Posts tagged J.H. Huebert

Three notes for the critics of the critics of apologists for Wal-Mart

I’m a few weeks late to the party over Roderick’s Wal-Mart post. For various reasons; I’ve been meaning to write down these notes for a while, but other things have been grabbing my attention. But today seems like a good day to sit down and get to it, and in any case I expect that exactly the same old debate will be coming up some time in the next month or two, so I’d like this to be on record before the next go-around, because there are three arguments from the anti-anti-Wal-Mart side of things that I’m getting tired of reading, two of which I haven’t seen much in the way of substantive replies to, and all of which I’d like, if it is even remotely possible, to make some contribution towards killing dead.

Roderick complained about an article by Fazil Mihlar. Mihlar claims that Wal-Mart deserves both the Nobel Peace Prize and, in fact, sainthood. (I’m not sure that the Vatican has yet started canonizing corporations or other artificial persons. But never mind.) The reason he offers is that Wal-Mart does a lot of good in the world (providing jobs, making donations, making valued goods available at low prices), and that they are able to do that good because of entrepreneurial innovations and expertise in the market, especially the market for the inputs for their business.

Roderick pointed out, in reply, that this account left out a crucial factor: government interventions against the free market that benefit big retail business models, such as the seizure of land through eminent domain, corporate welfare, regulatory suppression of competitors, and government-subsidized infrastructure for long-distance transportation. Thus:

Both Wal-Mart’s critics and its defenders usually see it as an embodiment of the free market. But to me Wal-Mart looks like just one more special interest feeding at the taxpayers’ trough.

I’m opposed to Wal-Mart because I like the free market.

— Roderick Long, Austro-Athenian Empire (2009-03-31): Advocatus Diaboli

I think that’s straightforward enough. But it brought the usual complaints from the usual suspects. There’s a long and very interesting and sometimes illuminating discussion in the comments, which you should read if you haven’t already. But what I want to focus on now is a couple of counter-arguments, which have been repeatedly raised by critics of this line of criticism (notably J.H. Huebert and Stephan Kinsella) which I think involve serious economic errors and a healthy dose of special pleading.

Before I begin, though, let me say a couple of things. First, this post will have absolutely nothing to do with the question of whether or not Wal-Mart is a morally criminal enterprise of the sort discussed in Confiscation and the Homestead Principle, and hence it will have nothing to do with whether or not Wal-Mart enjoys legitimate private property rights over its land, stores, trucks, goods for sale, bank accounts, or anything else, and hence it will also have nothing to do with whether or not it’s O.K. for people to vandalize their stores, loot them, shoplift from them, expropriate their means of production, or otherwise get up in Wal-Mart’s grill. In fact almost nobody who’s been a party to this particular conversation so far (as opposed to some other, separate conversations about protest tactics and Macy’s) has been talking about this, except for a dialogue between Stephan Kinsella and an imaginary left-libertarian in his head. I have my own views on that (which are fairly uninteresting; in short, that there isn’t one answer for the whole corporation and that it depends on the case), but it’s not the issue at hand in Roderick’s article, and it’s not an issue I’ll be addressing here, either.

Second, this article will also have very little to do with whether or not Wal-Mart deserves the Nobel Peace Prize, or sainthood, or praise, or censure, or some mixture or combination of the two. The arguments that I’ll be discussing might feed into a larger discussion about how to parcel out praise and blame, but that’s not my concern here. My concern has specifically to do with the extent to which Wal-Mart ought to be regarded as an example of free-market entrepreneurial success. (That’s related to but distinct from the question of whether Wal-Mart ought to be praised or blamed or neither by free-marketeers. If you’re curious about that topic, this post will disappoint, but you might get something out of my exchange with Will Wilkinson in the post and comments at GT 2008-11-10: The ALLied invasion of Cato.)

With that cleared out of the way, here are the specific arguments that I do want to address.

  1. Why single out Wal-Mart? When left-libertarians point out that Wal-Mart benefits from certain aggressive government interventions, and suggest that this is a reason not to cite Wal-Mart’s bidniz practices as an example of the free market at work, we are constantly asked — with the utmost innocence, even though this has been addressed over and over again every single time it has come up, generally without any response — why we are singling out Wal-Mart for criticism, given that many other market actors also benefit from the same interventions, or from other similarly objectionable interventions. Thus, for example, when Sheldon Richman writes:

    It would be impossible to sort out which profits are legit and which are not. I don’t think that’s the point. The point is to stop the machinery that makes illegitimate profits possible. That’s the state and its various methods of privileging and burdening.

    Kinsella replies:

    Yes. We libertarians are of course against this. So why single out Walmart? By imprecise, lax standards, 99% of society is criminal/suspect. Where does that get us?

    Let me just repeat here the same damn thing that I have repeated every time this stupid question gets asked. There are two main reasons that Wal-Mart gets singled out here. The first reason is often because some conventionally pro-capitalist libertarian brought Wal-Mart up as an example of the free market in action. Since Mihlar brings Wal-Mart up as an example of free market success, then it would be bizarre for Roderick not to have mentioned Wal-Mart in his reply; if we are informed that Wal-Mart ought to be praised because of a characteristic X that it possesses, but it turns out that Wal-Mart does not actually possess characteristic X, then the responsible thing to do is to discuss some specifics about Wal-Mart (not every other market actor toiling in this unfree market of ours) in order to demonstrate that it hasn’t got X. This is, in fact, what actually happened in the exchange that Kinsella was supposedly commenting on.

    The second reason why Wal-Mart often comes up is because Wal-Mart is a convenient example of something broader that they want to discuss — for example, the specific system of state interventions that tends to privilege big box retailers, as a group, at the expense of alternative channels of distribution, and of alternative uses of land more broadly. Of course, Wal-Mart is not the only retailer that benefits from eminent domain seizures, or from government-subsidized infrastructure for long-distance shipping, or from corporate welfare packages in the name of development. So does Target; so does Best Buy; so does Barnes and Noble; and on, and on, down the line, for just about any strip mall chain store you could think of. But Wal-Mart is a convenient example of the broader trend, because of its unique size, scope, and name recognition. If I intend to talk about a certain kind of business model and its relationship with state power, then I hardly think it’s unfair to pick a specific example to talk about, and leave the extension of the analysis as an exercise for the reader. And I hardly think it’s weird or wrong to pick the most prominent and largest example of that particular business model as my specific example. When I write about bad things that the city government in Las Vegas does — for example, its fierce devotion to police brutality, economic cleansing, and using eminent domain to ensure that land gets used the way the tourism and convention industry wants it used, rather than the way that its owners do — I often go beyond simply reporting on local events, and I draw quite broad conclusions about government in general, or city governments in particular, but even then, I don’t feel compelled to mention, in the same breath, every other large city government in the world that does similarly awful things. It’s not picking on Las Vegas, or singling it out, to focus in on it as an example for the sake of discussion. And it is sheer bluster to go on accusing critics of apologists for Wal-Mart of singling out Wal-Mart when they have explained over, and over, and over again why we are mentioning it as an example of broader trends.

  2. Who are Wal-Mart’s competitors? This is, actually, somewhat related to the earlier question, but the issue goes deeper. When Roderick and others (Kevin Carson, especially) point out that the success of Wal-Mart’s business model depends heavily on Wal-Mart’s capacity to convince city governments to grant them corporate welfare giveaways and steal land on their behalf, or on Wal-Mart’s having access to a large network of reliable interstate roads available at a low marginal cost, which are funded in a way that heavily subsidizes those who use them for high-volume cross-country heavy trucking (which is, after all, exactly what folks like Mihlar are referring to when they extol Wal-Mart’s genious at transportation, distribution, and logistics) it is often replied that Wal-Mart is just making better use of available resources than its competitors; that these resources are available not only to Wal-Mart but to its competitors as well, and that, therefore, Wal-Mart’s advantages over its competitors must be the result of something other than the availability of those resources — must, that is, be the result of greater acumen at serving its customers needs. Thus, it is argued, even though Wal-Mart depends on coercively-funded government resources for its current business model, they would (it is argued) have the same advantages (whatever those may be) that make them successful, in this an unfree market, even after the transformation of the market into a free market. Or, at the very least, they oughtn’t to be blamed for being able to successfully make use of those advantages under the present circumstances. Thus, for example, J.H. Huebert in an earlier reply to Roderick:

    We are still not sure why Long believes big businesses, and Wal-Mart in particular, disproportionately benefit from the existence of government roads. No one disapproves of government roads more than we do, but the roads are there for anyone to use — the would-be competitor has just as much access to them as Wal-Mart does. Where is the unfair advantage?

    And again in the comments on Roderick’s more recent post

    How does the existence of government roads hamstring Wal-Mart’s competitors? Anyone can use the roads.

    And Stephan Kinsella, in the same thread:

    Why do the subsidies help Walmart more than local mom and pop competitors? They all get goods shipped from far away

    The main problem with this kind of response is that it betrays a curious sort of anti-economic blind spot about just who Wal-Mart’s competitors are. It is true that, if we lookonly at the other actually-existing businesses that provide substitute goods and services — K-Mart, Target, Home Depot, and other big box retailers, or, expanding outward, smaller, non-chain retailers trying to sell some subset of the goods that Wal-Mart sells — then it is clear that those sorts of competitors do have access to the same kind of government privileges that Wal-Mart does; Wal-Mart just has succeeded more than they have at exploiting those privileges in such a way as to offer the goods most in demand and to offer them at lower prices. Fine. But of course, those aren’t all the competitors that Wal-Mart has — not if you consider the competitors for Wal-Mart’s inputs as well as the competitors for Wal-Mart’s outputs. In conversations like these, it is typical for conventionally pro-capitalist libertarians to act as if the business under discussion were only competing with other large chains in its sector — as if we were just picking on Wal-Mart because they’re an easy target, and rooting for Target instead — or as if it were only competing with retailers more broadly. But it’s not. The market does not just consist of passive consumers and a handful of formalized joint-stock companies. The market is a big and messy place, and whatever you might say about the ways that Wal-Mart gains advantages over other businesses that do basically what Wal-Mart does, it is certainly clear that Wal-Mart’s advantages over competing uses of the land, labor, and infrastructure that are currently devoted to serving its business model.

    Thus, for example, Wal-Mart currently enjoys preferential access to long, straight stretches of land that it needs to ship its goods in trucks. Preferential access compared to whom? Well, not to Best Buy or Mom & Pop’s; they both can get things shipped along the same stretch. That much is seen. But what is not seen is that they — Wal-Mart, and other retailers as well — do have preferential access to those resources when compared the people who used to have, or might have had, homes, farms, parks, small businesses, car-only roads, or any number of other competitive uses of the land, which would have won out if the question were decided by homesteading and voluntary exchange, rather than by tax-funded acquisitions, government land grants, and eminent domain theft. Similarly, other big retailers also typically get at least some of the same government privileges in corporate welfare giveaways and eminent domain seizures in the name of development. Thus, Wal-Mart may not have much advantage over, say, Target, or other fellow big chain retailers, when it come to this kind of government boodle. But those who were using, or would otherwise have used, the money or the land that the government seized, for purposes that government’s don’t count as development, since they don’t increase property or sales tax revenue — keeping up their own homes, growing their own food, running down-market or informal-sector businesses, street-corner hustling, and the like — those people are also would-be competitors for the use of the land, money, or other resources that Wal-Mart is having the government seize and redistribute by force. And those competitors certainly are hamstrung by the government’s redistribution of money, or its expropriation of land. We know that they are because the government is seizing it by force, and people were using it for other things, and would continue to use it for other things unless they were paid more than Wal-Mart and other development beneficiaries pay for it in the forced sale. That is, after all, the point of eminent domain.

    The problem here is that when you fetishize competition as the struggle between similar businesses to provide substitute goods or services, and forget about the other forms of competition for scarce resources that are at issue — often uses by individual property-owners, often uses of the property that may be heavily tied up in local communities and in the informal sector, and may be governed by incentives different from those faced by large, formalized, for-profit corporations — it will, no doubt, seem incomprehensible that someone would focus on how Wal-Mart uses the roads that anyone can use. Because the real nature of the problem is the fact that resources that are currently devoted to those roads cannot be used for what they would be used for in a freed market, which results in a big splash and some major ripples in the market distorted by that particular rock. Not because Wal-Mart alone benefits at the expense of K-Mart or Target, but rather because Wal-Mart, K-Mart, Target, and all the other big-box chain retailers — and, to a lesser extent, also locally-owned, small retailers — all benefit at the expense of somebody other than retailers, and at the expense of uses for land other than the servicing of retail sales, when the government uses force to seize long, straight strips of land, to build and maintain big highways on it, and to open up those roads, mostly without tolls and mostly without price discrimination, to anyone who cares to use it, regardless of what the marginal cost of the use may be. If those big highways weren’t being laid down according to political considerations and development politics, and if they weren’t being heavily subsidized by coercively-seized taxes, the land might well (would probably) be used for something quite other than a large, subsidized national shipping network; and if so, those who intend to go into retail, especially those who want to go into the retailing of goods from an international network of bargain-basement suppliers, might well lose a lot of the comparative advantage that the sword of the State currently grants them over other, non-retail uses of the same scarce resources. It’s not that Wal-Mart is special here among retailers, in anything other than degree; it’s that Wal-Mart is one prominent example of a larger dynamic — the way in which State coercion, State expropriation, and State redistribution sucks scarce resources out of one sector of the economy and spits them out into another — forcibly redirecting them towards large, centralized, formal-sector cash businesses, and away from other, smaller, more localized, more informal, or less commercial uses of the resources (like housing, open space, small farming, cottage industry, local nightclubs, and other typical victims of the Development machine). The reason that Wal-Mart is not a good example of free market dynamics is not because it somehow owes its advantages over Target to government intervention, but rather because Wal-Mart, Target, and the rest of the big retailers all owe their advantages over every other competing use of resources to the heavy hand of government. The result of removing those coercive advantages probably wouldn’t be to hurt Wal-Mart in particular in its competition with Target; but it would remove a mighty big subsidy that Wal-Mart, Target, and all the other big box retailers enjoy over alternative, non-retail uses of the same property. Which might just make for some changes in how our cities look, and in how we get around and make our livings in them.

  • Diamonds, water, and roads: Finally, when Kinsella and Huebert try to exonerate Wal-Mart from blame for the government interventions that it exploits, they often fall back on an argument that it has just made the best entrepreneurial use of a situation that it found but did not create, and in order to support that claim, they have often portrayed Wal-Mart’s relationship with the state as being quite different from what it actually is. Thus, on roads, J.H. Huebert puts it in the most starkly silly terms here:

    Kevin Carson writes: Wal-Mart’s business model is heavily reliant on susidized roads. It supplanted competitors which had local supply chains.

    Yes, but Wal-Mart found the roads there, it didn’t create them, and it used them better than its competitors to serve consumers.

    The funny thing about this kind of argument is watching an Austrian economist suddenly forget everything that he ever knew about marginal analysis, in order to paint a picture of Wal-Mart just bumbling along until — by George! — it finds a road out in the wilderness (perhaps by tripping over it), and thinks why, I might just be able to use this to efficiently serve consumers! Of course, if we are talking about the whole entire Interstate Highway System, then it is true that Wal-Mart did not play much of a role in creating that, and doesn’t play much of a role in the political process that maintains it. It was created largely at the behest of the military-industrial complex and the construction-pork-barrel complex, back in 1956, when Sam Walton was still running a local Ben Franklin franchise. And the political support for it hardly depends on Wal-Mart; the notion that the federal government shouldn’t be involved in seizing land and seizing taxes for the purpose of a huge network of toll-free interstate highways is so far outside the horizons of acceptable dissent in D.C. that nobody would need to lobby against that. So, yes, fine, in that sense Wal-Mart is benefiting from the situation at competitors’ expense (for the reasons I mentioned above), but it did not create the situation that it benefits from; it just got better than some other similar companies at dealing with it.

    But, of course, if you want to do a serious economic analysis of Wal-Mart’s business model, what you really need to know about is not the whole stock of its inputs. What you really need to know about is the marginal units of its inputs. And if we are going to talk about the highway system that services Wal-Mart, we need to look not only at Wal-Mart’s relationship to system of government roads as a whole, but also Wal-Mart’s relationship to the specific stretches of highway that Wal-Mart uses.

    And when we look at it that way, we’ll find that Wal-Mart is heavily involved in every sort of lobbying in order to get various levels of government involved in subsidizing its access to that. Just about every time Wal-Mart decides to build a new store, or especially a new distribution center, they turn to local governments to demand that they grab some money out of working folks’ pockets and put it towards building up business park infrastructure and highway interchanges, or widening or extending some existing stretch of road to service Wal-Mart’s trucking needs, or simply to build a new spur out to service nothing but the distribution center. (A few examples gleaned from a few minutes on Google: 1, 2, 3, 4, 5, 6, 7, 8.) Wal-Mart solicits and actively lobbies for this sort of thing all the time so that they can improve the marginal benefits they get from the road network, while being able to pass along the marginal cost to taxpayers and to those who would have made alternative uses of the land, capital and labor involved.

    So how far is Wal-Mart merely taking advantage of a situation that it did not create, and how far is it actively collaborating in, and pushing for, wider and more intense aggression by the state against private property owners, when it comes to roads? Well, it depends on what you look at. The problem is that those who have wanted to defend Wal-Mart have done so based on lazy arguments based on Wal-Mart’s relationship to the existence of the interstate highway system as a continent-spanning whole. Once you actually look at the construction and improvement of new stretches of road on the margin — which is, remember, what’s important for understanding how far Wal-Mart’s bidniz model does or does not depend on successfully wielding the sword of the State, since it is only on the margin that they are making all of their decisions, counting all their costs, and reaping all of their profits — it becomes clear that Wal-Mart is not just finding the roads there as some sort of given; it went to the government and got the roads it uses put there, typically by force and typically at the expense of unwilling third parties.

If you want to try and defend Wal-Mart, or its apologists, against their left-libertarian critics, fine, let’s talk about that. But please try to find some arguments other than these.

Hope this helps.

See also:

Left-Libertarian Engagement

  • Lew Rockwell’s recent interview of Naomi Wolf for his podcast — the scare quotes are there because it quickly turns into a very two-sided conversation, and works very differently from a conventional interview — is really remarkable, and a paradigm for the kind of engagement that could build a vibrant libertarian Left. Naomi Wolf is not my favorite feminist, and Lew Rockwell is certainly not my favorite libertarian, but this is great stuff. Naomi Wolf now says she thinks she’s been a secret libertarian for many years in many, many ways and mentions that she’s feeling increasingly sympathetic toward radical libertarianism; she insists on the importance of challenging both Democratic- and Republican-sponsored power grabs, and expresses sympathy for the libertarian case for abolishing federal control over schooling. Rockwell does a tolerable job of explaining the libertarian case against the Fed as a instrument of class warfare, does a good job of cautioning against premature jumps into statist political action, and comes out that the conservative movement has been an engine of fascism for the past 50 years. Also, Wolf has some great material at about 23:45 in the interview about the way in which media producers deliberately encourage false-alternative shouting matches and instruct their guests that serious deliberation is not good television.

  • Socialist Alexander Cockburn writes a libertarian article for the Buchananite newsjournal The American Conservative, discussing the ongoing bipartisan assault on civil liberties, in which he points out the continuity between Clinton’s and Bush’s anti-terrorism and drug war rackets, decrying Social Security Numbers and the Kelo decision, while praising the defense of the individualist reading of the Second Amendment in Heller.

  • There’s been a lot more discussion of Roderick’s Corporations Versus the Market piece on Cato Unbound. Roderick’s Keeping Libertarian, Keeping Left replies to the initial responses from the Danny Bonaduce of the Blogosphere, Steven Horwitz, and Dean Baker. Roderick’s Owning Ideas Means Owning People makes the case for libertarian radicalism against Intellectual Protectionism (indeed, for a position even more radical than those advocated by Cato minimal-statist Tim Lee and by anti-IP, but pro-governmental Leftist Dean Baker).

    Yglesias, in reply to Roderick and Steven Horwitz, says he is a bit puzzled by pragmatic arguments for left-libertarianism, based on the claim that markets do more for human flourishing than government programs, writing: If this means that the absence of governance à la Joseph Stalin is a more important determinant of our well-being than is, say, the existence of unemployment insurance then, yes, of course this is true. But the question facing government programs is not whether they are more or less beneficial than the existence of a market economy, the question is whether the programs are more beneficial than would be the absence of programs. Roderick does a great job of responding to Yglesias (as well as to some another reply by Dean Baker) here. Let me just add a bit more about the fundamental problem with Yglesias’s proposed methods for assessing whether or not a given government program is warranted.

    The problem here is that Yglesias seems to be treating this as a ceteris paribus comparison: as if the right question to ask is whether people would be better off with the government program in place or in a situation which is exactly identical, but without the government program.

    There are two problems with this. First, unless there is some strong reason to believe that ceteris will stay paribus in the absence of a government program, the real alternative is between a government program and market alternatives to that program. So, for example, Yglesias mentions ex ante environmental regulations. But he rigs the match by apparently comparing outcomes with ex ante environmental regulations to outcomes from a market situation which is basically the same as the present, but in which corporate polluters are free to go on polluting with impunity. An un-rigged comparison would be one between ex ante environmental regulations and free market means of addressing pollution that the ex ante regulations have either directly suppressed or crowded out — like the use of pollution nuisance suits or a more robust use of free market grassroots activism, through boycotts, sustainability certification, social investing, and so on. Maybe these kind of tactics would not be as effective as ex ante regulation, or maybe they would be more effective; but in either case, this is the comparison that actually needs to be made, and as far as I can tell Yglesias hasn’t given any argument to support a claim that market methods would do worse. Indeed, there’s some good reasons to think that they might do better. Since freed-market methods are by their nature decentralized, and not dependent on political lobbying or electioneering, they are also not subject to the same problems of regulatory capture by those who can put a lot of money and political influence behind their interests.

    Second, Yglesias also more or less explicitly suggests that, when you’re deliberating over whether to favor government programs or freed-market alternatives, any given government program ought to be assessed in isolation from all the others (on a case-by-case basis). But of course libertarian Leftists have repeatedly stressed the importance of seeing particular social or political processes in the context of how many different processes interlock and interact with each other. So, for example, as Roderick has repeatedly stressed, if you want to know about whether to prefer unfettered free markets or regulatory command-and-control in financial markets, it doesn’t make sense to compare a rigged market where finance capital is tightly regulated and can reasonably expect government bail-outs in case of failure to a rigged market where finance capital is loosely regulated but can still reasonably expect government bail-outs in case of failure. Whether the latter or the former turns out to have better results is a question we could debate, but the important point, from a left-libertarian point of view, is that it would be more interesting and fruitful to compare the rigged markets to a free market with neither ex ante regulation nor bail-outs. Similarly, if we are looking at environmental regulations then we have to consider not only market alternatives to ex ante environmental regulation; we also have to consider other government programs which may indirectly contribute to environmentally destructive practices — like subsidizing corporate centralization and capital-intensive production; or stealing land from homeowners and small businesses for large, polluting manufacturing plants, garbage incinerators, and other forced-modernization boondoggles; or subsidizing fossil fuel dependence; or highway-driven suburban sprawl — and whether the absence of those other programs, taken together with the absence of ex ante environmental regulation, would make freed-market alternatives to ex ante environmental regulation even more palatable than they would be when considered in isolation. (For some similar points in the context of health care, see GT 2007-10-25: Radical healthcare reform.)

    Meanwhile, Roderick’s article has also prompted a lot of discussion outside of Cato Unbound, most notably interesting but misguided replies from Peter Klein, Will Wilkinson, and an extremely ill-conceived response by Walter Block and J.H. Huebert. I’ve already discussed Block’s and Huebert’s comments, with a focus on their distortion of my own expressed views (cited favorably by Roderick) on radical labor unionism.. There’s a lot of fascinating exchange among Klein, some other right-libertarians and agnostic-libertarians, and a number of libertarian Leftists in the comments thread on Klein’s article; note especially the exchange among Araglin, Klein, P.M. Lawrence and others over the legitimacy and viability of the corporate form, limited liability, etc., under freed markets, and this short comment by Jesse Walker: It seems clear to me that, at the very least, the “more local and more numerous” claim is correct, if not in every sector than certainly in the economy as a whole. Removing occupational licensing laws alone would unleash such a flood of tiny enterprises — many of them one-man or one-woman shows, sometimes run part-time — that I doubt the elimination of antitrust law and small-business setasides would offset it. Especially when large businesses have proven so adept at using antitrust and setasides for their own purposes. . . . . (Jesse promises a more detailed follow-up at Hit and Run; I look forward to it.)

    Meanwhile, as promsied, Roderick has added his own (detailed, excellent) reply on most of the points raised by Klein, Wilkinson, Huebert, and Block back over at Cato Unbound, entitled Free Market Firms: Smaller, Flatter, and More Crowded.

    Read the whole damn thread. It’s great.

  • On the activist front, this past Monday, New Jersey ALLy Darian Worden announced a new series of Alliance of the Libertarian Left outreach flyers and subversion squares available from the NJ ALL website. Enjoy! (I also think there will be some interesting news in the near future about ALL in Southern California, England, Denver, and some new activities for ALL in Las Vegas. But I’m not going to tip my hand more than that in public, just yet. If you’re curious — and especially if you are in one or more of those geographical areas — drop me a line in private.

In reply to a reply by J.H. Huebert and Walter Block

J.H. Huebert and Walter Block have recently published an essay which claims to be a reply to Roderick Long’s essay on left-libertarianism for Cato Unbound. Huebert and Block insist that they are going to set the record straight on the correct libertarian view of these matters. But it’s not clear that they have succeeded in even setting the record straight on Roderick’s view of these matters. For example, I think they have clearly and grossly misread him on the question of selective tax breaks for politically-connected big businesses. (Roderick never claimed that getting selective tax breaks are morally equivalent to receiving a government subsidy; only that firms or practices that get a comparative advantage from government taxes on their competitors are, like firms or practices that get a comparative advantage from government subsidies, not good examples of the free market at work.) Similarly, their attempt at a response to Roderick’s claims about big-box retailers like Wal-Mart, and the importance of using government-subsidized roads to the success of their business model, wavers between an attack on a claim that Roderick never made — that Wal-Mart deserves blame for their successful exploitation of government-subsidized roads — and willfully obtuse replies to the claim that he did make — that Wal-Mart’s road-dependent business model shouldn’t be counted as an example of the free market at work, and that if Wal-Mart had to pay the full costs of its business model, without government subsidies to cross-country freight trucking, it would lose some or all of the comparative advantage that it currently holds over smaller and more local competitors. (Did you know that, since we all use government roads sometimes, that means we are all getting a subsidy like Wal-Mart? Hey, you know, back in May I got a $600 check from the U.S. Department of the Treasury, which was supposed to be for economic stimulus. Just like how AIG gets $85,000,000,000 checks from the U.S. Department of the Treasury, for the sake of economic stimulus! So how could I possibly claim that AIG gets government privileges that I don’t enjoy? Well. See my discussion with Will Wilkinson in a comment thread about the original article.)

In any case, though, Roderick has promised a reply, which I eagerly look forward to. My main reason for mentioning Huebert and Block’s essay here is that it contains a link to my old post Free the Unions (and all political prisoners)! (2004-05-01), and four paragraphs which purport to be a reply to my argument, and the claims Roderick makes on the basis of that argument. Here are those four paragraphs:

Those Poor Unions

Long also laments that our hampered free market doesn’t give unions enough power. He writes: Legal restrictions on labor organizing also make it harder for such workers to organize collectively on their own behalf.

Given that the law allows some workers to not only organize themselves but also coercively organize others, it’s not clear what Long is talking about. To support his claim, he cites a blog post which laments that U.S. labor laws do not go far enough. We should support current labor laws, says Long’s source, but ideally we will return to the days of more militant unions.

You remember militant unions – the kind that used to (and, well, still do) beat and kill workers who do not cooperate with them. Long and his comrade, of course, make no mention of the unions’ bloody history.

Unions are like a tapeworm on the economy, sucking sustenance out of businesses. The entire rust belt is a result of unions demanding wages higher than worker productivity. The present problems of the Detroit Three (Ford, Chrysler, General Motors) are mainly dues to their foolishness in not withstanding the unwarranted demands of the United Auto Workers. But, Long can rejoice: under an Obama administration, these economic scourges are likely to obtain even more power.

— J. H. Huebert and Walter Block (2008-11-24): In Defense of Corporations, Tax Breaks, and Wal-Mart

This is a bizarre misinterpretation of my post, and hard to understand how anyone could make it other than through utter carelessness or willful misreading.

The post that they are referring to was the first in a series of annual May 1 posts, commemorating International Workers’ Day — a grassroots labor holiday originally organized by anarchists, to honor the memory of the five anarchist organizers and agitators who were murdered by the state of Illinois after the Haymarket Riot.

Block and Huebert claim to be puzzled by what Roderick could mean when he says that, due to government regimentation of labor unions, labor organizing is substantially more restricted than it would be in a free market. I’m unclear as to what they find unclear, because if it was not clear to them already, the footnoted post by me, which they claim to have read, goes ahead and lists several of the restrictions in question.

The Wagner Act was the capstone of years of government promotion of conservative, AFL-line unions in order to subvert the organizing efforts of decentralized, uncompromising, radical unions such as the IWW and to avoid the previous year’s tumultuous general strikes in San Francisco, Toledo, and Minneapolis. The labor movement as we know it today was created by government bureaucrats who effectively created a massive subsidy program for conservative unions which followed the AFL and CIO models of organizing—which emphatically did not include general strikes or demands for worker ownership of firms. Once the NRLB-recognized unions had swept over the workforce and co-opted most of the movement for organized labor, the second blow of the one-two punch fell: government benefits always mean government strings attached, and in this case it was the Taft-Hartley Act of 1947, which pulled the activities of the recognized unions firmly into the regulatory grip of the federal government. Both the internal culture of post-Wagner mainstream unions, and the external controls of the federal labor regulatory apparatus, have dramatically hamstrung the labor movement for the past half-century. Union methods are legally restricted to collective bargaining and limited strikes (which cannot legally be expanded to secondary strikes, and which can be, and have been, broken by arbitrary fiat of the President). Union hiring halls are banned. Union resources have been systematically sapped by banning closed shop contracts, and encouraging states to ban union shop contracts—thus forcing unions to represent free-riding employees who do not join them and do not contribute dues. Union demands are effectively constrained to modest (and easily revoked) improvements in wages and conditions.

— GT 2004-05-01: Free the Unions (and all political prisoners)!

Of course Block and Huebert are right that government patronage grants substantial illegitimate privileges to a certain kind of union (the establishmentarian, conservative unionism of the AFL-CIO and Change to Win [sic]). But those privileges come at the cost of accepting an extensive and intrusive set of government regulations on official union activity. The result is not only a violation of the rights of employers to refuse to bargain with union reps, but also a substantial government subsidy for conservative unionism as against competing forms of union organizing, like those practiced by anti-establishmentarian, radical unions like the Industrial Workers of the World — tactics like minority unionism (crowded out of the market by government-subsidized majoritarian collective bargaining), wildcat strikes (illegal under the Wagner Act), secondary strikes and boycotts (illegal under the Taft-Hartley Act), general strikes (ditto), union hiring halls (double ditto), and so on. The combination of government privilege with government controls may benefit the select outfits that toe the establishmentarian line and get their hands on the government loot. But it does so at the expense of the goals that those organizations supposedly support — in this case, organizing workers for the sake of greater control over the conditions of their labor. I know that Walter Block is perfectly well aware of the way this works when it comes to tax-funded education vouchers for private schooling: although the selected schools that receive the vouchers may profit, the availability and quality of education suffers, because of the way that government privileges squash unofficial competitors who do not qualify for the government hand-out, and also because of the way that government controls restrain the activities that the remaining privileged-and-regulated schools can perform. Have Block and Huebert failed to apply the same analysis to privileged-and-regulated labor unions, and the availability and quality of labor organizing, because they are simply ignorant of the restrictions imposed on NLRB-recognized unions? Or because they are aware of the restrictions, but it hasn’t occurred to them that they might matter as much as the government-granted subsidies?

One way or the other, the post closes by calling for the immediate and complete repeal of the Wagner Act and the Taft Hartley Act, and the complete abolition of the National Labor Relations Board, and all other forms of political patronage and political control in labor organizing, which I argued would always hold the labor movement back from its professed goals:

Don’t get me wrong: the modern labor movement, for all its flaws and limitations, is the reflection (no matter how distorted) of an honorable effort; it deserves our support and does some good. Union bosses, corporate bosses, and government bureaucrats may work to co-opt organized labor to their own ends, but rank-and-file workers have perfectly good reasons to support AFL-style union organizing: modern unions may not be accountable enough to rank-and-file workers, but they are more accountable than corporate bureaucracy; modern unions bosses don’t care enough about giving workers direct control in their own workplace, but they care more than corporate bosses, who make most of their living by denying workers such control. The labor movement, like all too many other honorable movements for social justice in the 20th century, has become a prisoner of politics: a political situation has been created in which the most rational thing for most workers to do is to muddle through with a co-opted and carefully regulated labor movement that helps them in some ways but undermines their long-term prospects. It doesn’t make sense to respond to a situation like that with blanket denunciations of organized labor; the best thing to do is to support our fellow workers within the labor movement as it is constrained today, but also to work to change the political situation that constrains it, and to set it free. That means loosening the ties that bind the union bosses to the corporate and government bureaucrats, by working to repeal the Taft-Hartley Act, and abolish the apparatus of the NLRB, and working to build free, vibrant, militant unions once again.

— GT 2004-05-01: Free the Unions (and all political prisoners)!

The comments expressing some watered support for the actually-existing labor movement are grossly misrepresented by Block and Huebert as support [for] current labor laws (in fact, the point was that the labor movement deserves some watered support in spite of the baleful effects of government labor laws on it). And my call for all existing government labor laws to be repealed and replaced with nothing but free association is, astonishingly, glossed by Block and Huebert as a [lament] that U.S. labor laws do not go far enough.

This is followed by a tirade about my use of the word militant to describe my ideal for free unionism. This is apparently taken, just as such, to be an endorsement of vigilante violence against non-union or anti-union workers, by unions of the kind that used to (and, well, still do) beat and kill workers who do not cooperate with them. This is an absurd and unwarranted misreading. Of course, there have been unions whose members used vigilante violence to achieve their goals. I find the use of aggressive violence, against fellow workers or against anyone else, to be completely reprehensible. But that’s not what militancy refers to in the context of labor organizing. Labor militancy is a term of art that refers to the degree to which unions are willing to use confrontational tactics with bosses, as opposed to back-room negotiations or appeasement of the boss’s demands — where confrontational means just that, not violent. Some militant unions endorsed confrontation in the form of violence against bosses, or their property, or scabs. Others refused to on principle, and expressed their militancy through strictly nonviolent forms of confrontation. I agree with the latter, and what I have argued for in more or less everything I have ever written about unions is the principle that fellow worker Joe Ettor set out when he was working to help organize the great Lawrence textile strike of 1912 with the IWW:

If the workers of the world want to win, all they have to do is recognize their own solidarity. They have nothing to do but fold their arms and the world will stop. The workers are more powerful with their hands in their pockets than all the property of the capitalists. As long as the workers keep their hands in their pockets, the capitalists cannot put theirs there. With passive resistance, with the workers absolutely refusing to move, lying absolutely silent, they are more powerful than all the weapons & instruments that the other side has for attack.

Block and Huebert complain that I make no mention of the unions’ bloody history. (An odd claim, since they seem to think that my use of the adjective militant is an explicit reference to it.) But I may as well complain that Block and Huebert make no mention of the bloody history of bosses who called out hired muscle, injunction-wielding courts, city cops, state militia, or the federal military to commit every sort of atrocity against striking workers, their wives, and their children. If Block and Huebert have not mentioned the extensive use of aggressive violence by bosses, who have always been far more politically powerful and had far greater resources for hiring on thugs than the unions had, and who were frequently able to call out the repressive forces of the State itself in addition to their own thugs — if they have not mentioned it, I say, because (of course, of course) they don’t agree with it, and intend only to defend the actions of bosses that are consonant with libertarian principles, then that’s fine; but then the reason that I didn’t spend a long time talking about vigilante violence by unionists is because (of course, of course), I don’t agree with that, and intend only to defend the actions of union organizers that are consonant with libertarian principles. But if Block want violence mentioned, then it is totally irresponsible for them to insist on such a wildly distorted and one-sided presentation of the matter, since unionists were victims of far more intense and far more systematic violence than they ever committed, and since much (but by no means all) of the violence attributed to unionists was in fact defensive force against those same company and government thugs.

Huebert and Block close with a laughably overheated ritualistic denunciation of labor unions as a tapeworm on the economy, sucking sustenance out of businesses, and an astonishing monocausal theory of middle-American industrial decline, on which the entire rust belt is a result of unions demanding wages higher than worker productivity (!). Apparently decades of unsustainable malinvestment, public-private partnerships with city, state, and federal governments, corporate welfare, protectionist tariffs, bail-outs of failed business models, etc. have nothing to do with it.

But whether all that is accurate or inaccurate is something best hashed out elsewhere. For right now, my main concern is how wildly Block and Huebert have misrepresented the position that they claim to be arguing against, in the attempt to make it seem as though this overheated denunciation of state unionism had anything to do with the freed-market unionism that I advocate, or that Roderick endorsed via footnote. It is inconceivable that a post whose primary purpose was to condemn the effects of government labor laws and to call for the repeal of the Taft-Hartley Act and the Wagner Act, for the immediate and complete abolition of the National Labor Relations Board, and in general for the exorcism of all political command-and-control (including all enforced recognition, all political patronage, and all political regulation) from organized labor could be reasonably read as support for current coercive labor laws, let alone a call for their expansion (!). An error like that must either be the cause of extraordinarily careless reading, or willful misrepresentation. In either case, Block and Huebert ought to be embarrassed that they have published it.