even moral, opinion – of how business should be organized. This view is at least as arbitrary, moralistic and prejudicial as the imaginary laws he righly argues represent state overreach.
As far as I can tell (and I’d be happy to be corrected) Greenwald takes a thoroughly liberal view here that makes a distinction between rational, secular business matters and irrational, polemical moral and religious matters. I hold that this distinction is thoroughly false: government intervention to create and sustain corporate privilege is itself a moral intervention. For example, it has rigged our business environment to prefer capital over labor and business interests over civil interests. That is not just a technical legal matter for our society to work out rationally; rather, I’d argue it circumscribes a great deal of the inequality at the heart of our society’s decay.
I’d like to follow Greenwald’s lead by imagining the following laws:
In each of the above cases, I have not entirely made up the law as Greenwald did – these statements more or less describe the current legal environment. Corporations are created by government when people file paperwork and pay a fee. In return, the government grants them ownership over an entity they may govern. This entity confers on them limited liability for their actions, entity status that people are compelled to respect, and the privilege to abide by different standards than those applied to us flesh-and-blood humans. This is just the beginning of the story of how government intervenes through the corporate form to skew society towards an arrangement with moral and ethical consequences. Among other results, this artificially instituted and imbalanced playing field directly contributes to:
The idea that somehow the above situation is a technical, amoral, secular outcome that government is perfectly at liberty to pursue underlies Greenwald’s entire argument. It’s only when the issue at hand is abortion, or minority rights, or religion, or some other contentious topic on which the elite have not already reached consensus that government must look the other way.
The proper remedy to all of this (besides abolishing the state and privilege at large) is hold all people equal before the law – whether or not they are principals, managers, or shareholders in some contractually created, legally fictitious business entity. This must entail the end of all government favoritism, including that powerful subsidy embodied in corporate privilege. Nobody should be allowed to manipulate society through government force, neither for moral ends nor business advantage.
But more subtly and importantly, the line liberals draw between secular business matters and religious or moral matters is itself an arbitrary, self-serving reordering of society to their liking that underlies their statist politics. Every group with an agenda thinks theirs is different, but the liberal desire for technocratic, rational secularism is just as much a pre-rational value imposed on society as Christian fundamentalist theocracy would be. We could strike a blow for true equality – and accomplish a lot of “progressive” ends along the way – not by encouraging more government picking of winners and losers but by stopping the intervention that has already been going on for a century and a half.
]]>My interest today has more to do with Amazon.com’s booting of Wikileaks from their web services hosting. The Amazon Web Services statement explains the supposed motivations are not the result of Joe Lieberman’s bullying - the tone suggesting outrage that anybody would dare think Amazon.com would cave to such pressure. Instead, they provide two reasons for their decision:
Wikileaks’ supposed violation of their terms of service because they do not own the content they are publishing (even though the public pays for it)
the danger the unredacted material poses to certain individuals around the world (even though Wikileaks reached out to the government for help in identifying names to redact in the past and was rebuffed).
It’s merely a coincidence that Amazon found all these reasons to kick Wikileaks off their services right around the time it became politically convenient to do so. Also, pay no attention to the fact that another company providing software to Wikileaks pulled their support - only they acknowledged the role of government pressure. No smell there at all.
I expect a corporation to act in a spineless manner without regard to the larger issues of justice and accountability. After all, they are not designed to take any other matters into consideration but maximization of profits for shareholders. This makes them perfect collaborators in the conspiracy that is the state. However, what I find extremely grating is the way some libertarians trot out all manner of excuses to justify it. For example, there’s this post from Lew Rockwell that deifies the market as beyond reproach:
Back in my days in the conservative movement, I was always urged to boycott goods from communist countries. I never did. I don’t like boycotts. Commerce is a blessing. We need more of it.
You’re entitled to your own opinion - please read the rest of the post - but I find this position absolutely bizarre. Ostensibly, the colonists’ boycott of the East India Trading Company was a huge mistake; we should have resisted their monopoly by flooding them with money, I suppose! A boycott is not some extra-market construct that works against commerce; a boycott is a form of market activity. In order for a market to be free, it has to be just as valid to abstain from a purchase as it is to make it. Equally so, it has to be just as valid to coordinate demand among consenting parties (i.e. a boycott) as it is to coordinate the production of supply among willing business partners (i.e. a firm).
But Rockwell’s position goes beyond this, and it’s illustrative of a trend among libertarians to deify the market and turn it into something above and beyond the constituent people - a kind of disembodied platonic force for good that bends us to its will. The idea that any commerce whatsoever is a “blessing” elevates market economics to an unimpeachable position. The criterion ceases to be the free nature of this market, or that market’s meeting the needs of its individual participants - simply the fact that it’s called a market is enough to exempt it from scrutiny. Might as well call the market “God” and start praying for its blessings if we’re going to be that absolutist and irrational.
In fact, markets are not supernatural beings; they are a tool, a social construct people employ to efficiently allocate goods and services. As such, they operate within the constraints of a social context. But as wonderful they can be, there’s nothing inherently good, just, or laudable about markets qua markets. They can mediate supply and demand, but they can’t speak to what we ought to supply or demand. All kinds of examples of markets allocating goods and services of questionable validity can be found throughout history and in the present day.
What about the age-old markets for slaves? What about markets in endangered animals, or hitman services, or for that matter political influence? What about competitive bidding for cushy government contracts? What about the sale of tax collection privileges? These are all examples of markets doing their job: distributing information about supply and demand to consumers and producers within a given market, however desirable or moral. The fact that they involve various levels of thuggery and fraud doesn’t change their utility to those participating in them.
Of course, one could claim these markets are not free - that they violate rights in some way, and therefore they shouldn’t be treated the same as free markets. But my point is not to dictate the rules by which libertarians should accept or reject given markets. Simply understand that raw supply and demand, divorced from the social context, is no moral imperative, and particular rights are not necessarily required for commerce to function.
It suffices to say that we need more than merely efficient price signals to producers and consumers; a social context for justice and values. Of course, normally libertarianism has indeed been understood in terms more fundamental than its economic implications in isolation from other concerns. These fundamental terms provide guidance on the social context that can inform the execution of market economics in ways that promote human flourishing.
In order for markets to emerge that can reflect the values we cherish, we must articulate and enforce those values by not accepting the perversion of our markets by illegitimate actors by violent criminals such as the state. One of these perversions, I’d argue, is the corporate form, which grants privileges to certain legally recognized aggregations of capital and manpower. As legally chartered, these corporations must pursue the maximization of shareholder profit as their number one priority - other concerns, such as social justice, environmental quality, community health, etc. must be subordinated to sheer accumulation. It is a recipe for our current pragmatic political economy where we convince ourselves there is a realm of business that can be isolated from the imminently human struggle for peace and justice.
A great example of this artificial demarcation of amoral business territory is Stephan Kinsella’s assent to Rockwell’s post. Kinsella is a frequent defender of the corporate form so his position here does not surprise me. But his argument on Amazon’s victim status here only carries weight if you assume that the rules governing Amazon’s corporate behavior are valid rules in the first place:
Amazon’s managers have an obligation to the shareholders; they have no right to risk or waste shareholder money for political grandstanding. It’s not their money they would be risking. I also think that in addition to the anti-war libertarian activists who are up in arms about Amazon’s pursuit of profits instead of activism, a number of left-libertarians are using this as an excuse to pile on Amazon because it’s big, a corporation, and profitable.
Of course it’s not the management’s money with which to take moral stances as they please. But that’s kind of the point: the creation of huge economic bases in our society having no values to defend except endless accumulation is the reason for the spineless pragmatism evinced by Amazon’s decision. You could not concoct a more clever way to ensure that the economic engines of the country maintain allegiance and subservience to an agenda than by chartering these organization in such a narrow manner. Give them privileges like limited liability, personhood status, special tax rules, regulations that prevent entry by smaller competitors, etc. and they will keep their nose out of Daddy Government’s dirty business. There may be a different kind of capitalism possible, but we haven’t seen it yet.
Kinsella does argue that taxpayers do the same thing: by supporting the government’s crimes with our money, aren’t we complicit? That may be true, but at least in our case we are flesh and blood, rational, responsible human beings - not legally constructed and constrained, artificial systems designed for a single economic purpose. We can weigh moral matters, make compromises, and consider deeply our actions. We can be appealed to as moral actors, even if we don’t always exercise our responsibility to do so. Contrast this capacity for conscience with the corporate prerogative to subordinate the many nuanced concerns a healthy human society must address to the bottom line. Such an impersonal system could not assume duties unable to be accounted for in a ledger book even if it wanted to.
Also consider that this isn’t the first time that corporations have assisted the U.S. government in nefarious deeds, claiming to be victims powerless to resist their pressure. Remember all the telecom companies who helped the government secretly eavesdrop on Americans’ conversations? Is there some important difference between corporate behavior in these two cases? I’m not suggesting that spying on Americans is exactly the same as stifling Americans’ access to information necessary to hold their government accountable for serious wrongdoing. But in both cases, the familiar defense of “protect the shareholders at all costs” leads these government-created artificial constructs to take actions devoid of conscience. Again, humans do not always follow their conscience, but at least we have one - we have the potential to do the right thing, unlike corporations.
Furthermore, the pragmatic, “it’s just business” political economy that emerges from this corporate consensus encourages apathy and inattention to deep political issues on the part of individuals, who are impelled instead into a safe, comfortable, and distracting consumerism. It’s precisely because this economy is rigged to artificially benefit capital at the expense of working people that we are inclined to ignore far-off foreign policy matters as unimportant and accept mainstream, government-friendly constructions of political issues (which organizations like Wikileaks are barely able to challenge). The more we accept the premises of this system, the more it traps us in a sense of powerlessness. The key is to question these premises by rejecting corporatism as any sort of acceptable excuse to duck these tough political and moral realities, and to demand in the meantime that the humans running these government-chartered and -privileged fictions serve our interests rather than the government’s. Boycotts are one way to hit corporations where they can be hurt: the bottom line that provides the basis for their entire existence.
In the end, Amazon.com did the right thing for their shareholders. That’s the problem; a society composed of large, artificial actors pledged to serve narrowly defined interests divorced from the wider health of the human condition cannot build the kinds of markets that reinforce free and prosperous societies. Libertarians should concern themselves first and foremost with the pursuit of freedom and justice, with markets being a natural outgrowth of these core values. To do otherwise, as many market fundamentalists do, not only puts the cart before the horse; it strengthens our enemies and weakens the civil society for which we advocate.
]]>Caplan argues over and over in his article that certain left libertarian arguments do not make sense because, if you consider the issues from an economic point of view, everything balances out. In doing so, he glosses over a key difference between his approach and that of left libertarians generally; many of us find the typical libertarian reduction of all matters of justice, culture, etc. to economic calculation totally warped and inaccurate. More and more of us are rejecting a rigid market fundamentalism that seems to discount any issue that cannot be modeled economically. There’s more to human flourishing than marginal value.
For example, Caplan may be right that we effectively forego a fairer rental agreement with our landlord in exchange for lower rents. It’s certainly an elegant argument that provides a clean explanation for our entrance into supposedly free contracts with such little negotiating wiggle room for ourselves. Of course, for economists, it’s all about explaining within the constraints of the model - there’s no price one can place on human dignity, the social effects of systemically lopsided contracts, etc. A pure economic argument does not address whether justice is served, or why people place such a low priority on being treated fairly. It doesn’t attempt to back up the speculation on people’s motives for accepting skewed contracts with evidence; the mere assertion that our market system has mediated this contract is proof positive that it is fair and balanced, and so the only task left is to come up with explanations for why we chose such an arrangement.
As Kevin Carson always says, you can’t on the one hand agree with left libertarians that we do not have a free market and, on the other hand, defend institutions and economic arrangements in our present society on free market grounds without at least a bit more explanation than “revealed preference, so suck it”. But even beyond that, I’m not willing to say that a condition that can be modeled in a theoretic, genuine free market is necessarily desirable for that reason alone. Markets are just one tool in society’s belt, and those concerned with a voluntary, fair, sane world are somewhat naive if they think the struggle for justice and dignity has to be accounted for in a ledger book because, otherwise, it’s not worth pursuing.
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