Posts tagged Foundation for Economic Education

I oppose civil rights acts because I support civil rights movements

Appearing this month in The Freeman (60.7, September 2010):

Opposing the Civil Rights Act Means Opposing Civil Rights? It Just Ain’t So!

Charles Johnson, September 2010 • Volume: 60 • Issue: 7

Just after winning his Republican primary in May, Rand Paul got himself into a political pickle over his views on property rights and the 1964 Civil Rights Act. Having reluctantly discussed concerns about antidiscrimination laws with the Louisville Courier-Journal and NPR, Paul made his now-notorious appearance on the Rachel Maddow Show, where Maddow grilled him for 15 minutes on whether he opposed government intervention to stop racial discrimination. After saying he favored overturning government-mandated discrimination, Paul finally admitted that he opposes Title II, which forbids private owners from discriminating in their own businesses.

As he told the Courier-Journal: I don’t like the idea of telling private business owners—I abhor racism; I think it’s a bad business decision to ever exclude anybody from your restaurant; but at the same time, I do believe in private ownership… .

Maddow responded: I think wanting to allow private businesses to discriminate on the basis of race, because of property rights, is an extreme view. Within a day Progressives were touting the interview as proof of a deep conflict between libertarian defenses of private property and struggles for racial equality. Meanwhile, compromising libertarians like Brink Lindsey reacted by discovering exceptions to libertarian principles—to make room, again, for federal antidiscrimination laws. The entire debate has played out as an argument over libertarianism and extremism, with Progressives and many nominal libertarians both condemning Rand Paul’s simplistic extremism about private property and libertarian rights.

I have little interest in defending Paul but it’s strange to treat him like some case study in the dangers of libertarian extremism. Rand Paul is a conservative, not a libertarian—let alone an extreme one. He’s said as much, in so many words, in repeated interviews. Now, you could simply say, He may be no libertarian, but never mind Rand Paul—what about the issue? Libertarianism opposes government control of private business decisions; taken to extremes, doesn’t that include laws against racist business practices—the civil rights movement’s crowning achievement?

Well, I do have something to say on behalf of extremism. Not on behalf of sacrificing the civil rights movement’s achievements to extreme stands on antistatist principle. Rather, extreme stands on antistatist principle show what the civil rights movement did right, and what it really achieved, without the aid of federal laws.

. . .

[I]f libertarianism has anything to teach about politics, it’s that politics goes beyond politicians; social problems demand social solutions. Discriminatory businesses should be free from legal retaliation—not insulated from the social and economic consequences of their bigotry. What consequences? Whatever consequences you want, so long as they’re peaceful—agitation, confrontation, boycotts, strikes, nonviolent protests.

So when Maddow asks, Should Woolworth’s lunch counters have been allowed to stay segregated? neither she nor Paul seemed to realize that her attempted coup de grace—invoking the sit-in movement’s student martyrs, facing down beatings to desegregate lunch counters—actually offers a perfect libertarian response to her own question.

Because, actually, Woolworth’s lunch counters weren’t desegregated by Title II. The sit-in movement did that. From the Montgomery Bus Boycott onward, the Freedom Movement had won victories, town by town, building movements, holding racist institutions socially and economically accountable. The sit-ins proved the real-world power of the strategy: In Greensboro, N.C., nonviolent sit-in protests drove Woolworth’s to abandon its whites-only policy by July 1960. The Nashville Student Movement, through three months of sit-ins and boycotts, convinced merchants to open all downtown lunch counters in May the same year. Creative protests and grassroots pressure campaigns across the South changed local cultures and dismantled private segregation without legal backing.

Should lunch counters have been allowed to stay segregated? No—but the question is how to disallow it. Bigoted businesses shouldn’t face threats of legal force for their racism. They should face a force much fiercer and more meaningful—the full force of voluntary social organization and a culture of equality. What’s to stop resegregation in a libertarian society? We are. Using the same social power that was dismantling Jim Crow years before legal desegregation.

I oppose civil rights acts because I support civil rights movements—because the forms of social protest they pioneered proved far more courageous, positive, and effective than the litigious quagmires and pale bureaucratic substitutes governments offer.

— Charles Johnson, The Freeman: Ideas on Liberty (September 2010): Opposing the Civil Rights Act Means Opposing Civil Rights? It Just Ain’t So!

You can read the whole thing at The Freeman Online, or in the forthcoming print issue.

Many thanks as always to Sheldon Richman and FEE.

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In a freed market, who will stop markets from running riot and doing crazy things? And who will stop the rich and powerful from running roughshod over everyone else?

Q. In a freed market, who will stop markets from running riot and doing crazy things? And who will stop the rich and powerful from running roughshod over everyone else?

A. We will.

Sheldon Richman put up a nice piece last week for The Goal Is Freedom called Regulation Red Herring: Why There’s No Such Thing as an Unregulated Market. (Incidentally, while you’re reading Sheldon’s piece, be sure to check out the illustrative photograph of the Federal Trade Commission building’s awesome allegorical statue of government restraining trade.)

Sheldon’s point, which is well-taken and important, is that if regulation is being used to mean making a process orderly, or regular, then what radical free-marketeers advocate is not a completely unregulated market. For something to even count as a market, it has to be orderly and regular enough for people to conduct their business and make their living in it and through it. Government interference only seems necessary to regulate a market, in the positive sense of the word regulate, if you think that the only way to get social order is by means of social control, and the only way for to get to harmonious social interactions is by having the government coerce people into working together with each other. But, as Sheldon argues:

Ludwig von Mises and F. A. Hayek pointed out years ago that the real issue regarding economic planning is not: To plan or not to plan? But rather: Who plans (centralized state officials or decentralized private individuals in the market)?

Likewise, the question is not: to regulate or not to regulate. It is, rather, who (or what) regulates?

All markets are regulated. In a free market we all know what would happen if someone charged, say, $100 per apple. He’d sell few apples because someone else would offer to sell them for less or, pending that, consumers would switch to alternative products. The market would not permit the seller to successfully charge $100.

Similarly, in a free market employers will not succeed in offering $1 an hour and workers will not succeed in demanding $20 an hour for a job that produces only $10 worth of output an hour. If they try, they will quickly see their mistake and learn.

And again, in a free market an employer who subjected his employees to perilous conditions without adequately compensating them to their satisfaction for the danger would lose them to competitors.

What regulates the conduct of these people? Market forces. (I keep specifying in a free market because in a state-regulated economy, market forces are diminished or suppressed.) Economically speaking, people cannot do whatever they want in a free market because other people are free to counteract them. Just because the government doesn’t stop a seller from charging $100 for an apple doesn’t mean he or she can get that amount. Market forces regulate the seller as strictly as any bureaucrat could—even more so, because a bureaucrat can be bribed. Whom would you have to bribe to be exempt from the law of supply and demand?

It is no matter of indifference whether state operatives or market forces do the regulating. Bureaucrats, who necessarily have limited knowledge and perverse incentives, regulate by threat of physical force. In contrast, market forces operate peacefully through millions of participants, each with intimate knowledge of his or her own personal circumstances, looking out for their own well-being. Bureaucratic regulation is likely to be irrelevant or inimical to what people in the market care about. Not so regulation by market forces.

If this is correct, there can be no unregulated, or unfettered, markets. We use those terms in referring to markets that are unregulated or unfettered by government. As long as we know what we mean, the expressions are unobjectionable.

But not everyone knows what we mean. Someone unfamiliar with the natural regularities of free markets can find the idea of an unregulated economy terrifying. So it behooves market advocates to be capable of articulately explaining the concept of spontaneous market order—that is, order (to use Adam Ferguson’s felicitous phrase) that is the product of human action but not human design. This is counterintuitive, so it takes some patience to explain it.

Order grows from market forces. But where do impersonal market forces come from? These are the result of the nature of human action. Individuals select ends and act to achieve them by adopting suitable means. Since means are scarce and ends are abundant, individuals economize in order to accomplish more rather than less. And they always seek to exchange lower values for higher values (as they see them) and never the other way around. In a world of scarcity tradeoffs are unavoidable, so one aims to trade up rather than down. The result of this and other features of human action and the world at large is what we call market forces. But really, it is just men and women acting rationally in the world.

— Sheldon Richman, The Goal Is Freedom (2009-06-05): Regulation Red Herring

That last point is awfully important. It’s convenient to talk about market forces, but you need to remember that remember that those market forces are not supernatural entities that act on people from the outside. Market forces are a conveniently abstracted way of talking about the systematic patterns that emerge from people’s economic choices. S if the question is, who will stop markets from running riot, the answer is: We will; by peacefully choosing what to buy and what not to buy, where to work and where not to work, what to accept and what not to accept, we inevitably shape and order the market that surrounds us. When we argue about whether or not government should intervene in the economy in order to regiment markets, the question is not whether markets should be made orderly and regular, but rather whether the process of ordering is in the hands of the people making the trade, or by unaccountable third parties; and whether the means of ordering are going to be consensual or coercive.

The one thing that I would want to add to Sheldon’s excellent point is that there are two ways in which we will do the regulating of our own economic affairs in a free society — because, as I have discussed here before, there are two different kinds of peaceful spontaneous orders in a self-regulating society. There is the sort of spontaneity that Sheldon focuses on — the unplanned but orderly coordination that emerges as a byproduct of ordinary people’s interactions. (This is spontaneity in the sense of achieving a goal without a prior blueprint for the goal.) But a self-regulating people can also engage in another kind of spontaneity — that is, achieving harmony and order through a conscious process of voluntary organizing and activism. (This is spontaneity in the sense of achieving a goal through means freely chosen, rather than through constraints imposed.) In a freed market, if someone in the market exploits workers or chisels costumers, if she produces things that are degrading or dangerous or uses methods that are environmentally destructive, it’s vital to remember that you do not have to just let the market take its course — because the market is not something outside of us; we are market forces. And so a freed market includes not only individual buyers and sellers, looking to increase a bottom line, but also our shared projects, when people choose to work together, by means of conscious but non-coercive activism, alongside, indeed as a part of, the undesigned forms of spontaneous self-organization that emerge. We are market forces, and the regulating in a self-regulating market is done not only by us equilibrating our prices and bids, but also by deliberately working to shift the equilibrium point, by means of conscious entrepreneurial action — and one thing that libertarian principles clearly imply, even though actually-existing libertarians may not stress it often enough, is that entrepreneurship includes social entrepreneurship, working to achieve non-monetary social goals.

So when self-regulating workers rely on themselves and not on the state, abusive or exploitative or irresponsible bosses can be checked or plain run out of the market, by the threat or the practice of strikes, of boycotts, of divestiture, and of competition — competition from humane and sustainable alternatives, promoted by means of Fair Trade certifications, social investing, or other positive pro-cott measures. As long as the means are voluntary, based on free association and dissociation, the right to organize, the right to quit, and the right to put your money where your mouth is, these are all part of a freed market, no less than apple-carts or corporations. When liberals or Progressives wonder who will check the power of the capitalists and the bureaucratic corporations, their answer is — a politically-appointed, even less accountable bureaucracy. The libertarian answer is — the power of the people, organized with our fellow workers into fighting unions, strikes and slow-downs, organized boycotts, and working to develop alternative institutions like union hiring halls, grassroots mutual aid associations, free clinics, or worker and consumer co-ops. In other words, if you want regulations that check destructive corporate power, that put a stop to abuse or exploitation or the trashing of the environment, don’t lobby—organize!

Where government regulators would take economic power out of the hands of the people, on the belief that social order only comes from social control, freed markets put economic power into the hands of the people, and they call on us to build a self-regulating order by means of free choice and grassroots organization. When I say that the libertarian Left is the real Left, I mean that, and it’s not because I’m revising the meaning of the term Left to suit my own predilections or some obsolete French seating chart. It’s because libertarianism, rightly understood, calls on the workers of the world to unite, and to solve the problems of social and economic regulation not by appealing to any external authority or privileged managerial planner, but rather by taking matters into their own hands and working together through grassroots community organizing to build the kind of world that we want to live in.

All power to the people!

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